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OIG Approves Hospital’s Electronic Interface Arrangement

Written By Theresa Carnegie and Kimberly Gold

In OIG Advisory Opinion 12-20, the OIG determined that a proposed arrangement (the “Proposed Arrangement”) by a hospital (the “Requestor”) would not constitute grounds for the imposition of sanctions under the Anti-Kickback Statute (“AKS”).

Under the Proposed Arrangement, the Requestor would provide free access to an electronic interface (the “Interface”) to all community physicians and physician practices (the “Physicians”) that request it.  The Interface would allow the Physicians to transmit orders for certain laboratory and diagnostic services to be performed by the Requestor and to receive the results of those services.  The Interface would only be used to transmit these orders and results.

While the Requestor would provide contracted support services necessary to maintain the Interface, the Physicians would be responsible for all aspects of their own electronic health records systems that would permit them to communicate with the Requestor through the Interface.

In its analysis, the OIG reiterated its “longstanding and clear” position that the provision of free or below-market goods or services to actual or potential referral sources are suspect and may violate the AKS depending on the circumstances.

However, the OIG determined that the free access to the Interface and the related support services that the Requestor would provide under the Proposed Arrangement would not constitute remuneration to the Physicians under the AKS.  The OIG based this determination on its finding that the free Interface access would be integrally related to the Requestor’s services, and would therefore have no independent value to the Physicians apart from the services the Requestor provides.

The OIG took the opportunity to note that the Interface access offered under the Proposed Arrangement is a contemporary analog to the limited-use computer offered to a physician by a laboratory for purposes of transmitting test results as described in the preamble to the 1991 Safe Harbor Regulations. The OIG notes that the analysis in this Advisory Opinion reflects application of the same underlying principles to the current state of available technology.

This is the second time this month that the OIG has issued an Advisory Opinion addressing the offer of free or below market items to referral sources.  In Advisory Opinion 12-19, the OIG approved three of four arrangements involving a pharmacy’s provision of access to administrative forms and software programs to community homes where the pharmacy’s patients reside.  Click here to read our earlier blog posting summarizing this Advisory Opinion.

While each Advisory Opinion is limited to the particular proposed arrangement, they provide useful insight and guidance in analyzing whether the OIG would view an offer of free or below market items or services to actual or potential referral as violating the AKS.


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M. Daria Niewenhous

Member Emerita

Theresa advises clients on all aspects of the pharmaceutical supply chain, including counseling industry stakeholders on a range of business, legal, transactional, and compliance matters. She provides clients with strategic counseling and creative business modeling that considers legal restrictions and regulatory risk in light of innovation and business goals.