The Health and Human Services Office of the Inspector General (OIG) recently issued a Special Fraud Alert on laboratory payments to referring physicians.[1]  Specifically, the alert is concerned with Specimen Processing Arrangements and Registry Arrangements, which OIG believes pose substantial risks of fraud and abuse under the federal anti-kickback statute.

With respect to laboratory services, suspect payments generally include laboratory payments to physicians that are above fair market value, for services the laboratory does not actually need, or for which the physician is otherwise compensated.

According to OIG, an inference may be made that one purpose of such payments is to induce federal health care program referrals. Whether an actual violation of the anti-kickback statute has occurred depends on the intent of the parties. (The statute prohibits knowing and willful payment if even one purpose of the payment is to induce or reward federal health care program referrals.)

As mentioned, the most recent alert focuses on two types of arrangements that OIG believes pose a substantial risk of fraud and abuse: (1) Specimen Processing Arrangements and (2) Registry Arrangements.

(1) Specimen Processing Arrangements involve payments from laboratories to physicians for activities such as blood-specimen collection, processing, and packaging for transport. Payments are typically made per-specimen or per-patient-encounter. Among the potential sources of evidence of unlawful intent highlighted by OIG is that payment is for services for which payment is also made by Medicare or another third party.

(2) Registry Arrangements involve arrangements under which laboratories establish, coordinate, or maintain databases on patients who have undergone, or who may undergo, certain tests. The alert is concerned with Registry Arrangements that include payments from laboratories to physicians as compensation for duties such as submitting patient data into the Registry, and reviewing Registry reports. OIG highlights potential sources of evidence of unlawful intent including that compensation is on a basis that takes into account the value or volume of referrals, such as on a per-patient basis.

Finally, the alert reminds readers that, pursuant to either arrangement, both laboratories and physicians may be at risk under the anti-kickback statute.

While OIG does not offer an exhaustive list of characteristics that may be evidence of unlawful intent, parties entering into such arrangements—laboratories and physicians alike—may benefit from reviewing the examples provided in the alert.


[1] The Special Fraud Alert is available here.