OIG Permits Physician-Employer to Retain Profits from Anesthesia Services Provided by CRNA in Physician Office and ASC

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A pain management practice that employs a certified registered nurse anesthetist (CRNA) to provide anesthesia services in both an office location and an ambulatory surgery center (ASC) owned, in part, by the physician-owner of the practice was given the green light by the Office of Inspector General (OIG) to retain profits earned pursuant to a reassignment of billing rights.

In Advisory Opinion 21-15, the OIG reviewed two aspects of the arrangement that implicated the federal Anti-Kickback Statute (AKS). First, the OIG found that the employment safe harbor protected the salary payment from the physician to the employed CRNA. Second, the OIG considered the opportunity for the physician to earn a profit from the CRNA’s performance of anesthesia service and concluded that it would not impose sanctions under the AKS because it is a “commonplace practice in the healthcare industry.”

Advisory Opinion 21-15

The OIG stated that the arrangement involved a pain management practice that a single physician owns. The practice employs a CRNA part-time to perform anesthesia services in the practice’s office and an ASC. The ASC is owned 80% by the physician-owner of the pain management practice and 20% by another physician. According to the request, the CRNA reassigns the right to receive reimbursement for the anesthesia services that the CRNA performs either in the office or the ASC pursuant to an employment arrangement. The practice pays the CRNA a salary for these services. The practice, in turn, assumes responsibility for the CRNA’s performance of anesthesia services. The practice performs billing for the CRNA’s anesthesia services, all tasks associated with hiring other CRNAs, and human resources functions. The practice also carries liability insurance that covers its vicarious liability with respect to the CRNA.

In analyzing this arrangement, the OIG found two streams of remuneration between the practice and the CRNA that implicated the AKS. The OIG, however, noted that it was not expressing any opinion regarding remuneration between the ASC and either the physician-owner of the practice or the CRNA.

First, the practice pays the CRNA remuneration in the form of salary paid in exchange for the CRNA performing anesthesia services. Because the CRNA orders and arranges for items reimbursable, at least in part, by federal healthcare programs, the AKS is implicated. The OIG notes that this first stream is protected because the practice certified that the CRNA is a bona fide employee and, thus, the wages are protected by the employment safe harbor (42 C.F.R. §1001.952(i)).

Second, by reassigning the right to bill to the physician-owner’s practice, the CRNA is giving the practice the opportunity to earn a profit from the anesthesia services. Because the physician-owner of the practice refers patients to the CRNA for anesthesia services and otherwise arranges for the purchase of anesthesia services performed by the CRNA that are reimbursable, at least in part, by federal healthcare programs, the AKS is implicated.

In analyzing this second stream of remuneration, the OIG first notes that the employment safe harbor is not applicable because it only protects remuneration that flows from the employer to the employee. Nevertheless, the OIG concludes that the second stream of remuneration is “sufficiently low risk” because it involves a “straightforward” employment arrangement involving the reassignment of billing rights from the CRNA to an employer. The OIG adds that such arrangements are a “commonplace practice in the healthcare industry.”

Practical Takeaways

While Advisory Opinion 21-15 is brief for an advisory opinion, it offers some helpful insights. The opinion confirms that the AKS is potentially implicated every time a practitioner reassigns their billing privileges to an entity. In the instant case, the physician owner of the practice refers the patient for the procedure and, thus, the anesthesia services. However, Advisory Opinion 21-15 includes a reference to the “arranges for the purchase” language of the AKS, which seems to suggest that any entity that employs a practitioner under a reassignment arrangement would potentially implicate the AKS. The functions performed by an employer would presumably always be sufficient to trigger the “arranges for” language. That said, the OIG also recognized that while the AKS was potentially implicated, there was nothing inappropriate about such reassignment arrangements as they are “commonplace practice in the healthcare industry.”

In the context of ASCs, there has been some uncertainty in the industry about whether physician owners of ASCs who perform procedures in those ASCs are permitted to profit from the anesthesia services associated with the ASC procedures they referred. Advisory Opinion 21-15 indicates that physician owners of ASCs can profit from anesthesia services where the CRNA performing the anesthesia services is a bona fide employee and reassigns their right to bill to the physician owner (or their group).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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