Category Archives: Special Fraud Alert

OIG Publishes Special Fraud Alert Regarding Laboratory Payments To Referring Physicians – Some Arrangements May Violate the Anti-Kickback Statute

The laboratory market has become quite competitive in recent years, raising compliance concerns and investigations into lab relationships with referring physicians. Accordingly, on June 25, 2014, the OIG released a Special Fraud Alert (the “Fraud Alert”) which provides guidance about two different types of suspect arrangements: (1) Blood-Specimen Collection; and (2) Registry Payments. The concerns raised here by the OIG involve referring physicians receiving payments from laboratories who may not even be aware that these arrangements are violating the Anti-Kickback Statute due to their complicated nature.

The OIG explained that it is concerned about arrangements in which a lab pays a physician more than fair market value (“FMV”) for the physician’s services or for services the lab does not actually need or for which the physician is compensated. The four major concerns typically associated with kickbacks involving labs include: (1) corruption of medical judgment; (2) overutilization; (3) increased costs to the Federal health care programs and beneficiaries; and (4) unfair competition. These concerns arise because arrangements with labs could induce physicians to order tests from a lab that provides them with payment, rather than utilizing laboratories that provide the best, most clinically appropriate service. Indeed, the choice of which laboratory to use and whether to even order lab tests are decided by or at least strongly influenced by the physician. Continue reading

OIG Publishes Special Fraud Alert regarding Physician-Owned Distributors (“PODs”) – Describes PODs as “Inherently Suspect”

Over the last several years, there has been a noted proliferation in the growth of physician-owned distributors (“PODs”). Along with this growth has come increased scrutiny and speculation as to the legality of PODs, with highly vocal critics and proponents on both sides of the debate. In fact, the Office of the Inspector General’s (“OIG”) 2013 Work Plan noted that the OIG planned to examine PODs in connection with reports of high utilization of spinal implants by hospitals associated with PODs.

Accordingly, on March 26, 2013, the OIG released a Special Fraud Alert (the “Fraud Alert”) which provides long-awaited guidance concerning the legality of PODs. Continue reading