The Weirdness of Remuneration

The Weirdness of Remuneration

Remuneration. It is a weird word.

It almost sounds like reMOOneration, which I imagine is when a cow has acid reflux. Or MOONeration, an ideal description of giving multiple Medicare Outpatient Observation Notices (MOONs).

But remuneration is really “something of value.” The confusing term is used in both the Medicare Anti-Kickback statute and the Stark law to describe a benefit. The physician anti-self-referral law, or Stark, defines renumeration as including “any remuneration” (yes, that is a bit circular!) “directly or indirectly, overtly or covertly, in cash or in kind.” The Anti-Kickback Statute doesn’t even go this far.

So, what constitutes “value?”

The definition is important.

A hospital needs to know whether it is paying a kickback if it improves the turnaround time in its OR. This allows surgeons to do more surgeries. Is that renumeration? What if a nursing home replaces a crummy electronic health record with a new one, greatly improving the efficiency of a visiting physician? What if a clinic has current issues of magazines in the waiting room, rather than a 1965 issue of Highlights?

While there has not been an absolutely 100-percent definitive answer to the question, a case last year from a federal Court of Appeals offers some extremely helpful language, suggesting that none of those examples should be considered remuneration.

The case, Martin v. Hathaway, arose out of a dispute at Oaklawn Hospital in Michigan. A physician asserted that the hospital was improperly compensating, or providing renumeration, to another physician. The Court of Appeals rejected that argument, concluding that the law must be referring to money or something similar to money. The court analyzed possible definitions before concluding that considering everything of value as “remuneration” was too expansive:   

“Here is one other problem with the broader definition. It lacks a coherent endpoint. Consider the hospital that opens a new research center, purchases top-of-the-line surgery equipment, or makes donations to charities in the hopes of attracting new doctors. Or consider the general practitioner who refuses to send patients for kidney dialysis treatment at a local healthcare facility until it obtains more state-of-the-art equipment. Are these all forms of remuneration? Unlikely at each turn.”

This means that most actions that improve the delivery of care without an exchange of cash or a cash equivalent will be permissible. Of course, one can take that too far. I will close with two examples that may seem similar, but one has received a favorable advisory opinion, and the other resulted in a payment of millions of dollars.

Let’s say a hospital wants to provide a nurse practitioner to round on patients. The nurse practitioner will also serve as the first call for help, reducing the number of calls to the attending physician. Is this kosher?

According to Advisory Opinion 22-20, as long as the service is provided to all patients, regardless of the number of referrals from the attending physician, and there is either no bill for the service or the hospital submits the bill, it’s fine. But as Detroit Medical Center has learned in a pair of settlements, if the hospital is choosing specific physicians for this service, or permitting those physicians to bill for the hospital’s employees, the answer is quite different. As soon as the physician starts to bill, the hospital is now providing something akin to a cash equivalent. 

In essence, the 6th Circuit is adopting the words of singer Randy Newman: “It’s money that matters, hear what I say; It’s money that matters In the U.S.A.”

Generally speaking, improving the quality or efficiency of care will not be like offering cash, and shouldn’t be considered remuneration.

Facebook
Twitter
LinkedIn

David M. Glaser, Esq.

David M. Glaser is a shareholder in Fredrikson & Byron's Health Law Group. David assists clinics, hospitals, and other health care entities negotiate the maze of healthcare regulations, providing advice about risk management, reimbursement, and business planning issues. He has considerable experience in healthcare regulation and litigation, including compliance, criminal and civil fraud investigations, and reimbursement disputes. David's goal is to explain the government's enforcement position, and to analyze whether this position is supported by the law or represents government overreaching. David is a member of the RACmonitor editorial board and is a popular guest on Monitor Mondays.

Related Stories

Transparency in Coverage Final Rule

Transparency in Coverage Final Rule

The healthcare industry’s landscape shifted dramatically with the implementation of the Transparency in Coverage (TiC) Final Rule. For compliance professionals navigating this regulatory terrain, understanding

Read More

Leave a Reply

Please log in to your account to comment on this article.

Featured Webcasts

2026 IPPS Masterclass 3: Master MS-DRG Shifts and NTAPs

2026 IPPS Masterclass Day 3: MS-DRG Shifts and NTAPs

This third session in our 2026 IPPS Masterclass will feature a review of FY26 changes to the MS-DRG methodology and new technology add-on payments (NTAPs), presented by nationally recognized ICD-10 coding expert Christine Geiger, MA, RHIA, CCS, CRC, with bonus insights and analysis from Dr. James Kennedy.

August 14, 2025
2026 IPPS Masterclass Day 2: Master ICD-10-PCS Changes

2026 IPPS Masterclass Day 2: Master ICD-10-PCS Changes

This second session in our 2026 IPPS Masterclass will feature a review the FY26 changes to ICD-10-PCS codes. This information will be presented by nationally recognized ICD-10 coding expert Christine Geiger, MA, RHIA, CCS, CRC, with bonus insights and analysis from Dr. James Kennedy.

August 13, 2025
2026 IPPS Masterclass 1: Master ICD-10-CM Changes

2026 IPPS Masterclass Day 1: Master ICD-10-CM Changes

This first session in our 2026 IPPS Masterclass will feature an in-depth explanation of FY26 changes to ICD-10-CM codes and guidelines, CCs/MCCs, and revisions to the MCE, presented by presented by nationally recognized ICD-10 coding expert Christine Geiger, MA, RHIA, CCS, CRC, with bonus insights and analysis from Dr. James Kennedy.

August 12, 2025

Trending News

Featured Webcasts

The Two-Midnight Rule: New Challenges, Proven Strategies

The Two-Midnight Rule: New Challenges, Proven Strategies

RACmonitor is proud to welcome back Dr. Ronald Hirsch, one of his most requested webcasts. In this highly anticipated session, Dr. Hirsch will break down the complex Two Midnight Rule Medicare regulations, translating them into clear, actionable guidance. He’ll walk you through the basics of the rule, offer expert interpretation, and apply the rule to real-world clinical scenarios—so you leave with greater clarity, confidence, and the tools to ensure compliance.

June 19, 2025
Open Door Forum Webcast Series

Open Door Forum Webcast Series

Bring your questions and join the conversation during this open forum series, live every Wednesday at 10 a.m. EST from June 11–July 30. Hosted by Chuck Buck, these fast-paced 30-minute sessions connect you directly with top healthcare experts tackling today’s most urgent compliance and policy issues.

June 11, 2025
Open Door Forum: The Changing Face of Addiction: Coding, Compliance & Care

Open Door Forum: The Changing Face of Addiction: Coding, Compliance & Care

Substance abuse is everywhere. It’s a complicated diagnosis with wide-ranging implications well beyond acute care. The face of addiction continues to change so it’s important to remember not just the addict but the spectrum of extended victims and the other social determinants and legal ramifications. Join John K. Hall, MD, JD, MBA, FCLM, FRCPC, for a critical Q&A on navigating substance abuse in 2025.  Register today and be a part of the conversation!

July 16, 2025

Trending News

Happy National Doctor’s Day! Learn how to get a complimentary webcast on ‘Decoding Social Admissions’ as a token of our heartfelt appreciation! Click here to learn more →

CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 2 with code CYBER24