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OIG Fraud Alert focuses on Physician Compensation Arrangements

Posted By: Bret S. Bissey, MBA, FACHE, CHC, CMPE / May 10, 2016

Office of Inspector GeneralThe OIG, which rarely issues fraud alerts, released one on June 9, 2015 entitled “Physician Compensation Arrangements May Result in Significant Liability.” These type of alerts are rare (since 2011 there have only been four issued) and are indicative of a high-risk area for Fraud and Abuse which is ripe for investigation by agencies of the federal government and a target of whistleblowers.

This fraud alert is targeted at Physicians and directs that all compensation arrangements need to be fair market value and reflect payment for bona fide services that have been provided. Furthermore, the alert states that if any purpose of the arrangement is to compensate a physician for past or future referrals the potential does exist for violation of the anti-kickback statute. This could result in possible criminal, civil or administrative sanctions, including but not limited to exclusion from the federal healthcare programs and potential draconian penalties via the false claims act.

If you are a Physician or work with a Physician Group my professional advice is you focus on the compliance of each of your arrangements with organizations that you refer patients. At MediTract, we work with over 25% of the nation’s hospitals and many Physician Practices to provide automated contract solutions to address these specific concerns.

Ten questions to ask in Physician Organization

In response to this fraud alert some immediate questions to ask in Physician Organizations include, but are not limited to:

  1. How do you validate work described in the agreement has been performed?
  2. Are all your contacts organized in one centralized database so you can interactively monitor and manage this high-risk information?
  3. Are all these arrangements subject to a business and legal review by your experienced healthcare counsel?
  4. Is the work described in the contract bona fide and is it being performed?
  5. Is the work being performed being paid at Fair Market Value and how do you validate this?
  6. If you have different duties should they be paid at different rates?
  7. Does the agreement mention anything about referrals?
  8. Is your partner evaluating the work you are doing and is that evaluation documented?
  9. How do you validate that payments received match the work performed per the agreement?
  10. Do you have a protocol or policy for who approves these agreements?

Be proactive and take responsibility for monitoring your arrangements

Please do not rely upon your arrangement partner to “handle” these issues. A contract which is not compliant will present risk to both the Physician and the Hospital (agreement partner). In addition, please be advised that errors or mistakes in your arrangements do not need to be intentional to be prosecuted. Unintentional behaviors can present significant risk. Be sure due diligence is being performed pro-actively to assure your arrangements are compliant.

Bret S. Bissey, MBA, FACHE, CHC, CMPE

Prior to joining MediTract, Mr. Bissey was the SVP, chief ethics and compliance officer at UMDNJ, where he successfully led the compliance program to adherence with a rigorous five-year Corporate Integrity Agreement with the DHHS/OIG that occurred following a Deferred Prosecution Agreement. Prior to UMDNJ, Bissey served as the director of the Regulatory Compliance Practice at IMA Consulting, the chief compliance and privacy officer at Deborah Heart and Lung Center (operating under a CIA) and the VP of compliance at Cabot Marsh/QuadraMed. Mr. Bissey earned a Bachelor of Science in business administration and marketing from Shippensburg University of Pennsylvania and an MBA in marketing and healthcare administration from Wilkes University. Mr. Bissey is a frequent national speaker on healthcare compliance and is the author of The Compliance Officer’s Handbook. He is a Fellow of the American College of Healthcare Executives and a member of the Health Care Compliance Association (CHC), American College of Medical Practice Executives and the Healthcare Financial Management Association.