Rental Space Assignment
You are the Compliance Officer and have been given a recent lease. Your provider is working part time in the rented space (which is a rarely used portion of the referring physician’s office suite), and the provider is paying 50% of reimbursement for the use of this space. Other facts as you have discovered them are as follow:
? On average, the provider has been paying $14,000 per year for part time use of this space based on reimbursement.
? Your provider uses the space 6 hours 3 days per week, 48 weeks per year.
? The amount of square footage exclusively occupied by your provider is 350; and the total square footage of the office suite is 3,250.
? The office suite is open 325 days per year, 10 hours per day.
? The office suite leases the 3,250 square feet for $104,000 per year (at fair market value, which is $32/sqft).
? The renting physician is pushing your provider to “just drive ahead” and they will finish the contract when it’s convenient, and it will not have any time frames for signing or renewal.
Based on the information provided above, answer the following 2 questions:
1. What should the rent be for your provider when the written lease is executed? Use the table in the above article to calculate your answer. Type out your math logic for your instructor.
2. Is this an arrangement that would make the OIG suspicious? Why or why not (provide brief explanation)?
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