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OIG Issues Favorable Advisory Opinion on Free Technology from Hospital

Posted in Fraud and Abuse

Physicians in private practice are increasingly relying upon their local hospitals for assistance in making the transition to full-fledged electronic medical records. The Office of Inspector General (OIG) of the Department of Health and Human Services recently gave the nod to a proposed arrangement which would enhance electronic communication between private practices and a community hospital. Specifically, the OIG issued a favorable advisory opinion on December 12, 2012 (Advisory Opinion 12-20) regarding a hospital’s proposal to give physicians free access to an electronic interface which would permit the physicians to electronically transmit test orders and receive results from the hospital.

Because hospitals are in a position to benefit from physician referrals for diagnostic tests, giving free items or services to referring physicians to facilitate such referrals could run afoul of the federal anti-kickback statute. However, in arriving at the favorable opinion, the OIG cited its longstanding position that free items and services that are integrally related to a provider’s services and which cannot be used for purposes unrelated to the those services generally do not have independent value and therefore are unlikely to implicate the prohibitions of the anti-kickback statute. The OIG found that the proposed interface was integrally related to the diagnostic services offered by the hospital and as such did not have independent value to the referring physicians.