
Many MSA fee structures are based on a cost-plus fee structure. And often times the MSO cannot accurately forecast the expenses of providing management services. So one question is whether the actual expenses incurred by the MSO are reasonable and sensible. It’s my understanding that the Stark Law guidance on CR relates to whether an entire arrangement is “reasonable” and/or “furthers a legitimate business purpose.” Even though the Stark Law doesn’t explicitly address the reasonableness of individual expenses within an arrangement, does it cover the reasonableness of certain expenses? This issue also exists with COVID specimen collection arrangements and whether certain expenses are really necessary and reasonable.
The question to the FMV compliance community is do you believe MSAs and other types of arrangements need to be smell-tested for reasonableness of expense?