OIG alert on physician compensation arrangements

The Office of the Inspector General (OIG) has issued a new Fraud Alert relating to physician compensation arrangements. For many years now, both the OIG and the Department of Justice (DOJ) have considered improper compensation relationships as their number one enforcement priority and much has been written on the subject. There are certain commonalities associated with this area:

  • Virtually all the cases relating to this subject arise from whistleblowers, most using the qui tam provision of the False Claims Act (FCA).
  • It is the government’s position that all claims arising from a corrupt arrangement with physicians implicates the Anti-Kickback Statute (AKS), which are considered tainted, meaning false and fraudulent.
  • Most Corporate Integrity Agreements (CIAs) with the OIG have been predicated on DOJ settlements relating to corrupt physician arrangements.

The Fraud Alert emphasizes that physicians who enter into compensation arrangements such as medical directorships must ensure that those arrangements reflect fair market value (FMV) for bona fide services the physicians actually provide. Although many compensation arrangements are legitimate, a compensation arrangement may violate the AKS if even one purpose of the arrangement is to compensate a physician for his or her past or future referrals of federal health care program business. As such, the OIG decided to remind physicians that they should carefully consider the terms and conditions of medical directorships and other compensation arrangements before entering into them.

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