OIG’s Message to Surgeons: “Hands Off Anesthesia Fees! “

Last month’s OIG’s advisory opinion strongly condemned surgeons for asking anesthesia providers for kickbacks. OIG Advisory Opinion No. 12-06 concluded that both of the increasingly popular fee-splitting models (management fees & company model) “could potentially generate prohibited remuneration under the anti-kickback statute and that the OIG could potentially impose administrative sanctions.”

Under the Fee-for-service model, an ASC bills the anesthesia provider a per-patient management fee for such “management services” as pre-op nursing assessments, office space and equipment storage. The OIG said this arrangement would implicate the anti-kickback statute because the fee that the anesthesia group would pay would be for some of the same services that the ASC facility fee is intended to cover. The ASC would essentially be paid twice for the same services, said the OIG.

Under the Company model, an ASC forms and owns a separate anesthesia shell company that bills for anesthesia services, hires the anesthetists at a negotiated rate either as independent contractors or as employees, bills for anesthesia services and then shares in the profits generated by the anesthesia service fees. The OIG ruled that the physician owners’ investment in the anesthesia company wouldn’t be protected by the ASC safe harbor, saying that the company model “is designed to permit the centers’ physician-owners to do indirectly what they cannot do directly: to receive compensation, in the form of a portion of the anesthesia services revenues, in return for their referrals to the anesthesia provider.”

Healthcare attorneys say the negative OIG advisory opinion gives anesthesia practices solid footing to refuse to pay a “franchise fee” to ASCs and surgical centers. As anesthesia providers celebrate not having to fork over part of their fees to surgeons any longer, surgery center owners used to drinking from 3 revenue streams ( facility fees, procedural fees and anesthesia services fees) will have to learn to get by on just 2.