Medicare Compliance & Reimbursement

Other Specialties Could Face Trickier Path The fact that radiologists don't typically order the tests they perform allowed an otherwise potentially risky business deal between a medical group and a hospital to win the HHS Office of Inspector General's blessing. In its latest advisory opinion (No. 03-12), the OIG says a hospital-radiology group joint venture to operate an open magnetic resonance imaging facility won't be subject to kickback enforcement, despite the fact that it doesn't meet the watchdog agency's small entity investment safe harbor requirements. The deal - under which a medical center and the six-person physician practice would own 51 percent and 49 percent, respectively, of the MRI facility - has a number of features that minimize the risk of fraud and abuse, the opinion says. First and foremost: "unlike most hospital-physician joint ventures, the physician investors ... are not referral sources for the Facility or the Medical Center." That's so because, in general, treating physicians, not radiologists themselves, order radiological tests. Other safeguards that helped win a green light from the OIG include: only a small percentage of the MRI facility's referrals would come from the hospital or its employee physicians; the hospital won't do anything to encourage its doctors to refer to the MRI facility; and return on investment in the MRI facility won't be based on referral volume.
To see the opinion, go to http://oig.hhs.gov/fraud/docs/advisoryopinions/2003/ao0312.pdf. Lesson Learned: Radiologists may be in a better position to undertake JVs with hospitals than other provider types.