Documentation must support that physician effort was in fact expended, and that such services were in proportion to the payments. Services involve both time expenditure as well as work product in the form of reports, records, etc. Any connection between payment for services and the reality of admissions or referrals is presumptively problematic. Document, document, document. A written understanding of service requirements is essential, as well as periodic evaluation of whether the services are being performed.
Payments based on actual hours worked and documented can be one option.
Hospital management and governance should have independent confirmation of the appropriateness of the payment relationship. A review committee consisting of individuals other than insider directors should conduct an evaluation of arrangements involving payments to physicians. Counsel can review arrangements that raise questions. Do it now. Longstanding arrangements may garner a sense of legitimacy as time passes, irrespective of the underlying reality.