MRI investment guidelines stress value of arm's length

Contract Language. By Steven M. Harris, AMNews contributor. Aug. 4, 2003.

CONTRACT LANGUAGE

A column examining the ins and outs of contract issues

SEE ARCHIVES

The Office of Inspector General recently issued two advisory opinions regarding physician-hospital joint venture ownership of freestanding MRI facilities.

In both cases, the OIG stated that while both proposed joint ventures potentially could generate prohibited remuneration under the federal anti-kickback statute, it will not impose administrative sanctions in connection with the proposed arrangements if certain factors are addressed within applicable contracts.

While both opinions are not intended by the OIG to be relied upon by any person other than the requestors of these opinions, the following contract issues should be used as guidelines:

• Physician investors are not referral sources for the MRI or hospital.
• A small percentage of the MRI's referrals, less than 10%, will come from the hospital or physicians who are employed by the hospital, and the hospital will continue to own and operate its own radiology department.
• The hospital demonstrates that it will take the following steps to limit its ability to direct or influence referrals: refrain from taking any action to require or encourage affiliated physicians to refer patients to the facility; not track referrals made by affiliated physicians to the MRI; pay affiliated physicians compensation, whether pursuant to employment or personal services contracts, that will not be related directly or indirectly to the volume or value of referrals or other business generated by such physicians to or for the MRI; and pay such compensation with fair market value in arms' length transactions.