News and Insights
Visit regularly for up-to-date information on relevant news, firm announcements and additions to our AZ Health Law Blog.
The Office of Inspector General (“OIG”) issued a favorable advisory opinion on October 23, 2012, taking the position that there was a low likelihood of abuse where a hospital emergency department made pay per diem payments to specialty physicians for on-call coverage.
This opinion was requested by a tax-exempt, charitable, nonprofit hospital. The hospital pays a per diem fee to 130 specialist physicians to provide unrestricted on-call coverage for its emergency department. The hospital developed the program because of the increasing difficulty in securing specialty physicians for call coverage. The payment does not satisfy a safe harbor for protection from scrutiny under the anti-kickback statute because the aggregate amount of payment is not set in advance. Although the hospital imposes a yearly cap for each specialty providing services, the monthly payments may not reach that cap and will vary over the term of the arrangement. Even given the inability to satisfy a safe harbor, the OIG found a low risk of violation of the anti-kickback statute for a number of reasons. The OIG indicated its concern that the payments could be disguised “lost opportunity” payments, inducements to refer, or payments for unidentified services. The OIG found that the hospital imposed sufficient safeguards to ensure that the per diem payments are fair market value for services actually provided and not determined by the amount or number of referrals or other business generated between the parties.
Among the factors that minimized the potential for abuse, the OIG noted that funds for each specialty were determined annually in advance of the payment. Additionally, the payments were administered uniformly to all physicians that were subject to call coverage requirements as a result of medical staff requirements. These factors offset the risk, according to the opinion, that payments would be made in such a manner as to reward high-volume referrers, or incentivize low-volume referrers.