In a move that reflects consistently rigorous scrutiny of suspect contractual joint ventures, the U.S. Department of Health and Human Services Office of Inspector General (OIG) has provided further guidance for the IONM industry. On August 18, OIG published Advisory Opinion 23-05, which concluded that an entity’s proposal to aid referring surgeons’ ownership of self-contained intra-operative neurophysiological monitoring (IONM) companies could potentially contravene the federal Anti-Kickback Statute (AKS).
This advisory opinion is the latest in a series by the OIG alerting to the risks of violations of the AKS arising from questionable joint venture structures. The AKS is a criminal law that prohibits the solicitation, offering, or receiving of anything of value in exchange for referrals for services that are reimbursable under a federal health care program.
Under the proposed framework, the entity would assist surgeons in establishing IONM companies which would, in their turn, contract with the entity for the provision of IONM services. The entity’s assistance would include arranging for essentially all the necessary resources, personnel, and capabilities requisite for operating an IONM business.
According to JD Supra article, the OIG suggested that this joint venture might be a poorly disguised compensation arrangement used to reward surgeons for referrals to the entity. The advisory opinion states, “In effect, the referring surgeons would receive most of the profits from the IONM services while the entity would perform a majority of the substantive work involved in providing those services.”
Corporate legal professionals and law firms should closely follow the evolution of this discussion. It further underscores the importance of comprehensive due diligence and prudent structuring in healthcare contractual joint ventures to prevent breaches of the AKS.
The OIG’s continued focus on these types of agreements indicates the ongoing commitment of the agency to crack down on suspect business arrangements, particularly in areas where referrals derived from federal health care programs are at stake.