On September 25, the U.S. Department of Health and Human Services Office of Inspector General (OIG) issued Advisory Opinion 23-06, dispensing a noteworthy reminder to the sector. The OIG signaled that even fair market value payments can be implicated under the Anti-Kickback Statute. This announcement came in the context of an anatomic pathology laboratory’s proposal to acquire technical component (TC) services from out-of-network pathology laboratories for individuals insured commercially.
This advisory opinion comes as a warning to all health service providers that compliance with the Anti-Kickback Statute is not as simple as sticking to fair market value compensation. The Anti-Kickback Statute carries potential criminal and civil penalties for parties involved in transactions intended to encourage the referral of business financed by federal health care programs. Consequently, regardless of the ‘fairness’ of compensation received, if the payment is made with intent to induce referrals, it could still be deemed fraudulent.
In the context of the proposed dealings of the anatomic pathology lab, the OIG opined that the lab’s purchase of TC services at a market price could potentially constitute an illegal payment. This is because consideration may be given to motivate referrals from out-of-network pathology labs.
The OIG’s warning does not stop at laboratories alone. Instead, it has broader implications for a range of health care providers and businesses with models that directly or indirectly implicate referrals or Federal health care program business. The fact that the OIG would refuse to approve an arrangement that explicitly seeks to pay fair market value for services is an important reminder that providers should carefully consider all aspects of any transaction, beyond mere compensation.
For more detailed information, please visit the brief authored by Bass, Berry & Sims PLC.