By James Swann
Two proposed arrangements in which an anesthesia services provider would
enter into contracts with physician-owned professional corporations or limited
liability companies to provide exclusive services could lead to administrative
sanctions, according to an advisory
opinion (No. 12-06) released June 1 by the Department of Health and Human
Services Office of Inspector General.
The anesthesia provider currently maintains staff at outpatient
surgery/endoscopy centers, which are owned and operated by the physician-owned
professional corporations or limited liability companies, and independently
bills patients and third-party payers, including Medicare.
In one proposed arrangement, the anesthesia provider would pay a management
services fee to the outpatient surgery/endoscopy centers.
In return for the management fee, the outpatient centers would provide
pre-operative nursing assessments, adequate space for the anesthesia provider's
staff (including personal effects and medical records), and help with
transferring billing documents to the anesthesia provider's billing office.
The management fee would be on a per-patient basis and would exclude patients
covered by federal health care programs.
Under the second proposed arrangement, the owners of the outpatient centers
would create subsidiary companies to provide anesthesia services to patients.
The wholly owned subsidiaries would then hire the anesthesia provider as an
independent contractor to provide anesthesia-related services, including:
the subsidiary choose an anesthesia billing company;
quality assurance programs; and
The anesthesia provider would be paid by the subsidiary subject to
OIG said the first arrangement, involving the payment of a management fee,
would implicate the anti-kickback statute.
“The OIG has a long-standing concern about arrangements under which parties
'carve out' Federal health care program beneficiaries or business generated by
Federal health care programs from otherwise questionable financial
arrangements,” the advisory opinion said.
Although the centers would only be charging a management fee for patients not
covered by federal health care programs, the anesthesia provider would be
providing services to all patients, including those covered by federal health
The centers would continue to bill all patients for facility fees, while at
the same time billing the anesthesia provider a management fee for services that
the facility fee is supposed to cover, OIG said.
“In short, the Centers would be paid twice for the same services, and the
additional remuneration paid by the Requestor [the anesthesia provider] in the
form of the Management Services fees could unduly influence the Centers to
select the Requestor as the Centers' exclusive provider of anesthesia services,”
the OIG advisory opinion said.
As for the second proposed arrangement, OIG said it seems “designed to permit
the Centers' physician-owners to do indirectly what they cannot do directly;
that is, to receive compensation, in the form of a portion of the Requestor's
anesthesia services revenues, in return for their referrals to the
OIG said the owners and operators of the centers could receive remuneration
from the second arrangement as a result of the difference between the amount
collected by the subsidiaries for providing anesthesia services and the amount
paid by the subsidiary to the anesthesia provider.
“The OIG has also stated on numerous occasions its view that the opportunity
for a referring physician to earn a profit, including through an investment in
an entity for which he or she generates business, could constitute an illegal
inducement under the anti-kickback statute,” OIG said.
The OIG advisory opinion is at http://oig.hhs.gov/fraud/docs/advisoryopinions/2012/AdvOpn12-06.pdf.