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Paul Zimmerman

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Questionable Physician Compensation Agreements May Lead to Liability

The Office of the Inspector General (OIG) has recently been targeting physicians who enter into compensation arrangements such as medical directorships. Physicians need to be aware that while their compensation arrangement may be legitimate, the agreement may violate the anti-kickback statute if any purpose of the arrangement is to compensate the physicians for any past or future referrals of Federal health care program business.

OIG reached settlements with 12 physicians who had entered into questionable arrangements. OIG claimed the physician compensation under the medical director arrangements was improper remuneration under the anti-kickback statute. First, the OIG alleged that the arrangements took into account the volume and value of physician referrals and failed to reflect the fair market value of services to be performed. Further, the OIG claimed the physicians did not actually perform the services to be performed per the agreements. Additionally, OIG alleged that several of the 12 physicians had entered into agreements whereby affiliated health care entities paid the salaries of the doctors’ offices staffs; this constituted improper remuneration, according to the OIG, because it relieved the physicians of their financial obligations, deeming them in violation of the Civil Monetary Penalties Law.

The OIG’s recent actions signify that physicians, not just facilities and hospitals, will be targeted for violating the anti-kickback statute. Physicians should consider a thorough review of all arrangements and transactions of paramount importance in order to avoid liability.