Rivkin Radler issues Health Alert on OIG Fraud Alert from OIG

This week, the Office of Inspector General (“OIG”) issued a Fraud Alert (attached) reminding providers that physicians who enter into compensation arrangements such as medical directorships must ensure that those arrangements reflect fair market value for bona fide services, or face potential criminal, civil and administrative sanctions.  Prompting the Alert were recent settlements reached by OIG with 12 individual physicians under the Civil Monetary Penalties Law.  According to OIG, the physicians “entered into questionable medical directorship and office staff arrangements” that the OIG concluded involved  improper remuneration under the anti-kickback statute.  Under the medical directorship agreements, payments made to the physicians reflected the volume or value of referrals, were not based on fair market value of services performed and were paid even in the absence of any services being performed.  In addition, some of the physicians had agreements with an affiliated health care entity that paid the salaries of the physicians’ front office staff which, the OIG concluded, also constituted improper remuneration to the physicians.