North Broward Hospital District

What happened

The North Broward Hospital District — a Florida public hospital district operating four hospitals in Broward County — employed nine high-volume specialist physicians under productivity-based compensation models. The arrangement on paper was straightforward: each physician received a base salary plus a productivity component calibrated to their personal work RVUs. The Stark Law's bona-fide-employment exception permits compensation tied to personal productivity, so the structure was within an exception's perimeter.

The accounting told a different story. For each of the nine physicians, total annual compensation systematically exceeded the revenue they personally collected for their professional services — in some cases by 40% or more. Compensation that exceeds collections necessarily includes value derived from something other than personal productivity; in the District Court's reading, that "something else" was the volume of referrals each physician generated to North Broward facilities for ancillary services, surgical procedures, and inpatient admissions.

A whistleblower — an internal compliance specialist who had repeatedly flagged the gap between compensation and collections — filed suit in 2010. The District Court rejected North Broward's motion to dismiss in 2014, finding that the arithmetic alone created a triable issue on whether the compensation took referrals into account. The case settled for $69.5M in September 2015. The settlement included a five-year corporate integrity agreement and ongoing OIG monitoring.

What this means for your arrangements

North Broward is the case to cite when an employed-physician arrangement's compensation exceeds the physician's personal collections. The compensation-to-collections ratio is the single most-watched metric in Stark FCA litigation. A ratio above 1.0 over multiple years requires either a documented explanation grounded in personally-performed work (e.g., uncompensated administrative duties of significant time value) or a structural redesign of the compensation arrangement.

The teachable subtlety is the role of the on-paper exception. North Broward had the bona-fide-employment exception's elements documented. Documentation does not protect against arithmetic that suggests volume-or-value compensation. The exception requires both the structure AND the implementation to be consistent with FMV.

How ArrowISE prevents this pattern

ArrowISE captures personal-collections data alongside compensation on every employed-physician arrangement, computing the compensation-to-collections ratio at intake and on each refresh. Ratios above configurable thresholds are surfaced as Schena-Shield compensation_exceeds_collections flags, dropping the Defensibility Index proportionally. The arrangement Risk tab makes the ratio visible at a glance — something the North Broward CCO could only see by running custom SQL against the EMR.