At a time when concerns over referrals, bribes and kickbacks in the healthcare industry are prevalent (see DM 6619, 5625, 6719), the Office of the Inspector General (OIG) has released an advisory opinion regarding a proposed joint venture between a cancer treatment facility and urology groups, expressing concern over violations of the federal anti-kickback statute.

The OIG's summary of concerns over the arrangement could provide an indication to other facilities over what business ventures should be avoided. The cancer treatment facility (whose identity is redacted in the opinion), which is owned and operated by a physician group practice, planned to lease out space, equipment, and personnel to local urologist group practices in order to provide intensity-modulated radiation therapy (IMRT) for prostate cancer patients.

The urologist groups would in turn contract with the facility to provide the IMRT services as independent contractor, including the professional services. The physician practice that owns the treatment center informed OIG that the leases would be at fair market value and for terms longer than one year, but renewable. Currently, the practice bills the technical and professional components of IMRT services it provides to Medicare beneficiaries, using its own billing number. Under the proposed arrangement, the professional and technical components of the IMRT would be billed to Medicare using billing numbers assigned to the Urologist Groups.
The OIG reiterated its longstanding concerns about problematic joint venture arrangements "between those in a position to refer business, such as physicians, and those who furnish items or services for which Medicare or Medicaid pays, especially when all or most of the business of the joint venture is derived from one of the joint venturers."

The OIG's concerns included that the proposed arrangements would allow urologist groups to expand into a "related line of business" by allowing them to rent space, equipment, and personnel from the cancer treatment facility to provide radiation therapy to prostate cancer patients.

In addition, the OIG says proposed joint ventures between a cancer treatment facility and urology groups could mask an effort to pay improper remuneration to urology groups that already refer patients to the facility, and could result in federal penalties for the provider groups that are parties to the arrangements.

For more information, see the OIG's advisory opinion.

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