The OIG recently published an advisory opinion relating to a proposal for several diagnostic imaging service providers (a clinic and a medical center) to provide free pre-authorization services to physicians and patients. Many insurers require pre-authorization for imaging services. This is a measure intended to prevent over utilization. In the proposed arrangement, the imaging providers would operate a call center that patients and physicians could contact to obtain pre-authorization services. The center would in turn submit necessary information to the insurers.
Before ultimately approving the arrangement, the OIG acknowledged that free pre-authorization services could implicate the federal anti-kickback statute if the intent to induce referrals was present. The OIG noted that free pre-authorization services could constitute prohibited “remuneration” if the physician’s contract with the insurance company required the referring physician to obtain the pre-authorizations. The imaging provider’s provision of the free pre-authorization services would relieve the physician of the burden and expense of obtaining pre-authorizations directly. Additionally, the OIG noted that free pre-authorization services could constitute prohibited “remuneration” even if the insurance contract placed the burden on the imaging provider or did not allocate the responsibility at all. The OIG provided an example in which the physician’s staff is devoting considerable time to obtaining the pre-authorizations and might realize significant savings. Nevertheless, the OIG determined that it would not impose sanctions for the arrangement at issue based on the following factors:
1. Low risk of fraud and Abuse. The arrangement would not target particular referring physicians, but would be available to all patients and physicians regardless of the volume or value of referrals.
2. Additional Safeguards to Reduce Risk of Fraud and Abuse. The imaging providers would not make any payments to the physicians or otherwise have any ancillary agreements with the physicians. Further, the imaging providers would not make assurances to the physicians that the pre-authorization requests would be approved. The imaging providers would only collect and provide documentation of medical necessity as received from the patients or physicians. The arrangement would also comply with all state and federal privacy laws.
3. Transparency. The call center’s staff would identify themselves as representatives of the imaging providers and would disclose the nature of the pre-authorization program. The call center would also provide the referring physicians with a copy of information provided to insurers.
4. Legitimate Business Purpose. The imaging providers have a legitimate business purpose that is wholly distinct from gaining favor with referral sources—that is, it is the imaging providers who have a financial interest at stake and desire to ensure that pre-authorizations are pursued.
The OIG’s advisory opinion only protects the actual requestors of the opinion and cannot be relied on by other entities. That said, it provides helpful guidance because it suggests factors to consider when constructing similar arrangement to reduce anti-kickback risk. You may review the OIG’s Advisory Opinion 10-04 here.