Percentage Payments Under New Stark II Regulations
By Dan Higgins and Ken Yood
Since its enactment, the Stark legislation has included several exceptions that specifically require compensation to be "set in advance." The meaning of the term "set in advance," and the ability to use percentage payment formulas have been hotly debated ever since. Many have argued that so long as the compensation methodology is set in advance (e.g., a fixed percentage compensation arrangement), the exception's "set in advance" requirement is met.