Hospital wants to recruit Physician to relocate to the community and join Group. Hospital circulates a draft recruitment agreement under which Hospital will make a one-time payment of $100,000 to Physician. Physician and Group both email Hospital and state they are comfortable with the agreement as written. Physician subsequently relocates to the community, and Hospital pays Group $100,000 to be passed through to Physician. The recruitment agreement is never formally executed.

Separately, Physician and Group enter an employment agreement. The employment agreement does not contain a non-compete provision but does prohibit Physician from joining the medical staff of the other two hospitals in the community. The Hospital is not aware of this provision of the employment agreement.

Ninety-one days after Hospital pays Group the $100,000, Hospital's compliance officer discovers the recruitment agreement was never formally executed. Hospital's compliance officer also learns that Group only passed through $80,000 to Physician and retained the remaining $20,000 to pay for equipment that would be used by Physician and other members of the Group.

1. What Stark issues are presented in the hypothetical raised?

2. Does the hypothetical arrangement comply with the physician recruitment exception?

3. If not, is there an obligation to self-disclose under the SRDP?