Physicians Beware: Government Increasing Enforcement on Physician-Laboratory Relationships

The Federal government is focusing on further enforcement related to physician-laboratory relationships. The Office of Inspector General (the “OIG”) has become aware of various laboratory arrangements that may implicate the Anti-Kickback Statute. These relationships can become suspect when a laboratory offers or gives anything of value with the intent to induce referrals. The OIG addressed these concerns in one of its Special Fraud Alert articles. Primarily, the government has identified these arrangements as possibly violating the Anti-Kickback Statute.

As discussed in a previous article, the Anti-Kickback Statute is violated when remuneration is exchanged with the intent to induce or reward referrals. Both parties can be criminally liable and convicted of a felony punishable by a maximum fine of $25,000, imprisonment up to five years, or both. Laboratories that pay referring physicians for services may be suspect under the Anti-Kickback Statute because the payment could be for inducing the physician’s Federal health care program referrals.

There are two specific arrangements the OIG identified as involving transfers of value from laboratories to physicians that can present a substantial risk of fraud and abuse under the Anti-Kickback Statute.

1.     Arrangements under which the laboratories are providing remuneration to physicians to collect, process, and package patients’ blood specimens.  These arrangements are referred to as Specimen Processing Arrangements.

2.     The government has also become aware of arrangements under which laboratories are collecting data on the demographics or other attributes of patients who have undergone certain tests performed by the offering laboratories. These arrangements are referred to as Registry Payment Arrangements.

The OIG is increasing enforcement regarding payment arrangements between laboratories and physicians, especially with respect to these two arrangements.  If you or your organization are involved in similar arrangements and have questions regarding the Anti-Kickback Statute risk, or have any other compliance concerns, please contact Alex T. Krouse at (574) 485-2003 or Susan E. Ziel at (612) 564-1927.