On March 25, 2015, the U.S. Department of Health and Human Services Office of Inspector General (“OIG”) posted Advisory Opinion No. 15-04. In the opinion, the OIG addresses a laboratory’s proposal to enter into agreements with physician practices to provide all laboratory services for the practices’ patients. Under the proposed arrangement, the laboratory would waive all fees for those practices’ patients who are enrollees of certain insurance plans that require the patient to use a different laboratory. The OIG reviewed the proposed agreement to determine if it would constitute grounds for the imposition of sanctions, such as exclusion from participation in federal health care programs, civil monetary penalties, and other penalties associated with violating the Anti-Kickback Statute.

The requesting entity (the “Requestor”) is a multi-regional laboratory that provides clinical laboratory, anatomic pathology, and forensic pathology services to hospitals, long-term care and assisted living facilities, physicians, businesses, and government agencies. The Requestor indicated that some of the physician practices to which it provides services expressed a desire to work exclusively with a single laboratory for ease of communication and consistency. The Requestor also noted that approximately 70 percent of its physician practice clients have patients who are enrolled in insurance plans that require their enrollees to use a particular laboratory. According to the Requestor, the applicable patients do not have federal health care program coverage as their primary insurance, but some could have it as their secondary insurance.

Under the proposed arrangement, the laboratory would waive all fees for those practices’ patients who are enrollees of certain insurance plans that require the patient to use a different laboratory. Thus, the laboratory would not bill the patient, the physician practice, or any insurer for the test(s) in these circumstances. However, the laboratory would continue to bill all other patients, whether privately insured or covered by a federal health care program.

The OIG opined that the proposed arrangement could potentially generate prohibited remuneration under the Anti-Kickback Statute by reducing administrative and possibly financial burdens associated with using multiple laboratories. Further, the OIG noted that the proposed arrangement could also violate the prohibition on charging Medicare or state health care programs substantially in excess of the provider’s or supplier’s usual charges.