Feds signal sharper scrutiny of doc pay deals

HHS has signaled its intent to more rigorously enforce the anti-kickback statute against individual physicians who enter into improper payment deals, following a dozen recent civil settlements involving doctors.

HHS’ Office of Inspector General issued a fraud alert last week that warned doctors to avoid agreements such as medical directorships that could violate the statute. It said doctors’ compensation must reflect fair market value for services provided.

It’s common for doctors to be employed by provider organizations as medical directors, but those arrangements might violate the anti-kickback law when their purpose is to get more referrals from those doctors, according to the alert.

The OIG is hiring additional lawyers to look into taking more administrative actions against doctors involved in such arrangements, Kevin Barry, a deputy chief in the OIG’s office, said at an American Bar Association’s health law conference last week.

“What we’re seeing is OIG taking more of an interest in pursuing the physician side of the question, at least looking at if a physician has some role to play or liability in the conduct,” said Tony Maida, a partner at McDermott Will & Emery, and a former deputy chief of the OIG’s Administrative and Civil Remedies Branch.

The alert said that while “many compensation arrangements are legitimate, a compensation arrangement may violate the anti-kickback statute if even one purpose … is to compensate a physician for his or her past or future referrals.”

Maida notes that the new alert is the third in three years involving physicians. In 2013, the OIG issued a fraud alert about physician-owned device distributorships, and in 2014, it issued a fraud alert about laboratory payments to physicians.

The OIG reached settlements recently with 12 individual physicians who entered into “questionable” medical directorship and office staff arrangements, the agency said. In those cases, the government alleged that payments to physicians took into account the volume or value of their referrals, or did not reflect fair-market value, or the doctors did not actually provide the services outlined in their agreements. In some cases, the OIG alleged that doctors entered into agreements in which an affiliated healthcare entity paid the salaries of their office staff.

Those settlements were with doctors who had signed medical-director and referral-coordinator deals with Fairmont Diagnostic Center and Open MRI in Houston. Fairmont did not respond to requests for comment.