OIG Continues to Permit Free Pre-Authorization Services
On September 28, the Office of Inspector General (OIG) posted Advisory Opinion 10-20 in which it analyzed another pre-authorization arrangement. This is the OIG’s third Advisory Opinion issued this year that favorably reviews the provision of free pre-authorization services to referral sources (please visit our September 9 and May 14 blogs both of which address favorable pre-authorization arrangements).
Under the Proposed Arrangement, Requestor is a physician-owned provider of professional radiology services. When a patient comes to Requestor’s facility, Requestor proposes to contact the insurer to provide any necessary information to obtain preauthorization. According to the Proposed Arrangement, free preauthorization services would be made available on an equal basis to all patients and referring physicians without regard to any physician’s volume or value of expected of past referrals. Further, in cases when the Requestor’s contract with an insurer precludes it from performing the pre-authorization services, Requestor would not do so. Under the Proposed Arrangement, the Requestor would ensure transparency by providing each physician with a copy of the information submitted to obtain the pre-authorization services, and it would make such information available to the Secretary of health and Human Services upon request. Because Requestor, ultimately, bears the risk of not getting paid by the insurance company, it offers this service to ensure that it obtains reimbursement for the services that it furnishes.
The OIG analyzed the Proposed Arrangement under the Anti-Kickback Statute (AKS) and, reiterated many concerns it expressed in its prior preauthorization opinions. However, similar to its previous opinions addressing pre-authorization issues, the OIG again concluded that even though the Proposed Arrangement could potentially generate prohibited remuneration under the AKS, it would not impose administrative sanctions as there was a low level of risk under the AKS for the following reasons:
1. The Proposed Arrangement would not target any referring physicians;
2. There are no implicit or explicit arrangements with the referring physicians to reward them for their referrals;
3. Requestor would be transparent with the insurance company–identifying itself while obtaining pre-authorization–and would provide physicians with a copy of the information submitted to the insurance companies; and
4. Requestor has a legitimate business interest in offering pre-authorization services because its payments are at stake if pre-authorization is not obtained for the services.
Advisory Opinion 10-20, the third pre-authorization opinion in four months, continues to reinforce the OIG’s prevailing view that free pre-authorization services, when carefully implemented and without regard for the value or volume of referrals, pose low, limited risks under the AKS. This opinion, in particular, has particular significance insofar as the OIG analyzed a structure consistent with the common paradigm of pre-authorization arrangements among imaging providers.
For more information, please contact Adrienne Dresevic, Esq. or Carey F. Kalmowitz, Esq. at (248) 996-8510 or (212) 734-0128 or Daniel B. Brown, Esq. at (770) 804-6475, or visit the Stark and Anti-Kickback and the Diagnostic Imaging Arrangements specialty pages on the HLP website.