Published by Becker’s Hospital Review
On July 20, 2015, the Officer of the Inspector General (OIG) issued Advisory Opinion No. 15-101, in which a health system and a related psychiatric hospital sought an advisory opinion related to a non-clinical personnel lease and management services arrangement.
The health system had proposed that the compensation be set at the cost to provide the services (salaries, benefits, and overhead) without any mark-up or administrative fee. The health system attested the payment would not vary with volume or value of referrals; however it was unable to set the fee in advance because operational and management needs may change over the term of the agreement. Ultimately, the OIG ruled that the arrangement was low risk based on three factors: 1) Medicare cost reporting rules for related parties; 2) the arrangement helped to gain cost efficiencies for the hospital; and 3) there was no evidence the arrangement would induce or increase referrals. While it could potentially generate prohibited remuneration under the Anti-Kickback Statute, the OIG said it would not impose administrative sanctions on the parties. That said, the OIG also concluded the proposed arrangement could generate prohibited remuneration since the rate may be below Fair Market Value (FMV).2