Menu
Button: Make a Payment Button: Newsletter Mailing List

Icon: Healthcare LawHands-On Experience

Providing legal advice

and services since 1977

Healthcare Newsletter

Free Access to Electronic Interface - kickback?

March 20, 2013

Determining what constitutes operating "compliantly" requires an understanding of the many applicable laws, rules and regulations in place impacting physicians.  Many times the actual "law" is not clear on its face, but requires some level of interpretation.  To help us wade through the thicket, government agencies thankfully play a role in such interpretation.  Once such agency is the Office of Inspector General, which issues advisory opinions requested in response to requests submitted by the public on proposed arrangements.  Specifically, the Office of Inspector General addresses whether a proposed scenario would constitute an improper arrangement under Federal law under the anti-kickback statute and other OIG sanction statutes.  Click here for more info on OIG's purview.  The function the OIG provides by providing advisory opinions is incredibly helpful to anyone attempting to practice compliantly and looking to limit their exposure.  Anytime a service or remuneration is provided or given without adequate consideration (as determined by an objective standard) and a Federally funded plan is involved, the Federal anti-kickback is implicated.  Meaning, in many situations that may arise, you may very well be in violation of a Federal law, which as you can imagine has significant ramifications. 

An example of a positive opinion issued by the OIG that will play a greater role in coming days, is a clarification made in a recent opinion by the OIG that provides that free access to an electronic interface
, under the facts provided, would not likely create potential liability under the anti-kickback statute.  The facts presented that a hospital would provide free access to an electronic interface to community physicians and physician practices that would allow those physicians and practices to transmit orders for certain services and receive the results of those services from the hospital. 

In its analysis OIG explains its position on the provision of free or below market goods or services as follows:

such arrangements are suspect and may violate the anti-kickback statute, depending on the circumstances....[t]he general rule of thumb is that any remuneration flowing between hospitals and physicians should be at fair market value . . . . Arrangements under which hospitals . . . provide physicians with items or services for free or less than fair market value . . . [or] relieve physicians of financial obligations they would otherwise incur . . . pose significant risk.” 70 Fed. Reg. 4858, 4866 (Jan. 31, 2005).

OIG has also distinguished between free items and services that "are integrally related to the offering provider’s or supplier’s services and those that are not". By example, OIG has provided that a free computer provided to a physician by a laboratory would have no independent value to the physician if the computer could be used only, for example, to print out test results produced by the laboratory. In contrast, a free personal computer that the physician could use for a variety of purposes would have independent value and could constitute an illegal inducement. 56 Fed. Reg. 35952, 35978 (July 29, 1991) (preamble to the 1991 safe harbor regulations).

Here, OIG determines that because the free access to the Interface would be to all Physicians who request it, as well as support services necessary to maintain the Interface to all Physicians who need it, and that access to the Interface would be used by Physicians only to transmit orders for laboratory and diagnostic services to the hospital and to receive the results of those services, the Interface access would be integrally related to the hospital’s services.  Therefore, the free access would have no independent value to the Physicians apart from the services the hospital provides a
nd would not constitute potential exposure under the Anti-kickback statute.

Why is this opinion important, other then for knowing you are able, under similar circumstances, to utilize free access to an interface without threat of noncompliance?  This opinion is important because of the rationale provided therein and set forth above.  The opinion evidences a clear distinction between "integrally related" services and those that are not, and provides for a fact based analysis showcasing the concept of "independent value".  With the guidance provided in this opinion, we are able to glean from OIG other potential scenarios that may or may not be likely to lead to potential exposure, and to modify or adjust best practices to ensure compliance. 


Looking for the KK Healthcare Exchange?  Click Here. 

MISSED OUR RECENT WEBINARS?  CLICK HERE ANYTIME!
Looking for HIPAA and compliance forms?  
Click here to visit our website.
Have a question or comment for Jennifer?
Contact Jennifer at Jennifer@Kirschenbaumesq.com or  at (516) 747-6700 x. 302.
Interested in having Jennifer speak at an event or
at a residency/fellowship program?
Contact Jennifer directly at (516) 747-6700 x. 302 or at Jennifer@Kirschenbaumesq.com
Click here to learn about
K&K's Prepaid Legal Audit/Investigation Defense Now!