New Federal Anti-kickback Investigation

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POTENTIAL ANTI-KICKBACK VIOLATIONS in ancillary clinical service arrangements between referring physicians and providers like radiologists and laboratories continue to attract the interest of federal healthcare investigators. Right now, it appears radiology is a primary target.

Last week, the Wall Street Journal disclosed that federal health investigators issued warrants and subpoenas to University MRI & Diagnostic Imaging Centers of Boca Raton, Florida. The company, which operates three imaging centers, is owned by radiologist Fred Steinberg, M.D. This federal action comes in response to a whistleblower lawsuit against University MRI filed by a radiologist who once worked for the company.

At issue are allegations that University MRI entered into several different types of arrangements with referring physicians that violate federal anti-kickback statutes. In most scenarios, University MRI provided some type of discounted imaging service to the referring physician and allowed that physician to directly bill payers for the full amount. Federal investigators are looking for evidence that such arrangements represent kickbacks from the radiology provider to the referring physician.

It is widely-known that imaging is now the fastest-growing cost item for medical services in the Medicare program. The growth rate of imaging costs from 2003 to 2004 was 16%. Experts believe this is because so many physicians are bringing imaging services into their practice, then increasing utilization of such services.

Pathologists and lab directors should consider these developments in two ways. First, this investigation is targeting anti-kickback violations. Taken in context with the federal indictments of ex-UroCor executives under anti-kickback laws last year, it is reasonable to assume that the Office of the Inspector General (OIG) and federal attorneys are evolving and expanding their understanding and experience with this law. As that happens, more investigations and prosecutions of anti-kickback violations may occur in the coming years.

Second, to constrain utilization of imaging services, Medicare and private payers are likely to implement a variety of restrictions and requirements. There is a high probability that many of these types of constraints on utilization will be similarly applied to anatomic pathology services.

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