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Does Crime Pay? 3 Implications for Physician-Hospital Arrangements from the OIG Semiannual Report

If you’re like me and track email updates from the Office of Inspector General – better known as the OIG – then you probably know about the weekly financial settlements many health care organizations face. But now that the new year is upon us, what can we expect from the OIG in 2019 – specifically, as it relates to physician-hospital arrangements? From my perspective, the OIG’s 2019 work plan is consistent with what we have seen the past few years. In September, the OIG released their latest semiannual report to Congress, summarizing the prior six months. If you’re not familiar with this report, the OIG partners with the Department of Justice (DOJ), State Medicaid Fraud Control Units and other Federal, State and local law enforcement agencies to fight fraud in Health and Human Service (HHS) programs. It can be tough to sort through, but it’s helpful to understand some of the report’s implications, especially if you’re part of a hospital or health system.

Personally, I was taken back by the number of financial recoveries in 2018 that also had a criminal settlement. In fiscal year 2018, the OIG reported recoveries of $2.91 B, criminal actions against 764 individuals and entities, and civil actions against 813 individuals and entities. But it’s not all bad news in the world of the OIG. In fact, if you’re willing to put in the time, their semiannual report is full of useful information that, collectively, can act as your proverbial north star in the regulatory landscape.

I’ve outlined three implications from the recent OIG report that specifically relate to physician-hospital arrangements.

1. Who is being held accountable these days? The answer: It could be you or your team.

There is a subtle shift since 2015 from organizational accountability to individuals. In fact, the number of recoveries against individuals and entities are on the rise. Specific aspects related to the Yates memo (which altered the game in how individuals are treated in fraud cases) and how a hospital protects individuals have all changed. It may be impossible for the hospital to stand behind an executive who participated in fraud in the settlement.

2. Where do settlements come from? Your own physicians or employees.

Fighting fraud, ensuring integrity of the government programs of Medicare and Medicaid, and protecting the health and safety of the population is top priority. Greater than 70 percent of the recoveries mentioned come from whistleblower cases, so your own employees and physicians are likely the ones that would surface a compliance issue. As a result, internal compliance programs are a priority to identify issues.

3. Should we expect Anti-Kickback Statute and Stark Law changes? Sort of.

The OIG issued an RFP on August 27, 2018, to obtain opinions on how to address any regulatory provisions that may act as barriers to coordinated care or value-based care related to payments between hospitals and providers under current laws. While some changes are expected to be specific to value-based payment plans, the number of organizations participating in these plans has dropped off significantly since 2016. In a nutshell though, it’s still not going to be legal to buy physician business, pay physicians over Fair Market Value or entice behavior that increases the costs of government programs.

The OIG report should never be missed. It’s chocked full of great information that every hospital executive should understand and take seriously. After all, who wants to appear in one of those scandalous email alerts from the OIG, anyway.


1.    US Department of Health and Human Services, OIG, Semiannual Report to Congress April 1, 2018-September 30, 2018.

2.    OIG, Active work plan items,

3.    Yates memo, September 9, 2015 and can be downloaded at

Want to learn more about this topic? Watch how one of our clients tackled physician contract compliance with our DocTime automation.

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