OIG broadens ability of hospitals to recruit
A key: No referral requirements
A nonprofit hospital’s recent proposal to recruit a head and neck surgeon might generate compensation that is technically illegal under the federal anti-kickback statute, but the Office of Inspector General (OIG) says it will not apply sanctions in that situation, according to a newly released OIG advisory opinion.
The rural hospital offered a recent medical school graduate either a loan or an undisclosed amount to pay for his five-year residency in otolaryngology and head and neck surgery. In return, the physician had to agree to establish and maintain a medical practice within three miles of the city in which the hospital is located for at least three years after completing his residency. In turn, the hospital would forgive one-third of the physician’s payment obligation for every year the physician complied with the agreement. The physician also was asked to accept patients referred by the hospital regardless of their ability to pay, to assist the hospital in its physician recruitment program, and to engage in other duties.
The OIG says it approved this proposal because it was not conditioned upon the physician making referrals to, or otherwise generating business for, the hospital. In addition, the OIG liked the fact that many of the physician’s patients would be members of a medically underserved population. The OIG’s opinion noted that it considers the following factors when determining if a physician recruitment deal is appropriate under the anti-kickback law:
— documented evidence of an objective need for the practitioner’s services;
— any indirect benefit from the deal to someone who might be in a position to refer patients to the hospital;
— whether the practitioner has an existing patient base within the designated area from which the hospital might benefit;
— whether the recruitment agreement is narrowly tailored and spells out how long incentives will remain in place.
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