A new OIG Advisory Opinion 13-15, the OIG has resurrected the issue of whether awarding exclusive contracts to hospital based providers involves remuneration in exchange for referrals, because it grants the opportunity for access to an income stream.
In the text of OIG Advisory Opinion13-15, the OIG states as follows:
“The OIG has stated on numerous occasions it’s view that the opportunity to generate a fee could constitute illegal remuneration under the Anti-Kickback Statute, even if no payment is made for a referral. Under the proposed arrangement, Requestor would provide the psychiatry group the opportunity to generate a fee equal to the difference between the amounts the psychiatry group would bill and collect for Medicare, Medicaid, and other third-party payors, and patients for requests for anesthesia services, and a per diem amount the psychiatry group would pay to the requestor.”
When this issue was first raised, hospital based groups were objecting to making payments to hospitals for administrative services, or for any other basis, because they argued that the request for the subsidy back to the hospital was a payment in exchange for the opportunity to generate the referral stream. The more recent form of this arrangement is to bill “under arrangements”, or to provide the staffing for the services as in OIG Advisory Opinion 13-15, but receive less than the value of the fee for service payments from the third-party insurers. Under those arrangements, the argument is that the difference is the payment in exchange for the referrals.
Of course, all employment arrangements and other contractual arrangements under which the integrated delivery system does the billing and pays compensation as employment contracts or other contracts raises the same issue, but these arrangements are arguably protected by the Safe Harbors for bona fide employment arrangements and personal service arrangements.
However, the Safe Harbor dodges the fair market value question. The crux of the OIG’s argument and OIG 13-15 is that paying less than the aggregate fee for service payments is somehow not fair market value. On the other hand, any other contractual arrangement, personal service or otherwise, also pays less than the aggregate fee for service revenue stream, so why is that fair market value?