On October 13, 2023, the U.S. Department of Health & Human Services Office of the Inspector General (OIG) issued a favorable opinion (Advisory Opinion 23-07) addressing the question of whether an employed physician can be paid bonus compensation relating to procedures performed by the physician without violating the federal Anti-Kickback Statute (AKS). Under the facts presented, when the physician employees perform outpatient surgical procedures in a given calendar quarter at either of two ambulatory surgery centers (ASCs) operated by the practice employer (requestor), the physician employee would receive a bonus of 30% of the requestor's net profits of the ASC facility fee collection attributable to that physician's procedures performed at the ASC for the quarter. As a fundamental matter, the OIG pointed out that when the relevant ASC procedures are referred by the physician employee and are reimbursable by a federal health care program, the AKS would be implicated.
Under the facts presented, the requestor certified that the physicians were bona fide employees (i.e., not independent contractors) and that there were no Stark Law designated health services. Also, the requestor operated the ASCs and corporate division of requestor, that is, divisions within the same legal entity as requestor and NOT as subsidiaries of requestor.
The OIG arrived at its favorable opinion by relying on the statutory exception and regulatory safe harbor for "employees" under the AKS. The statutory exception protects "any amount paid by an employer to an employee (who has a bona fide employment relationship with such employer) for employment in the provision of covered items or services." The safe harbor regulations provide that the term "remuneration," as used in the AKS, does not include "any amount paid by an employer to an employee, who has a bona fide employment relationship with the employer, for employment in the furnishing of any item or service for which payment may be made in whole or in part under Medicare, Medicaid or other Federal health care programs." The OIG determined that the proposed bonuses would be paid for "covered items or services" under the statute or "items or services for which payment may be made in whole or in part under Medicare, Medicaid or other Federal health care programs." Thus, the bonus was paid for bona fide services NOT referrals, which are not considered "covered items or services" under the AKS.
The OIG notes: "[t]hat a similar arrangement involving bonus payments to independent contractor physicians or other nonemployees or under a different corporate structure (in which, for example, the physicians were owners of the ASCs and paid themselves the bonuses contemplated by the Proposed Arrangement as ownership distributions) may raise fraud and abuse concerns under the Federal anti-kickback statute. Payment structures that tie compensation to profits generated from services furnished to patients referred by the compensated party are suspect under the Federal anti-kickback statute."
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