OIG approves physician plan to invest in HMO
OIG approves physician plan to invest in HMO
Physicians with spare cash and an itch to invest should pay attention to this one. The latest OIG advisory opinion gives a thumbs-up to doctors who want to invest in a managed care organization.
In the opinion (No. 98-19), a company with an HMO and a preferred provider subsidiary will sell an interest — only described as less than 15% — to an independent physician association (IPA) with 2,200 shareholder-physicians. In return, the IPA will become the exclusive physician provider panel for the company’s managed care business, and it will sign physician service agreements with its doctors to service the HMO. In addition, the IPA will sign 10-year contracts to handle management and administrative services for the HMO.
OIG concluded the deal poses a minimal risk of kickbacks. First, much of the HMO’s business is with group insurance, so doctors can’t influence referrals. Second, profits from the venture will flow through the IPA, not the physicians. Most importantly, distribution will be based on ownership in the IPA and not the value of referrals.
While this kind of joint venture might hold promise for some IPAs, experts caution that the advisory opinion only examines the venture in light of the anti-kickback statute. It doesn’t address whether there are potential problems with the Stark self-referral laws.
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