Recently the United States Department of Health and Human Services Office of Inspector General (HHS OIG) issued an advisory opinion that should be reviewed to help ensure companies remain compliant with the federal Anti-Kickback Statute (AKS). The advisory opinion was written in response to a request regarding the proposed purchase of the technical component of anatomic pathology services from certain laboratories. Specifically, whether the Proposed Arrangement in the request would constitute grounds for the imposition of sanctions under the exclusion authority of the Social Security Act or the civil monetary penalty provision of the Social Security Act as those sections relate to the commission of acts described in the Federal anti-kickback statute.
The Proposed Arrangement involved laboratories preparing samples to be tested and then referring the business to the requesting laboratories to perform the test. Once the tests were performed, the requesting laboratories would bill commercial insurers and pay the referring laboratories a fair market value per-specimen fee for preparing the samples. This would not involve services paid by federal health care programs, only commercial insurers, but it would likely lead to increased referrals of federal health care program business to the requesting laboratories.
HHS OIG found that the carve out of federal health care programs does not insulate the requesting laboratories from potential liability under the anti-kickback statute. HHS OIG notes that arrangements may implicate the anti-kickback statute even in situations such as this, when the referring laboratories may be in a position to refer business to the requesting laboratories that are billable to federal health care programs. In the opinion, HHS OIG noted that carve outs are not “dispositive” and that “[s]uch arrangements implicate, and may violate, the Federal anti-kickback statute by disguising remuneration for Federal health care program business through the payment of amounts purportedly related to non-Federal health care program business.” HHS OIG even noted that the Requestor itself “predicted that if it did not enter into the Proposed Arrangement, it likely would not receive a significant volume of referrals of Federal health care program business from Physician Laboratories or Non-Physician Laboratories.”
HHS OIG also found that the arrangement would not satisfy the safe harbor for personal services and management contracts and outcomes-based payment arrangements. This is because despite the fees paid to referring laboratories being consistent with fair market value, the arrangements would have been more costly and less efficient overall than if the requesting laboratories handled all aspects of testing themselves. This was emphasized by HHS OIG noting that the referrals would be tied to whether requesting laboratories had in-network contracts with commercial payors.
As is the case with advisory opinions, the opinion is limited to the relevant facts presented by the Requestor in connection with the Proposed Arrangement.