Professional Compensation

A recent OIG Advisory Opinion (Adv. Op. 13-15) is, to a certain degree, more interesting for one of its footnotes than the body of the opinion itself. The footnote addresses a hotly debated issue, originally raised in an OIG Management Advisory Report (MAR) in 1991. That MAR took the position that an agreement between a hospital and a hospital-based physician group was a “suspect arrangement” under the Anti-Kickback Statute because the physician group was essentially required to split its revenue with the hospital–including requiring the group to provide uncompensated services to the hospital.

The OIG modified this position somewhat in the Supplement Compliance Program Guidance for Hospitals in 2005. In that compliance guidance, the OIG stated that an exclusive arrangement that required a hospital-based physician group to provide “reasonable administrative or limited clinical duties directly related to the hospital-based profession services at no or a reduced charge” would be permissible. The Compliance Guidance cautioned, however, that uncompensated or below-market-rate services would still be subject to “close scrutiny.”

The jury in the Tuomey case (U.S. ex rel. Drakeford v. Tuomey Healthcare Systems, Inc.) returned a verdict in favor of the government yesterday, May 8, 2013.  As is well known, this is the re-trial of a case centered on a series of employment agreements that Tuomey Healthcare entered to allegedly capture referrals…

On February 1stthe long overdue final rule of the Sunshine Act was released.  The Act aims to increase transparency relating to payments and investments held by physicians and teaching hospitals.  For those many physicians who have entered into some type of contractual relationship with a manufacturer, taking the time to familiarize themselves with…

The Office of Inspector General (OIG) of the Department of Health and Human Services has concluded that a per diem payment structure between a not-for-profit hospital and specialist physicians would not result in administrative sanctions under OIG’s civil monetary penalties law that relates to prohibited remuneration by the anti-kickback statute. According to an OIG Advisory Opinion that was posted this week:

Each year, [the hospital] allocates an aggregate annual payment amount per specialty for on-call coverage payments to participating physicians based on: (1) the likely number of days per month the specialty would be called; (2) the likely number of patients a participating physician would see per call day; and (3) the likely number of patients requiring inpatient care and post-discharge follow-up care in a participating physician’s office (OIG Advisory Opinion 12-15)

Once the aggregate amount per specialty is determined, the hospital divides this amount by 365 days to create the on-call coverage per diem fee to be paid to the specialty physicians. Notably, these physicians receive the per diem fee for each day of coverage under the arrangement even if they are not contacted by the emergency department to treat a patient.

Numerous elements of the particular arrangement at issue were highlighted by OIG as minimizing the risk of fraud and abuse. First, the per diem payment was certified by an independent consultant as commercially reasonable and within the range of fair market value for actual and necessary services. It was also calculated without regard to referrals or other business generated by the participating physicians. The OIG highlighted that the per diem amount was calculated annually in advance and was uniformly administered without regard to the individual physician’s referrals.

Husch Blackwell Healthcare Department Chair Curt Chase and his co-presenters explore common hospital/physician relationships that generate serious and complex compliance issues at HCCA’s 16th Annual Compliance Institute in Las Vegas, NV.  They provide methods for effectively auditing, managing and conducting internal investigations and evaluate disclosure options and appropriate fixes.

To read the presentation, click below.