CQW Panacea-re-brand-rev3


For the Week of July 21, 2014


How can a lab determine what CMS calls the “fair-market value” of a physician’s service?


Here is how the Department of Health & Human Services Office of Inspector General (OIG) explains this in a recently issued fraud alert.

Labs pay physicians, either directly or indirectly (such as through an arrangement with a marketing or other agent), to collect, process, and package patients’ blood specimens—often associated with expensive or specialized tests. Typically, these arrangements involve payments for certain duties and are made on a per-specimen or per-patient-encounter basis.

When determining the fair-market value of a physician’s services, a lab should determine whether the services for which it intends to compensate the physician are appropriate. Any payment by the lab to the physician may constitute double payment for the services and, consequently, be considered unlawful intent.

In its alert, the OIG provided many examples of unlawful intent including the two below.

  • Payment is made directly to the ordering physician rather than to the ordering physician’s group practice, which may bear the cost of collecting and processing the specimen.
  • Payment is offered on the condition that the physician will order either a specified volume or type of tests or test panel, especially if the panel includes duplicative tests (e.g., two or more tests performed using different methodologies that are intended to provide the same clinical information), or tests that otherwise are not reasonable and necessary or reimbursable.

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