OIG OKs “Per Click” Fee Arrangement Between Sleep Testing Provider and Hospital
In a recent advisory opinion, the Health and Human Services Office for the Inspector General (“OIG”) evaluated a proposed arrangement whereby a hospital would compensate a sleep test provider on a “per click” basis for sleep testing equipment and services. The OIG concluded that while the arrangement could potentially generate prohibited remuneration under the anti-kickback statute (“AKS”) if the required intent was present, absent such a showing the OIG would not impose penalties.
In Advisory Opinion No. 10-14, the Requestor was a corporate entity (with no physician ownership) that provided sleep disorder diagnostic testing and related services in freestanding facilities and in hospital-owned facilities in multiple states. Under the proposed arrangement (“Arrangement”), the Requestor contracted with a hospital to provide the equipment, technicians, and staff necessary to operate a sleep-testing facility at the hospital. Patients are referral to the sleep-testing facility by physicians, and the hospital employees call patients to schedule overnight sleep studies, confirm insurance, and provide any pre-authorization that may be required.
The Requestor’s technicians perform the sleep studies for the hospital pursuant to a signed, written agreement that specifies all of the services to be provided and the material terms of the Arrangement. The Requestor then charges the hospital a set per-test fee, which Requestor and the Hospital negotiated through an arm’s-length bargaining process.
The Requestor sought an opinion from the OIG for the purpose of determining whether the arrangement would violate the AKS, which makes it a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce or reward referrals or items or services reimbursable by a federal health care program. While there are exceptions and safe harbors to the AKS, the OIG noted that the proposed arrangement did not fit within any of the safe harbors because the Hospital pays the requestor on a per-test basis, and therefore the aggregate amount to be paid is not set in advance.
After the jump - OIG analysis on the Arrangement
However, the opinion ultimately concluded that while the arrangement did technically violate the AKS, the arrangement posed an “acceptably low risk of improperly influencing or rewarding referrals.” Therefore, absent such intent, the OIG would not impose administrative sanctions. The specific factors noted by the OIG were as follows:
- Requestor has no ownership interest in, and no other relationship with, the Hospital;
- Compensation under the arrangement is fair market value (and not at above- or below- market rates);
- Requestor is not owned by the Hospital or any physician;
- No supplemental services, such as marketing, are provided to the Hospital by Requestor;
- No DME or other items/services are provided by Requestor to the Hospital, Hospital patients, or patients tested at the sleep testing facility, directly or indirectly;
- Sleep testing services are ordered and interpreted by physicians without a direct or indirect financial interest in Requestor (and therefore, do not stand to gain from referrals);
- Requestor charges and collects the per-test fee regardless of whether the Hospital ultimately receives reimbursement from the patient or any third-party payor.
Advisory Opinion 10-14 is especially important in that it demonstrates the importance of carefully structuring marketing or referral arrangements whenever any type of volume-based compensation is involved, since such compensation arrangements can never fit within an AKS safe harbor or exception.
Editor’s Note: This post is only to provide a review of a recent OIG opinion, and is NOT for the purpose of providing legal advice. Providers with questions about marketing or referral arrangements should contact an experienced health law attorney to discuss the details of each unique arrangement.
