OIG Issues Fraud Alert Warning of Potential Anti-kickback Statute Violations in Physician Compensation Arrangements

OIG Issues Fraud Alert Warning of Potential Anti-kickback Statute Violations in Physician Compensation Arrangements

 

On June 9, 2015, the Office of Inspector General (OIG) issued a Fraud Alert titled "Physician Compensation Arrangements May Result in Significant Liability," which is available here. In the Fraud Alert, the OIG warns physicians of the dangers of entering into compensation arrangements with health care entities, such as medical directorships or office staff arrangements, that do not reflect fair-market value or are not for bona fide services that the physicians actually provide. These compensation arrangements will violate the Federal Anti-Kickback Statute and expose the physicians to civil monetary penalties if not properly structured. Additionally, the OIG reminds physicians that the Anti-Kickback Statute will be violated "if even one purpose of the arrangement is to compensate a physician for his or her past or future referrals of Federal health care program business."

The OIG issued the fraud alert after recently reaching settlements with 12 individual physicians who entered into “questionable” arrangements.  The fraud alert cites a variety of issues that made these arrangements questionable, including taking into account the volume or value of referrals, payments that were inconsistent with fair market value for services to be performed and failure of physicians to actually perform the services.  Some of the arrangements included payment by an affiliated health care entity of the physicians’ front office staff, constituting improper remuneration to the physicians.  The fraud alert notes that the OIG determined that the “physicians were an integral part of the scheme and subject to liability under the Civil Monetary Penalties Law.”

In light of the recent increased government scrutiny on these arrangements, physicians should have their medical directorship agreements reviewed by healthcare compliance counsel.

(Sources: National Law Review, June 9, 2015; Health Law Attorney Blog, June 11, 2015)