Doctor with stethoscope in handcuffs isolated on whiteThe HHS OIG recently issued a brief fraud alert (Fraud Alert) reminding physicians that inappropriate compensation arrangements may lead to enforcement actions under the federal anti-kickback statute and Civil Monetary Penalties Law. Although not mentioned in the Fraud Alert, improper compensation arrangements also raise issues under the federal self-referral law known as the Stark Law.

The Fraud Alert specifically focuses on the facts surrounding recent settlements the OIG has entered into with 12 physicians. The physicians had compensation arrangements, primarily in the form of medical director agreements, with an imaging facility that resulted in improper payments that took into account the volume or value of referrals the physicians made to the facility and exceeded fair market value. Moreover, the OIG has alleged that the physicians did not actually provide the services specified in the agreement. The physicians settled with the OIG under the Civil Monetary Penalties Law for amounts between $50,000 and $200,000 each, and one physician was voluntarily excluded from participating in the federal healthcare programs.

Enforcement agencies have historically instituted actions under the laws referenced above against the entities that pay improper compensation to physicians. The laws have always applied to the physicians who receive the illegal compensation, and the recent settlements with physicians are a concrete sign that the OIG is increasing its focus on physicians.