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Legal Alert: OIG
Advisory Opinion No. 04-17
DATE:
DECEMBER 17, 2004
TO:
CLIENTS & FRIENDS
FROM:
MARK A. COEL, ESQ., TRANSACTIONAL AND REGULATORY
DIVISION
RE:
OIG RELEASES ADVISORY OPINION NO. 04-17
In Advisory Opinion No.
04-17, just issued on December 17, 2004, the OIG
determined that a proposed arrangement between a
pathology services company (Company) and various
physician group practices could potentially violate
the Federal Anti-Kickback Statute. Under a variety
of service contracts and leases with each group
practice, the Company proposed to furnish all
management and all pathology services, equipment and
space necessary for the operation of each groups'
off-site pathology laboratories, an arrangement
similar to some "block lease" transactions. The
groups would bill patients or insurers directly for
such services, for which the Company would receive a
flat monthly fee, a per-specimen fee and, if
applicable, a billing fee.
The OIG determined that,
even if the various service contracts and leases
making up the proposed arrangement complied with the
safe harbor conditions applicable to such
agreements, the safe harbors would only protect the
remuneration paid thereunder by the physician groups
to the Company for actual services rendered or
equipment and space rented. The OIG determined that
the profit retained by the physician groups in the
form of the difference betweenthe reimbursement
received by them from Medicare and the fees paid to
the Company for its services might be considered
impermissible remuneration if the requisite
"kickback" intent under the statute could be
established.
While facts peculiar to the
proposed arrangement may have driven the result in
this Opinion, it raises serious concerns regarding
the OIG's willingness to disregard safe harbor
compliant service contracts and leases whenever a
referral source may be in a position to make more
than it is paying for the provision of the technical
component of Medicare-covered services. |
