Q. I have a friend who is a physical therapist and has been leasing space from me for some time. Am I required to collect rent from her?
A: Not only are you required to collect rent, you are also required to have a contract in place for a term of not less than 1 year, evidencing that the rent you are collecting is fair market value and does not reflect the volume and value of referrals between you and the physical therapist. Failing to have a lease in place opens you up to potential exposure to being part of an improper arrangement whereby remuneration is exchanged for referrals, in other words, you are giving free rent to the therapist in exchange for referrals to your practice. Should your patients be Medicare or other federal health plan beneficiaries, you may be violating the federal anti-kickback statute, and—depending on the state in which you practice—other state laws, rules and/or regulations. So not only are you hurting your bottom line, you also may be opening your practice to potential liability.
Answers to our readers' questions were provided by Jennifer Kirschenbaum, JD, healthcare department manager for the law firm of Kirschenbaum & Kirschenbaum, P.C., Garden City, New York.