Summary of OIG Advisory Opinion 08-22

From the American Health Lawyers Association (www.healthlawyers.org):

On December 8, 2008, the Department of Health and Human Services, Office of Inspector General (OIG) issued Advisory Opinion 08-22, in which the OIG concluded that the part-time employment of two physicians would not generate prohibited remuneration under the anti-kickback statute, and thus would not result in sanctions. The Requestor of the opinion is a nonprofit, tax-exempt corporation established for the purpose of employing physicians. It is wholly owned by another corporation, which is not identified, and the relationship between the physicians and the parent entity is not part of the OIG's analysis. Each of the physicians maintains medical practices separate and apart from the Requestor. The Requestor would employ the two physicians on a part-time basis to perform endoscopies on the Requestor's premises. The amount paid to the physicians would be consistent with fair market value.

The OIG analyzed the part-time employment arrangement under the statutory employment exception and the regulatory definition of "remuneration." In doing so, the OIG noted that the Requestor certified that the physicians would be bona fide employees and they would be paid for professional services they personally perform. Further, endoscopy services are paid for in whole or in part by Medicare, Medicaid, or other federal healthcare programs. Accordingly, the OIG found that the part-time employment arrangements would meet the statutory exception for employment arrangements, and that the compensation paid to the physicians would not constitute prohibited remuneration under the anti-kickback statute.

Of particular interest, although the Requestor certified that the amounts paid to the physicians would be fair market value, the OIG specifically states that it did not rely on the certification in rendering its opinion. Further, the OIG explicitly limits its opinion to the anti-kickback statute and contrasts the anti-kickback statute with the Stark self-referral statute, for which fair market value is a criterion.

*The Fraud and Abuse Practice Group Leadership of the American Health Lawyers would like to thank its Advisory Opinions Task Force members Julie E. Kass (Ober Kaler, Baltimore, MD) and Joseph M. Kahn (Nexsen Pruet PLLC, Greensboro, NC), for respectively writing and reviewing this summary.

About the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.