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Digital Issues

Archive >  December, 2013 XIV, No. 12

Legal Update: Anesthesia's Profits Are Off-Limits

The OIG rejects another attempt to extort anesthesia fees.

Mark Weiss, JD

cookie jar DON'T GET GREEDYThe OIG takes a hard line on those who profit from referrals.

The Anti-Kickback Statute is fairly straightforward: It prohibits rewards for referrals. And yet hospitals, surgery centers, physician-owners and others continue to structure shady deals to squeeze extra income out of anesthesia providers. In a recent advisory opinion, federal authorities once again make it clear: Those who seek to profit from anesthesia services are asking for trouble.

Facts of the case
I represented an anesthesia group that requested that recent ruling ( from the Department of Health and Human Services' Office of Inspector General. The group had enjoyed an exclusive contract with a hospital to provide all of its anesthesia services, until a psychiatric group — whose owners included a psychiatrist board-certified in anesthesiology — relocated to the hospital in 2010.

As the group negotiated its contract for the following year, the hospital demanded that the psychiatrist-anesthesiologist be allowed to anesthetize the electroconvulsive therapy (ECT) patients who comprised the bulk of the psychiatric group's practice, independent of the hospital's anesthesia contract.

The next year's contract negotiations amended this carveout, requiring the anesthesia group to provide coverage for the psychiatrist and including an "additional anesthesiologist provision." This provision let the psychiatric group determine whether another provider was needed for ECT anesthesia. If so, the anesthesia group could negotiate to provide those services.

When the need for an additional provider arose and the anesthesia group began to negotiate, the hospital proposed the following arrangement. In providing the services for ECT cases, the anesthesia group would reassign its right to bill and collect for the services to the psychiatric group. The psychiatric group would then pay the anesthesia group a per diem rate, and keep the difference between that rate and the amount it collected.

Authorities' analysis
The anesthesia group presented this proposed arrangement to the OIG, which has stated on numerous occasions that an opportunity to generate a fee can be considered illegal remuneration under the Anti-Kickback Statute, even if no payment is made for referrals.

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