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OIG issues fraud alert regarding physician compensation arrangements



June 23, 2015

The Office of Inspector General (OIG) in the Department of Health and Human Services released a Fraud Alert in early June to caution physicians who may be engaged in fraudulent compensation arrangements. The anti-kickback statute prohibits arrangements that result in "improper remuneration" for physicians, such as accepting payment in exchange for referrals.


The OIG Alert follows a recent settlement between the OIG and 12 physicians involved in "questionable" medical directorships and office staff arrangements with a chain of diagnostic centers in Texas. Physician compensation allegedly took into account the volume or value of referrals made to federal health care programs, rather than the fair market value of the rendered services. In select cases, the affiliated health care entity relieved physicians of paying the salaries of their office staff in exchange for referrals. Additionally, some of the 12 physicians are purported to have received payment for services they did not provide. 


Because the OIG found that these physicians are an integral part of the fraudulent scheme, they share liability under the Civil Monetary Penalties Law. The OIG stresses that both the physician and the institutions they are contracted with are held accountable for anti-kickback violations, even if only one purpose of the arrangement is to compensate physicians for referrals to federal health care programs. Any act of fraud involving federal health care programs may result in criminal, civil and administrative sanctions.


Click here to read the OIG Fraud Alert. You may also learn more about physician relations in the OIG's "Compliance Program Guidance for Individual and Small Group Physician Practices" and "A Roadmap for New Physicians: Avoiding Medicare and Medicaid Fraud Abuse."


For more information on the federal anti-kickback statute, see CMA On-Call document #1151, "Prohibitions Against Kickbacks and Fee-Splitting." This document, as well as the rest of the California Medical Association's online health law library, is available free to members in CMA's online resource library. Nonmembers can purchase documents for $2 per page.

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