Federal investigators are warning physicians who serve as medical directors to make sure their compensation agreements aren't violating anti-kickback regulations.
The Department of Health and Human Services' Office of Inspector General (OIG) this week said it recently reached settlements with a dozen physicians across the country who had served as medical directors for various health care organizations. The agency said it determined those physicians' directorship compensation agreements were improper because they were tied to the individual physicians' volume or value of referrals and didn't reflect fair market value of the services they rendered – if they provided any services at all.
In some cases, the physicians also entered agreements that led to an affiliated hospital, health group, or other entity paying the salaries of the physician's office staff. While not paying the physician directly, these arrangements reduced the physicians' actual business expenses, so the inspectors claimed this compensation improper.
The OIG reminded physicians that a compensation arrangement is potentially illegal if any part of it compensates the physician for past or future referrals of federal health care program business. For more information, see "OIG compliance program guidance for individual and small group physician practices" and "A roadmap for new physicians: avoiding Medicare and Medicaid fraud and abuse."
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