Physician Kickbacks the Focus of OIG “Eye on Oversight” Video

The U.S. Health and Human Services Office of Inspector General’s (OIG’s) concern about kickbacks to referral sources is nothing new. But the OIG is keeping the heat on the issue with a new video posted to its website this month. “In the federal health care programs, paying a physician for their referrals is illegal,” says Robert K. DeConti, Assistant Inspector General for Legal Affairs, in the video.

The OIG’s video “Kickbacks to Physicians” is the fourth in a series of Eye on Oversight videos released this year. The OIG’s Eye on Oversight web page indicates the monthly video series features “top areas of interest for the OIG” and emerging health care problems or trends. Previous videos focused on Opioids, Medicare Part D Fraud, and Child Care safety.

“Kickbacks in health care are a big problem. They can lead to higher costs for patients, unnecessary tests, and doctors making decisions based on making money versus caring for patients,” the video notes, while spotlighting a case against an imaging services provider that is analogous to the government’s enforcement efforts against New Jersey-based lab, Biodiagnostic Laboratory Services (BLS), and physicians who allegedly received payments for referring patients to the lab. DeConti explains in the video that the OIG settled kickback claims against a radiologist and imaging center owner for $650,000 and a six-year exclusion from Medicare for the radiologist and the imaging center. The OIG had alleged the radiologist entered into sham medical director agreements with physicians in exchange for referring patients to the center. The OIG also pursued the physicians receiving the payments, achieving a total settlement of $1.4 million in the case. Similarly, in the BLS case, the government has pursued the individual owners of the lab as well as dozens of physicians who allegedly received payments from the lab for referring lab tests.

“I think these cases are significant because for a long time the government has focused on the provider that pays the kickbacks, often times the corporate payer of the kickback, and these cases involve the individual physicians who received kickbacks,” says DeConti.

The video highlights the OIG’s one-page June 2015 alert regarding sham medical directorship arrangements titled, “Fraud Alert: Physician Compensation Arrangements May Result in Significant Liability.” As labs know, the OIG spotlighted the issue of payments to referral sources specifically in the laboratory context the prior year with a lengthier Special Fraud Alert titled Laboratory Payments to Referring Physicians.

The OIG Eye on Oversight series is updated monthly and is accessible on the OIG website along with all video releases at oig.hhs.gov/newsroom/video/