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Company Model Scrutiny Again

 A 2018 Department of Justice civil settlement involving a Florida interventional pain physician was the most recent law enforcement driven examination into the kickback implications of surgeons co-owning anesthesia services providers together with anesthesiologists.  These “company model” arrangements were suspect out the outset because anesthesiologists originally owned anesthesia services companies 100%.  “Why then, did surgeons jump into ownership with the anesthesiologists,” it was questioned.  Presumably because the surgeons wanted to be paid for generating the anesthesia income.  While the most recent 2018 in the Daitch DOJ settlement involved 100% surgeon ownership, the DOF still alleged that surgeon ownership interest in the anesthesia company amounted to kickback.  The issue is front and center once again.     

Recent Company Model Case Settlement

An anesthesia services provider (Care Plus Management) agreed to pay over $7M to settle kickback allegations involving the following alleged facts:

  1. Physician ASC owners received ownership in anesthesia services companies in exchange for their ASCs granting exclusive anesthesia services agreements to the anesthesia companies (in which the surgeons became owners); and
  2. A whistleblower alleged that anesthesia company profits were split with referring GIs, vascular surgeons and podiatrists (also owners of the ASCs).   

The Care Plus Management case follows one back in November 2021 when three anesthesiologists and serval ASCs paid more than 28M facing similar allegations.  

Company Model Case Conclusion

These cases are curious because the view of regulators is clear and predictable.  If there is a benefit flowing from A to B, and patients or business flowing from B to A, all the kickback bells and whistles should go off.  Even more, the pathway for a legitimate business relationship that should withstand scrutiny is well established and well-lit in the Anti-Kickback Statute Small Entity Investment Interest Safe Harbor, which generally requires for instance—

  1. A demonstrable need for the service and legal relationship;
  2. Ownership and profit distribution related solely to investment; and
  3. Proper documentation and compliant behavior.