"...As a further example, we would also have a serious question as to whether an agreement is commercially reasonable if the lessee is performing a sufficiently high volume of procedures, such that it would be economically feasible to purchase the equipment rather than continuing to lease it from a physician or physician entity that refers patients to the lessee for DHS. Such agreements raise the questions of whether the lessee is paying the lessor more than what it would have to pay another lessor, or is leasing equipment rather than purchasing it, because the lessee wishes to reward the lessor for referrals and/or because it is concerned that, absent such a leasing arrangement, referrals from the lessor would cease. In some cases, depending on the circumstances, such arrangements may also implicate the anti-kickback statute."

The comment was intended to address circumstances where a per-click rate that is presumed to be consistent with Fair Market Value (FMV) (and which is otherwise allowable under Stark) may fall out of FMV when applied to a high-volume arrangement. In addition, it is reasonable to assume that CMS would have the same concern with respect to flat-fee arrangements. For example, if a hospital leases an ultrasound machine and technician under a block lease arrangement for a sufficiently large block of time, analysis of the resulting annual compensation might demonstrate that the hospital's more prudent decision would have been to purchase the equipment.

FMV Pitfall

While arrangements involving the non-exclusive use of equipment often offer many mutual benefits to healthcare providers, failure to consider the implications of a buy vs. lease analysis as cautioned by CMS may expose the parties to allegations of improper payments.