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GOVERNMENT & MEDICINE

OIG warns doctors to scrutinize business arrangements

The inspector general suggests questions physicians should ask to avoid fraudulent practices.

By Tanya Albert, AMNews staff. May 12, 2003.


The government is worried that illegal joint ventures are growing rapidly in the medical community, and it is urging physicians to take the time to make sure their arrangements are on the up-and-up.

The Dept. of Health and Human Services Office of Inspector General in late April released a special advisory bulletin outlining several questions physicians should ask themselves about joint ventures to spot agreements that could violate the anti-kickback statute and land a physician or other health professional in prison.


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"The Office of Inspector General has become aware of a proliferation of arrangements between those in a position to refer business, such as physicians, and those providing items or services for which Medicare or Medicaid pays," the OIG said in its special advisory bulletin.

The office says warning bells should go off if a physician encounters arrangements in which:

  • An owner of the new business -- whether it be a physician, hospital or other entity -- is expanding into a related business that is wholly dependent on patient referrals from the existing business.
  • An owner doesn't operate or commit substantial resources to the new business.
  • The contracting entity, such as the physician, would be a competitor if the written arrangement wasn't in place.
  • The owner is paid based on his or her referrals to the new business.
  • The payments typically vary with the value or volume of the business generated for the new business owner.
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