OIG Targets Fraud in Physician Compensation Plans

OIG Targets Fraud in Physician Compensation Plans

OIG Targets Fraud in Physician Compensation Plans

Healthcare organizations and physicians should be careful in structuring physician compensation plans so they don’t violate the Anti-Kickback Statute.

The U.S. Department of Health insurance and Human Services Office of Inspector General (OIG) issued a Fraud Alert (Alert) on June 9 concentrating on physicians who enter compensation plans, for example medical directorships. Such plans may violate the Anti-Kickback Statute (AKS) otherwise carefully structured. To prevent an AKS breach, OIG encourages physicians to think about the relation to these kind of plans and be sure that the compensation reflects fair market price for genuine services.

The AKS is really a criminal statute that prohibits the knowing and willful solicitation, offer, payment or acceptance associated with a remuneration directly or not directly, overtly or covertly, in cash or perhaps in kind (1) for referring a person for any service or item included in a federal healthcare program or (2) for that purchasing, leasing, ordering or organizing for or recommending the acquisition, lease or order associated with a good, facility, service or item reimbursable within federal healthcare program. 42 U.S.C. § 1320a-7b(b). A breach from the AKS is really a legal offense that carries by using it penalties of jail time as high as 5 years, fines and mandatory exclusion from federal healthcare programs. Id. A breach from the AKS may also result in the imposition of more large financial penalties underneath the Civil Financial Penalties Law (CMPL). 42 U.S.C. § 1320a-7a.

The Alert concentrates on the lately arrived at settlements with twelve physicians who joined into medical directorship and office staff plans. Concerning the medical directorship plans, OIG alleged the compensation compensated towards the physicians constituted improper remuneration underneath the AKS. The bases for that AKS breach incorporated (1) compensation that required into consideration the physicians’ volume or worth of referrals, (2) compensation that didn’t reflect fair market price for that services, and (3) failure from the physicians to really supply the services contracted for. The Alert also centered on the truth that a few of the physicians had joined into plans to which the salaries of office staff were compensated for by an affiliated entity. OIG alleged the payment of office staff salaries by an affiliated healthcare entity constituted improper remuneration towards the physicians since it relieved the physicians of expenses they’d otherwise have incurred. Additionally, OIG discovered that the physicians were susceptible to individual financial penalties underneath the CMPL for his or her participation in individuals plans.

Although OIG acknowledged that lots of these kinds of plans are legitimate, if even among the purpose of the arrangement would be to compensate a health care provider for referrals, then your arrangement may violate the AKS. All healthcare organizations and physicians have to be very careful in structuring these plans to suit squarely inside an AKS safe harbor you aren’t violate the AKS.


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