The United
States Department of Health and Human Services Office of Inspector General
(“OIG”) released an alert to physicians and health care organizations related
to compensation arrangements that could violate the Anti-Kickback Statute
(“AKS”). Specifically, the OIG issued
guidance that compensation arrangements with physicians must be for services
actually provided and not one purpose of the arrangement can be for the
physician’s past or future referrals (the “Alert”).
The AKS,
authorizes penalties of up to five years in jail and $25,000 in fines, for
individuals or entities that knowingly and willfully offer, pay, solicit, or
receive remuneration in order to induce or reward the referral for individuals
or entities that knowingly and willfully offer, pay, solicit, or receive
remuneration in order to induce or reward the referral of business reimbursable
under Federal health care programs. However, the statute and current
regulations provide safe harbors that protect certain arrangements that might
otherwise implicate the AKS, from penalty.
Nevertheless, many safe harbors require compensation to represent fair
market value for the services provided.
The OIG
noted that it has reached settlements with 12 individual physicians who entered
into questionable medical directorships and office staff arrangements. It was alleged that the compensation paid in
these arrangements was improper because such compensation took into account the
volume or value of referrals and did not reflect fair market value for the
services under the arrangements. Above
all, the OIG explained that the physicians were an integral part of these schemes
and were subject to liability.
Knowing the
OIG’s continued focus on compensation arrangements with physicians,
organizations need to be aware of the potential liability issues related to
such arrangements. Organizations and
physicians should ensure such arrangements are properly analyzed to ensure
compliance with the AKS.
If you have
any questions about this Alert or if you would like additional information,
please contact Robert A. Wade
at (574) 485-2002 or Alex T. Krouse at
(574) 485-2003.