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Tip: Ensure joint venture meet OIG guidance

Compliance Monitor, April 10, 2007

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The OIG is concerned that some joint-venture agreements between those providing items or services reimbursable by federal healthcare programs and referral sources are disguised payments for referrals.

In its compliance guidance, the OIG suggests that hospitals consider the manner in which they select and retain participants, how they structure the joint venture, and how they finance investments and distributes profits. The organization offers the following guidance for scrutinizing joint ventures: 

• Structure joint ventures in an anti-kickback statute safe harbor
•  To evaluate contractual joint ventures, consider whether

- the hospital is expanding into a new line of business created predominantly to serve the hospital's existing base

- a would-be competitor of the new line of business is providing all or most of the key services

- the hospital assumes little or no bona fide business risk

•  To reduce the risk of abuse, hospitals should consider

- barring physicians employed by the hospital or its affiliates from making referrals to the joint venture

- taking steps to ensure that medical staff are not encouraged to refer to the joint venture

- annually notifying physicians in writing of the preceding policy

- refraining from tracking the volume of referrals attributable to particular referral sources

- ensuring that no physician compensation is tied to the volume or value of referrals to the joint venture

- disclosing all financial interests to patients

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