The Office of Inspector General (OIG) has declined to approve a laboratory's proposal to provide certain services at no cost to dialysis facilities because the arrangement could potentially generate prohibited remuneration and subject the laboratory to administrative sanctions under the anti-kickback statute, according to a recent advisory opinion.
The laboratory provides testing services to dialysis patients pursuant to service contracts with dialysis facilities. The laboratory provides: (1) composite rate tests, which are included in the composite rate that Medicare pays the dialysis facilities and, therefore, are not separately billable; and (2) noncomposite rate tests that are not covered by the Medicare composite rate reimbursement and are separately billable.
Under the proposed arrangement, the laboratory would provide some of the dialysis facilities with services consisting of labeling test tubes and specimen collection containers that are used by the dialysis facilities to send specimens to the laboratory for testing. The laboratory would not charge the dialysis facilities for these services. According to the laboratory, selection of dialysis facilities to receive the free services would be based on whether offering such services would be necessary to obtain or retain a facility's business.
The proposed arrangement would run afoul of the OIG's position on the provision of free or below-market goods or services to actual or potential referral sources. First, the arrangement would provide a financial benefit to the selected dialysis facilities: the receipt of free labeling services that they otherwise would be obligated to provide at their own expense and for which they would receive reimbursement through their composite rate payments. Second, the free labeling services may be viewed as a discount on the amount the selected dialysis facilities pay the laboratory for composite rate tests in exchange for the referral of noncomposite rate tests to the laboratory. Accordingly, the OIG could impose sanctions on the laboratory in connection with the proposed arrangement.
OIG Advisory Opinion, No. 08-06, May 2, 2008, Health Care Compliance Reporter ¶500,185.
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