On June 9, 2015, the OIG issued a Fraud Alert entitled “Fraud Alert: Physician Compensation Arrangements May Result in Significant Liability”.  This is just a one page letter warning hospitals and physicians by stating the OIG recently reached settlements with 12 individual physicians who entered into questionable medical directorship and office staff arrangements; the settlements presumably included the entities paying those compensation arrangements as well.

The Fraud Alert covered no new ground.  It states the arrangements were questionable for a number of reasons, including:

  • Taking into account the value or volume of referrals
  • Not reflecting fair market value
  • Failing to actually provide services required by the agreement
  • Arrangements that covered other physician financial responsibilities such as reimbursement for office staff salaries.

The alert also provides website addresses for guidance provided previously by the OIG, including “Compliance Program Guidance for Individual and Small Group Physician Practices” and the OIG “Road Map for New Physicians: Avoiding Medicare and Medicaid Fraud and Abuse”.