Page 25 - Delaware Medical Journal August 2015

HEALTH & LAW
7 6 5 4 3 2
Physician Directorships
the Focus of NEW FRAUD ALERT
Bruce D. Armon, JD; Karilynn Bayus, JD
On June 9, 2015, the Department of Health and Human Services Office
of Inspector General (OIG) published a one-page fraud alert entitled, “Physician Compensation Arrangements May Result in Significant Liability.” This is the 3rd consecutive OIG fraud alert that focuses upon individual physician behavior.
In 2013, the OIG warned that so-called physician-owned distributorships were “inherently suspect” under the Federal Anti-Kickback Statute (AKS). In 2014, the OIG published an alert that focused on payments to referring physicians from laboratories, reminding physicians that the AKS applies to both the payment and receipt of remuneration for referrals of federal health care business.
In this most recent fraud alert, the
“OIG encourages physicians to
carefully consider the terms and conditions of medical directorships
and other compensation arrangements before entering into them.” The OIG noted that it recently entered into settlements with 12 individual physicians who the OIG alleged entered into “questionable medical directorship
This OIG fraud alert is a reminder that if physicians enter into directorship contracts for their services, they must be fair market value arrangements and the compensation
must not be based on the volume or value
of any referrals under a federal health care program. Ideally, the arrangement should be for personal services and management contracts. Medical directorships can
serve important purposes and the services provided by the physician need to be documented contemporaneously. It appears that OIG is shifting its focus to the conduct of individual providers — as well as facilities — based upon its most recent fraud alerts.
Physicians and physician groups may want to consult with an attorney with respect
to medical director arrangements and compliance with the relevant federal and state fraud and abuse laws.
CONTRIBUTING AUTHORS
■ BRUCE D. ARMON, JD is the Chair of the Health Care Practice and Managing Partner of the Philadelphia office of the Saul Ewing law firm.
■ KARILYNN BAYUS, JD is a member of the Health Care Practice at the Saul Ewing law firm.
Del Med J
| August 2015
| Vol. 87 |
No. 8
249