Advisory Opinion 08-10 (Aug. 26, 2008)

This opinion involved a joint venture between a cancer treatment facility and urology groups, where the urology groups would lease space, equipment and personnel to treat prostate cancer patients. The OIG found several features of the joint venture worrisome. The first concern, relates to the expansion by the urologists into a line of business where the success of the business could depend on referrals from the urologists. Second, the OIG noted that the same services were already provided by the facility (which billed Medicare) and the urology group referred patients to the facility for treatment, prior to formation of the joint venture. Third, the OIG was unable to exclude the possibility of prohibited kickbacks to urologists from the treatment facility. Thus, this type of venture could result in improper remuneration to the urology groups, which in turn, could result in federal penalties. A copy of the opinion is available by clicking here.

Advisory Opinion 08-09 (July 31, 2008)

This opinion concerned a medical center’s arrangement to share a percentage of its cost savings with groups of orthopedic surgeons and neurosurgeons resulting from changes in operating room practices. The hospital identified 36 cost saving measures, including reducing surgical waste and product standardization for spine fusion surgeries. Although the OIG indicated that the arrangement could constitute an improper payment to induce the reduction or limitation of services and could potentially generate prohibited remuneration under the anti-kickback statute, the OIG concluded that it would not impose administrative or other sanctions. The OIG issued a favorable advisory opinion, noting that these types of gainsharing arrangements can be properly structured to serve legitimate business and medical purposes by increasing efficiency and decreasing waste. However, because gainsharing arrangements can influence physician judgment in a manner detrimental to patient care, they have to be carefully structured. A copy of the opinion is available by clicking here.

Advisory Opinion 08-08 (July 25, 2008)

This opinion addressed an investment in an ambulatory surgery center (ASC) by a group of orthopedic surgeons and a hospital. Under the arrangement, the physicians would own 70 percent of the ASC and the hospital would own the remaining 30 percent. The OIG issued a favorable advisory opinion, noting that the vehicle for profit would be the procedures actually performed by the physician-investors, rather than the referrals by these physicians, which made the arrangement less risky. In addition, the OIG concluded that the arrangement does not qualify for safe harbor for ASCs jointly owned by physicians and hospitals. A copy of the opinion is available by clicking here.