On June 25, 2014, the OIG issued a Special Fraud Alert addressing compensation paid by laboratories to referring physicians. This Special Fraud Alert supplements prior OIG guidance which emphasizes that providing free or below-market goods or services to a physician who is a source of referrals, or paying such a physician more than fair market value for his or her services, could constitute illegal remuneration under the anti-kickback statute. The Special Fraud Alert describes two specific trends that present a substantial risk of fraud and abuse: Specimen Processing Arrangements and Registry Arrangements.
Suspect Specimen Processing Arrangements
According to the OIG, suspect Processing Arrangements typically involve payments from laboratories to physicians for certain specified duties, which may include collecting the blood specimens, centrifuging the specimens, maintaining the specimens at a particular temperature, and packaging the specimens so that they are not damaged in transport. The OIG also raised concerns with arrangements under which clinical laboratories pay physicians to collect and package patients’ swabs or urine specimens or provide free or below-market point of care urine testing cups to health care providers who use the cups to perform billable in-office testing.
Suspect Registry Arrangements
The Special Fraud Alert also addresses suspect Registry Arrangements, whether they are referred to as “registries” or “observational outcomes databases” or by other terminology. Payments are made for establishing, coordinating, or maintaining databases, either directly or through an agent, purportedly to collect data on the demographics, presentation, diagnosis, treatment, outcomes, or other attributes of patients who had tests performed by the offering laboratories. Although Registry Arrangements take various forms, they typically involve payments from laboratories to physicians for certain specified duties, including submitting patient data to be incorporated into the Registry, answering patient questions about the Registry, and reviewing Registry reports.
Characteristics of a Registry Arrangement that may be evidence of an unlawful purpose include:
The laboratory requires, encourages, or recommends that physicians who enter into Registry Arrangements perform the tests with a stated frequency (e.g., four times per year).
The laboratory collects comparative data for the Registry from, and bills for, multiple tests that may be duplicative (e.g., two or more tests performed using different methodologies that are intended to provide the same clinical information).
Compensation paid to physicians is on a per-patient or other basis that takes into account the value or volume of referrals.
Compensation paid to physicians is not fair market value for the physicians’ efforts in collecting and reporting patient data.
Compensation paid to physicians is not supported by documentation, submitted by the physicians in a timely manner, memorializing the physicians’ efforts.
The laboratory offers Registry Arrangements only for tests (or disease states associated with tests) for which it has obtained patents or that it exclusively performs.
When a test is performed by multiple laboratories, the laboratory collects data only from the tests it performs.
The tests associated with the Registry Arrangement are presented on the laboratory’s requisition in a manner that makes it more difficult for the ordering physician to make an independent medical necessity decision with regard to each test for which the laboratory will bill (e.g., disease-related panels).
The Fraud Alert also states that excluding Federal Health Program beneficiaries from the arrangement does not ensure that the anti-kickback or Stark law can be ignored in evaluating the related legal risk. For example, concerns regarding Registry Arrangements will not be abated if the arrangements apply only to data collected from tests performed on non-Federal health care patients.
It is clear from the Special Fraud Alert that Specimen Processing Arrangements and Registry Arrangements between referring physicians and laboratories pose significant risk under the anti-kickback statute and should be avoided.