On June 9, the Office of Inspector General of the U.S. Department of Health and Human Services (OIG) issued a fraud alert regarding the risk of liability to physicians arising out of legitimate compensation arrangements, including medical directorships. The OIG fraud alert warns physicians that even in a legitimate compensation arrangement for the provision of services, offering or exchanging anything of value to induce the referral of federal healthcare business will violate the federal Anti-Kickback Statute (AKS). 

The fraud alert points out that the AKS will be violated if just one purpose of an arrangement is to compensate a physician for past or future referrals for items or services covered by federal programs, including Medicare and Medicaid. Physicians are urged to ensure that their compensation arrangements, including medical directorships, reflect fair market value for bona fide services actually provided by the physician.

The release of this latest fraud alert follows recent OIG settlements with 12 physicians who were alleged to have received improper remuneration under certain medical directorship and office staff arrangements in violation of the AKS. The physicians’ compensation arrangements allegedly took into account the volume or value of referrals and did not reflect the fair market value of the services actually performed by the physicians.