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Paul Zimmerman
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OIG’s Special Fraud Alert Regarding Lab Payments for Referring Physicians

In general, the Anti-Kickback Statute (AKS) operates to protect the public from overutilization of medical services, by prohibiting payments for referrals. A violation that does not qualify for a safe harbor under the statue can result in fines and imprisonment for any party involved in a prohibited transaction. The Office of the Inspector General (OIG) recently issued a fraud alert regarding compensation paid to physicians who refer specimens to laboratories for processing. The report provides a detailed analysis of several types of referral arrangements that it believes are likely to violate the AKS.

The OIG has noted an increase in business arrangements where clinical laboratories pay providers for their specimen referrals. Of particular concern are forms of payment that are above market rates for specimen collection, as well as the processing and handling services for which a collector can legitimately bill Medicare. The OIG also referenced the potential abuse of arrangements that compensate physicians for contributing information to registries maintained by laboratories for the compilation of testing related data that may be of use in clinical research. Some abuses of the registry system described by the OIG include volume requirements for specific or overall tests, data collected from different (but duplicative) tests on the same patient, untimely submissions by physicians of their data, and limitations that relate to ownership of the tests by the performing laboratory. 

Physician groups that send their specimens to outside laboratory should be vigilant about any compensation received from a reference laboratory. Direct specimen collection charges should be carefully scrutinized to ensure that overhead is the only thing being recovered, and that payments are directed to the proper entities. While payment may be made for legitimate research and information gathering activities under a registry arrangement, the more broad the application of the program in terms of tests, physicians and participation protocols, the less likely it will be seen as a prohibited arrangement. 

Whatever a physician’s or group’s arrangement may be with an outside lab, compensation should never be based on the value or volume of referrals to the laboratory, and certainly should not exceed fair market value. Engaging legal counsel or a compliance specialist is recommended to those providers who are concerned about a potential AKS problem with their outside laboratory.

To view the full alert, click below:  https://oig.hhs.gov/fraud/docs/alertsandbulletins/2014/OIG_SFA_Laboratory_Payments_06252014.pdf

This article is not offered as, and should not be relied on as, legal advice. You should consult an attorney for advice in specific situations.