OIG Special Fraud Alert: Anti-Kickback Risks for Physician Arrangements with Laboratories

On June 25, 2014, the Office of Inspector General (OIG) for the Department of Health and Human Services issued a Special Fraud Alert addressing two types of relationships that could potentially violate the anti-kickback statute.

The OIG Special Fraud Alert specifically addresses anti-kickback risks associated with clinical laboratories providing remuneration to physicians to collect, process, and package patients’ specimens and also addresses payments to physicians for activities related to patient registries.

Anti-Kickback Risks Associated with Specimen Collection, Processing and Packaging Arrangements

Typical arrangements cited by the OIG as raising anti-kickback concerns include payments to physicians for blood collection, centrifuging, maintaining specimens at a certain temperature and packaging the specimens in a manner so that they will not be damaged during transports.

The OIG noted that in some circumstances physicians may be compensated by Medicare for specimen processing and packaging and in these circumstances it would be inappropriate for the physician to obtain additional reimbursement from the laboratory.

The OIG listed 6 characteristics of payments that could evidence an anti-kickback violation:

  1. The payment to the physician exceeds fair market value
  2. Payment to the physician is for services that are already compensated by a third party, such as Medicare
  3. Payment is made on a per-specimen basis or other basis that takes into account the volume or value of referrals
  4. Payment is conditioned on the physician ordering a specified volume or type of tests or test that are not reasonable and necessary
  5. Payment is made to a physician even though the services are actually provided by the laboratory’s phlebotomist in the physician’s office

The OIG further cautioned that Anti-kickback concerns are not abated by applying the arrangements only to non-federal health care patients because the payments may still influence referrals payable by federal health care programs.

Registry Payments

The OIG also cautioned physicians and laboratories about anti-kickback risks associated with payments to physicians for submission of data and other administrative tasks related to the maintenance of databases or registries.  Such databases or registries are often established to promote clinical research or better health care in general.

As an example, the OIG stated that physicians are being paid in some cases for submitting patient data, answering patient questions about registries and reviewing registry reports.  The OIG did note that payments to physicians could be reasonable in certain limited situations.

The OIG listed the following characteristics of registry-related payments to physicians which could pose risks under the anti-kickback statute:

  1. Physicians are required or encouraged to perform tests with a stated frequency in order to receive a certain amount of compensation
  2. The laboratory collects comparative data for the registry and bills for duplicative tests or those that are not medically necessary
  3. Compensation to physicians is on a per-patient or other basis that takes into account the volume or value of referrals
  4. Compensation to physicians is not fair market value
  5. Compensation to physicians is not supported by documentation reflecting the physicians’ efforts
  6. Registry arrangements offered by the laboratory are only for the tests that it provides and does not reflect the data from other laboratories
  7. Tests associated with registry arrangements are presented to the physicians on a requisition that includes disease-related panels or similar configurations that make it difficult for the physician to make independent medical necessity determinations

The Special Fraud Alert also reminds physicians that criminal liability can be imposed on both parties to a transaction that violates the anti-kickback statute and encourages physicians and laboratories to submit requests for advisory opinions regarding proposed arrangements.

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