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Healthcare Compensation and Referrals: Avoiding Compliance Pitfalls in Physician Deals

2026-04-20 · 19:55 UTC ·Husch Blackwell ·2 min read

Brief

The Husch Blackwell podcast (published April 20, 2026) features hosts Jonathan Porter and attorney Hal Katz in a presentation-style interview on structuring physician compensation while avoiding Stark Law and False Claims Act pitfalls. Katz, fresh from an AAOE conference, and Porter draw on landmark enforcement examples—Tuomey, a Florida hospital settlement, and a recent DOJ Stark intervention in Tennessee—to explain how both blatant schemes (sham consulting to induce volume) and subtle misstatements about downstream benefits can trigger investigations. They emphasize replacing “black box” pay formulas with transparent, documented methodologies, coaching executives on permissible language during compensation talks, and building compliance guardrails. The episode also addresses private equity-driven incentives, including tracking “leakage” and “keeping procedures,” and closes with actionable steps for executives, compliance officers, and physician leaders to create defensible, sustainable arrangements.

Why it matters

Published 2026-04-20, Husch Blackwell podcast hosts Jonathan Porter and Hal Katz (who recently presented at the AAOE conference) map a spectrum of physician-compensation compliance risks ranging from overt criminal schemes (e.g., sham consulting contracts to “buy surgeries”) to inadvertent statements by financial teams that later appear in DOJ complaints.

Key details

  • The guests highlight concrete enforcement precedents—Tuomey and a recent DOJ Stark intervention against a Tennessee health system, plus a Florida hospital settlement—in which compensation formulas or metrics were central problems, warning that “black box” payment methodologies invite government scrutiny.
  • Practical guidance includes designing transparent, defensible compensation formulas (documented methodology and metrics), training executives on what not to say in physician-compensation discussions, and instituting written guardrails to reduce False Claims Act and Stark Law exposure.
  • The conversation flags private equity pressures on referral patterns and industry terms like “leakage” and “keeping procedures,” advising organizations to have honest but legally framed discussions about referrals and to engage compliance officers and counsel when structuring incentive arrangements.
Cleaned source text

Host Jonathan Porter (https://www.huschblackwell.com/professionals/jonathan-porter) welcomes Husch Blackwell’s Hal Katz (https://www.huschblackwell.com/professionals/hal-katz) back to the podcast to discuss best practices for structuring physician compensation arrangements and navigating the complex compliance landscape surrounding healthcare referrals. Fresh off presenting at the American Association of Orthopaedic Executives (AAOE) conference, Hal and Jonathan share insights on how healthcare organizations can align financial incentives while staying on the right side of Stark Law and False Claims Act requirements.

We begin by examining the spectrum of compliance violations in physician compensation arrangements, from blatant criminal schemes designed to “buy surgeries” through sham consulting contracts to more nuanced cases where well-intentioned financial teams make statements about downstream benefits that later appear in DOJ complaints. Hal discusses a recent DOJ Stark intervention against a Tennessee health system and provides practical guidance on what healthcare executives and compliance officers should and should not say during physician compensation discussions.

Next, we turn to the mechanics of how compensation is calculated, drawing lessons from major cases like Tuomey and a Florida hospital settlement where the formula itself included problematic metrics. Hal explains the risks of “black box” compensation arrangements and offers best practices for creating transparent, defensible methodologies that can withstand government scrutiny.

Our conversation then shifts to private equity investment in healthcare and the tension between financial realities and compliance requirements. We discuss industry terms like “leakage” and “keeping procedures,” examining how organizations can have honest conversations about referral patterns without crossing legal lines.

We close with actionable compliance recommendations. Hal outlines concrete steps that executives, compliance officers, and physician group leaders can take today to strengthen their guardrails and build sustainable, defensible business practices in an increasingly scrutinized industry.

Jonathan Porter | Full Biography (https://www.huschblackwell.com/professionals/jonathan-porter)

Jonathan focuses on white collar criminal defense, federal investigations brought under the False Claims Act, and litigation against the government and whistleblowers. He draws on his experience as a former federal prosecutor to guide clients in sensitive and enterprise-threatening litigation. At the Department of Justice, Jonathan earned a reputation as a top white-collar prosecutor and trial lawyer and was a key member of multiple international healthcare fraud takedowns and high-profile financial crime prosecution teams. He serves as a vice chair of the American Health Law Association’s Fraud and Abuse Practice Group and teaches white collar crime as an adjunct professor of law at Mercer University School of Law.

Hal Katz | Full Biography (https://www.huschblackwell.com/professionals/hal-katz)

Based in Austin, Texas, Hal provides healthcare clients with guidance on corporate, transactional, regulatory, and public policy matters. With over 30 years in practice, he has witnessed firsthand the evolution of the healthcare industry that continues to reshape the business and approaches of healthcare delivery. He represents for-profit, nonprofit, and governmental entities, including medical groups, hospitals, technology companies, behavioral health organizations, private equity funds, academic medical centers, and health plans. Since 2011, Hal has served the American Bar Association’s Health Law Section in a variety of leadership posts— including as its Chair from 2020 to 2021. Additionally, from 2017 to 2018, he chaired the Health Law Section of the State Bar of Texas. Hal also serves on the Board of Trustees of Integral Care and on the Board of the Texas e-Health Alliance, where his work focuses on governance, policy, and the responsible use of technology in healthcare.

Channel: Husch Blackwell

Published: 2026-04-20

Video URL: https://www.youtube.com/watch?v=DgoWyZx_pDE