Issue link: http://viewer.e-digitaledition.com/i/531147
M ANY PHYSICIAN PRACTICES would prefer the consis- tency of working with one lab and the efficiency of using a single interface to transmit results. However, some commercial health care plans require enrollees to use a different lab, or else testing is not paid as a covered benefit. A multiregional lab proposed entering into agreements with physician practices to provide lab services for all of the practices' patients and waive fees for patients enrolled in plans that mandate their using a different lab. Before executing these agreements, the requesting lab prudently sought an advisory opinion from the Office of Inspector General (OIG). On March 25, the OIG issued an unfavorable opinion, warning that the proposal could potentially generate illegal remuneration under the Anti-Kickback Statute, which could result in administrative sanctions, civil monetary penalties, and exclusion of the requesting lab and physicians from Medicare and Medicaid. On its face, the proposal seemed to include a number of safeguards. The requesting lab would sign agreements with physicians to provide all lab services for all the practices' patients regardless of health plan coverage. The proposed arrangement would directly apply to only commercial plans, not to federal health programs and their beneficiaries. While physicians could recommend the requesting lab, patients ultimately remained free to choose their lab provider. If the physician ordered lab tests for a patient enrolled in a plan requiring a different lab, the requesting lab would not bill the patient, the practice, the plan or any secondary insurer for the test. Neither the practices nor physicians would receive any direct financial benefit — incentive bonus or penalty — for utilizing testing services by the requesting lab, which certified that it would not directly provide items, services or financial benefits to practices other than a limited-use interface to transmit results electronically. The OIG has a long-standing track record of issuing unfavorable opinions involving free or below-market services or items that laboratories may offer physicians to solicit or induce referrals. In its latest advisory opinion, the OIG found that, while physicians would not receive any direct payments under the proposal, they would receive indirect remuneration, such as being relieved of interface costs (including maintenance vendor maintenance fees), if they only had to use the requesting lab's interface. The OIG also surmised that the proposal could reduce administrative and financial burdens for physicians that they would otherwise incur if they had to deal with multiple labs. As a result, the OIG found that the proposal might induce physicians to refer Medicare and other federal healthcare program beneficiaries to the requesting lab. The latest advisory opinion illustrates how the OIG will analyze both the potential direct and indirect financial benefits to physi- cians that could affect referrals and result in severe penalties. Joe Feltes is an attorney with Buckingham, Doolittle & Burroughs LLC in Canton and a member of its Health & Medicine Practice Group. He is also the managing partner of Buckingham Canton. For more information about the law firm, go to www.bdblaw.com or e-mail Feltes at JFeltes@BDBLAW.com. ■ The Office of Inspector General has a long-standing track record of issuing unfavorable opinions involving free or below market services or items that laboratories may offer physicians to solicit or induce referrals. Nixes Lab Proposal to Physicians By Joseph J. Feltes, JD Office of Inspector General 1 0 | Cleveland/Akron/Canton MD NEWS ■ M D N E W S . CO M ■ J U LY/AU G U S T 2 0 1 5