Tuesday, the OIG released a fraud alert advising physicians to ensure their compensation arrangements, such as medical director agreements, reflect fair market value for bona fideservices the physicians actually provide, or they could potentially face liability under the Anti-Kickback Statute.  As part of the fraud alert, the OIG encouraged physicians “to carefully consider the terms and conditions of medical directorships and other compensation arrangements before entering into them.”

To underscore the seriousness of the issue, the OIG highlighted the fact that it has recently reached settlements with 12 individual physicians regarding questionable medical directorship and office staff arrangements.  Compliance issues under these agreements included compensation the reflected the volume or value of referrals, compensation that was not fair market value for services performed, and payment for services that were not actually performed.  In one case, the OIG noted that the arrangement called for the affiliated health care entity to pay the salaries of the physicians’ front office staff, providing physicians an improper benefit by relieving them of that burden.

This latest fraud alert comes on the heels of similar alerts released in 2013 and 2014, putting physicians on notice that they too can be the focus of enforcement activity.  This appears to represent a shift by the OIG, which previously concentrated its enforcement efforts on larger entities, like hospitals and health care systems, rather than individual physicians.

In light of the OIG’s warning, physicians should be careful to ensure their medical director agreements and similar arrangements contain fair market value compensation for services they actually provide, and the services provided under the agreement should not overlap with obligations under other agreements.  Documenting time spent performing tasks under the agreement (such as through timesheets) is also a good way to build evidentiary support in case the agreement is challenged. Agreements that seem “too good to be true” should be viewed with suspicion.