Season Change Brings Flurry of OIG Opinions
BLOG: Amid a series of Advisory Opinions issued by the U.S. Department of Health and Human Services (HHS) Office of the Inspector General (OIG), recent statements by the OIG emphasize a continued need for compliance and focus by the OIG on the healthcare industry. This follows a statement by OIG Inspector General Christi Grimm in her keynote speech to the Health Care Compliance Association’s (HCCA) Annual Compliance Institute earlier this year that the increasingly complex healthcare landscape with new, complex business models and an increase in private equity investors necessitate “practiced risk assessment and expert compliance methods to ensure that health care providers deliver high quality care and use sound financial management, as well as reduce organizational risks that may arise from powerful new incentives.”
In this week’s HLS Weekly Wrap, we provide a brief overview of the OIG’s recent opinions:
On October 25, the OIG issued an unfavorable opinion in connection with a proposal by a cochlear impact manufacturer (the requestor) to offer and provide a device and a free compatible hearing aid to eligible candidates. The OIG determined that the proposed arrangement would violate the Federal anti-kickback statute (AKS) by offering and providing free remuneration in the form of a free hearing aid to eligible patients that may induce them to order and purchase the device, which is an item reimbursable by Federal health care programs. Further, the proposal would implicate the beneficiary inducements civil monetary penalty because the offer and transfer of the hearing aid could improperly influence a beneficiary to select the manufacturer for the order and receipt of the hearing aid.
In Ad. Op 23-07, the OIG blessed a profit-based bonus plan for bona fide physician employees. Under the proposed arrangement, the requestor (a multi-specialty physician practice) proposed to implement an employment compensation bonus methodology in exchange for performance of outpatient surgical procedures at ambulatory surgical centers operated by the practice. The physician employees would receive a thirty percent bonus of the practice’s net profits attributable to that physician’s procedures, in addition to their base employment compensation. The OIG concluded very broadly that the bonus compensation would be protected by the statutory exception and regulatory safe harbor for employees because the employees constitute bona fide employees of the practice, and the bonus compensation is for providing services where payments are made in whole or in part under a Federal health care program.
The OIG issued an unfavorable advisory opinion in Ad. Op. 23-06 in connection with a proposal by an independent pathology laboratory (the requestor) to global billing pathology services. Under the proposed arrangement, a physician practice or non-physician-owned pathology lab would refer specimens to the requestor to perform the technical component (TC) and professional component (PC). The requestor would then contract the performance of the TC back to the physician practice or non-physician-owned pathology laboratory pursuant to written agreements with physician and non-physician laboratories that would require purchase of the TC of anatomic pathology services for certain anatomic pathology tests for commercially insured patients. The Agency determined that the proposed arrangement would be in violation of the Federal AKS because it would involve remuneration to a party that is in a position to make referrals for items and services that may be paid for, in whole or in part, by a Federal health care program.
In Ad. Op. 23-05 the OIG evaluated risks associated with certain intraoperative neuromonitoring (IONM) services arrangements. The OIG concluded that arrangements involving an IONM service provider’s assistance to surgeons in the formation and operation of turnkey surgeon-owned entities for the provision of IONM services could generate prohibited remuneration under the federal AKS.