Issued September 17, 2009, and posted Setember 24, 2009
Written by Julie Kass; reviewed by Ingrid Brydolf*
On September 17, 2009, the OIG issued Advisory Opinion 09-16, a favorable opinion relating to referral network that was outside of the anti-kickback statute referral safe harbor.
The opinion requester was a nonprofit 501(c)(6) chiropractic association (Association). The Association proposed to enter into an arrangement with a for-profit referral network for chiropractors (Network). Under the arrangement any chiropractor licensed in the subject state could join the Network. The Network would advertise on the Internet, in print media, and on radio and television. Potential patients calling the Network would be asked their zip code, and contact information for a chiropractor in the patient's zip code would be provided. If more than one chiropractor practiced in a zip code, contact information would be provided in sequence from a rotating list. The Association certified that all of the disclosure requirements provided for in the referral safe harbor (42 C.F.R. ยง 1001.952 (f)) would be made to patients. OIG notes that the Network does not itself provide any services payable by a federal healthcare program and that it does not impose any restrictions on the services the chiropractors provide to the patients that are referred.
The fees paid by the chiropractors to participate in the Network would vary based on whether the chiropractor was a member of the Association. The standard fee would be $200 per month and the fee for an Association member would be $60 per month. Other than the fee paid, Association members would be treated no differently than other chiropractors for purposes of the referrals. In addition, the Network would pay the Association $10 for each member that joined the Network. In return, the Association would promote the Network to its members and non-members through various means. In its analysis, OIG concluded that the proposed arrangement would not meet the referral safe harbor because the amount charged to chiropractors for participation was not uniform. However, OIG found that the difference in amount was not related to the volume or value of federal healthcare program business. Accordingly, OIG did not believe this differential would raise a serious risk of fraud or abuse. While OIG found that the payment from the Network to the Association would vary based on the business generated for the Network, the Network does not provide any federal healthcare program business, and thus the payment to the Association would not implicate the anti-kickback statute. Notably, OIG contrasts this type of Network referral service to Network referral services sponsored by providers, such as hospitals. In its final analysis, OIG looked at the facts that: all chiropractors licensed in the state could participate, the referrals were made on a rotating basis, the Network did not place any requirements on the manner that services had to be provided, and all of the disclosure requirements under the safe harbor would be provided by the Network. In light of these facts, OIG determined that there was minimal risk of fraud and abuse under the arrangement.
*The Fraud and Abuse Practice Group Leadership would like to thank Advisory Opinions Committee Members Julie Kass, Esquire (OBER|KALER, Baltimore, MD), and Ingrid Brydolf, Esquire (Davis Wright Tremaine LLP, Portland, OR), for writing and reviewing, respectively, this summary.