Hospital bid to help doctors with liability gets OK

The OIG says the case falls within "safe harbor" for subsidizing liability insurance, but physicians and hospitals hoping for same arrangement should get legal opinions first.

By Tanya Albert, AMNews staff. Oct. 18, 2004.

Doctors considering letting their hospitals pay a portion of their medical liability insurance don't need to automatically rule out the possibility because they fear breaking federal anti-kickback statutes.

But physicians and hospitals entering into such an agreement do need to take caution.

In a September advisory opinion, the government told a medical center in a health professional shortage area that it could subsidize medical liability insurance for four community-based obstetricians even though the arrangement didn't meet all of the requirements usually necessary for a "safe harbor" from legal trouble.

The opinion by the Dept. of Health and Human Services Office of Inspector General comes nearly two years after the agency issued a letter advising a different hospital that an exception could be made for similar circumstances involving physicians in medically underserved areas.

Although the OIG makes it clear that its advisory opinion applies only to the group that asked for it, physicians and hospitals see the decision as a positive sign for others.

"It signals, happily, that the OIG is willing to look carefully at these issues in underserved areas with at-risk populations," said Albert L. Strunk, MD, vice president of fellowship activities for the American College of Obstetricians and Gynecologists. "It is willing to provide reassurance to institutions that have the right intentions."

American Medical Association officials are "pleased to see that the OIG has provided some leeway for these types of arrangements due to the medical liability crisis that threatens us all," said Board of Trustees Chair J. James Rohack, MD. Liability premium assistance from hospitals is legal under both the federal anti-kickback statute, enforced by the OIG, and the Stark II rules regulating self-referrals, enforced by the Centers for Medicare & Medicaid Services, he said.