Indirect Contractual Arrangement

80.6 - Indirect Contractual Arrangement (Rev. 1, 10-01-03) SNF-510.3 The necessary contractual arrangement between physicians and the facility in which they perform their services may exist indirectly by reason of the terms of their relationship with an employer and the employer’s contractual arrangement with the facility. EXAMPLE A professional corporation enters into a contractual arrangement with an SNF to provide physician services for it. Under this arrangement, the SNF alone bills and receives payment for the physician services and pays the corporation a percentage of the charges. The corporation, in turn, employs several physicians to provide the services, and under the terms of their employment, is entitled to any fees payable for the services (other than the portion of the fees retained by the SNF). The combination of the two arrangements - between the SNF and the corporation and the corporation and the physicians - constitutes an indirect contractual arrangement between the SNF and the physicians. For the SNF to bill and receive payment for the physician services furnished in the SNF, the SNF must also enter into a direct contractual arrangement with the physicians for this purpose.