OIG approves physician recruitment scheme

The HHS Office of Inspector General (OIG) recently approved a hospital’s plan to recruit a medical resident after graduation by promising to pay off his student loan. But health care attorneys say the OIG’s advisory opinion does little more than confirm the legality of what is already a common practice.

"This confirms everybody’s intuitive sense regarding physician recruitment arrangements," says Dan Mulholland, a partner with Horty Springer in Pittsburgh.

"It’s a bit of a no-brainer," agrees Daniel Settlemyer, a health care attorney with Latham and Watkins in San Francisco. In practice, Settlemyer says most hospitals already have gone well beyond the arrangement outlined in the advisory opinion, which was issued May 10.

The opinion establishes four principles that would be reviewed by the Inspector General:

- Whether there is documented evidence of an objective need for the practitioner’s services.

- Whether the practitioner has an existing stream of referrals with the recruiting entity’s service area.

- Whether the benefit is narrowly tailored so that it does not exceed that which is reasonably necessary to recruit a practitioner.

- Whether the remuneration directly or indirectly benefits other referral sources.