Compliance plan a must for lab contracts

Contract Language. By Steven M. Harris, AMNews contributor. Aug. 1, 2005.

CONTRACT LANGUAGE

A column examining the ins and outs of contract issues

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Referrals by physicians to clinical laboratories in which they have a financial interest actually laid the foundation for the first Stark regulations. And signing an agreement with an outside lab doesn't absolve you of them.

So before you sign such a deal, review it carefully to make sure the contract doesn't violate any anti-kickback provisions.

The Office of Inspector General recently issued an advisory opinion that brings this issue to the fore again.

On June 13, the OIG stated that a laboratory services company would risk administrative sanctions if it provided free blood collection supplies to physicians and paid physicians to collect blood samples.

Under the proposed agreement the OIG reviewed, the physicians' patients would have their blood drawn during their office visit instead of going to a lab. The physicians asked the lab to provide free-of-charge blood-drawing supplies and a per-patient payment for drawing blood between $3 and $6 for each patient. The lab sought to enter into an agreement with physicians to provide the supplies and pay for the blood draws because competing labs were paying referring physicians for blood draws.

The OIG decided that this particular arrangement did not qualify for any exceptions to the anti-kickback statute, including the personal services and management contracts safe harbor. That's because the deal called for paying physicians on a per-patient basis, and compensation would not be set in advance or paid in the aggregate. Therefore this arrangement poses significant risk for fraud and abuse.