On April 29, 2021, the Office of Inspector General (the “OIG”) posted Advisory Opinion No. 21-02, which addressed a request from a health system and management company (the “Requestors”) for review of a proposed investment, along with certain physician surgeon owners, in an ambulatory surgery center (the “Proposed Arrangement”). While the OIG ultimately indicated that it would not impose administrative sanctions on the Requestors under the applicable sections of the Federal anti-kickback statute, its determination hinged on certain key facts and stipulations made by the Requestors. This article summarizes Advisory Opinion 21-02 and highlights certain key safeguards of the Proposed Arrangement that were noted by the OIG.
SAFEGUARDS NOTED IN ADVISORY OPINION 21-02
In the Analysis section of Advisory Opinion 21-02, the OIG concludes that each of the investors may be (manager), or would be (physician investors and health system) in a position to (directly or indirectly) influence referrals of items or services reimbursable by a Federal health care program to the new ASC. The OIG ultimately indicated that it would not impose administrative sanctions on the Requestors under the applicable sections of the Federal anti-kickback statute. This determination hinged on certain key facts and stipulations made by the Requestors.
We have summarized certain of the reference “safeguards” from the opinion in the left hand column of the table, below. One way to gain additional perspective on the commentary provided by the OIG, in addition to identifying the key safeguards, is to consider the opposite of the fact patterns cited in the safeguard – as shown in the right hand column of the table below. We present the information in the right hand column of the table noting that the OIG generally warns that Advisory Opinions are specific to the facts presented and cannot be assumed to indicate position or action on a different set of facts.
As the ambulatory surgery center industry is not a frequent subject addressed by the OIG, Advisory Opinion 21-02 is worth particular attention. This Advisory Opinion highlights the litany of related transactions or activities surrounding a joint venture investment in an ASC that might impact overall physician investment outcomes, and therefore, have regulatory implications. Though the Requestors have prudently and proactively addressed these surrounding transactions with safeguards that mitigate potential regulatory risk that might arise in the Proposed Arrangement, industry participants should consider with care whether any of their own surrounding transactions (individually or collectively) serve to undermine the spirit of the regulatory framework under which physician investments in ASC’s are permitted.