New OIG Fraud Alert Highlights Enhanced Scrutiny of Physician Compensation Arrangements

On June 9, 2015, the Office of the Inspector General of the US Department of Health and Human Services (OIG) issued a new fraud alert regarding compensation arrangements between physicians and entities to which they refer.  The alert notes that the OIG has recently entered into several settlements with physicians who were parties to arrangements in which the compensation paid to the physicians was allegedly not fair market value and took into account the volume or value of the physicians’ referrals and which did not require the physicians to provide bona fide services in exchange for the compensation.  While these issues are not new and do not represent any change in law, there has been a noticeable uptick in enforcement actions against individual physicians (as opposed to larger health care entities and providers) and, in particular, those involved in compensation arrangements with entities to which they refer, such as medical directorships.  Many of these investigations have resulted in settlements involving millions of dollars in repayment obligations by the physicians and, in some cases, prison sentences.  The fact that the OIG published this alert is clear evidence of its enhanced scrutiny of physicians and physicians should therefore carefully analyze such proposed arrangements for compliance with the federal health care fraud and abuse laws.

A copy of the OIG alert can be found here: https://oig.hhs.gov/compliance/alerts/guidance/Fraud_Alert_Physician_Compensation_06092015.pdf.

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