The opinion concerns a proposal to pay bonuses to its employed physicians based on net profits derived from certain procedures performed by the physicians.
Simply stated, “[p]ursuant to section 205 of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), Public Law 104–101, codified at section 1128D of the Social Security Act (Act), the Secretary must publish advisory opinions regarding the application of the Federal anti-kickback statute and the safe harbor provisions, as well as certain other administrative sanction authorities, to parties’ proposed or existing arrangements.”
For those unfamiliar with U.S. Department of Human of Health and Human Services Office of the Inspector General’s (HHS OIG) advisory opinions, an advisory opinion may be requested with regards to the following:
Importantly, the respective advisory opinion only applies to the person requesting the opinion. Recently, HHS OIG issued Advisory Opinion No. 23-07. The “Proposed Arrangement” was found favorable (not to say that it cannot be reversed by the OIG at a later date) and is premised on the request to evaluate a “proposal to pay bonuses to its employed physicians based on net profits derived from certain procedures performed by the physicians.” Here are some key take-aways of the proposed arrangement and the OIG’s Opinion:
They key, a safe harbor was met as available under the AKS. Notably, the OIG expressly stated that “a similar arrangement involving bonus payments to independent contractor physicians or other nonemployees or under a different corporate structure (in which, for example, the physicians were owners of the ASCs and paid themselves the bonuses contemplated by the Proposed Arrangement as ownership distributions) may raise fraud and abuse concerns.”
All that glimmers is not gold. Entities and lawyers alike should take note that a safe harbor was met in this instance. And, if one is not met, the barn door is open for enforcement action, whether directly through the OIG or a False Claims Act case.
Rachel V. Rose, JD, MBA, advises clients on compliance, transactions, government administrative actions, and litigation involving healthcare, cybersecurity, corporate and securities law, as well as False Claims Act and Dodd-Frank whistleblower cases.