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A Tennessee based ambulatory surgery center company has agreed to pay damages to a former employee who filed a suit alleging that physician investments in local surgery center entities violated the Anti-kickback Statute. The case highlights some of the unique kickback issues that are present in ambulatory surgery center structure. Specifically, the case demonstrates how investment terms that are intended to assure compliance with the safe harbor regulations under the Medicare Anti‑Kickback Statute (42 U.S.C. § 1320a-7b(a)-(b)) can create evidence of non-compliance if the initial terms of the offering relate, in whole or in part, to the volume or value of expected referrals from the investor in the ASC venture.
In order to comply with safe harbor requirements, ASCs must generally require investing physicians to use the facility as an extension of their medical practices. However, if the terms of the investment are based on the volume or value of referrals, those same requirements become evidence that referrals are being required in exchange for remuneration. In the Tennessee case, the ASC management company purchased controlling interests in local surgery center entities at a high multiple of earnings. Physicians who were referral sources were offered investments at less than 1/3 of the
Read more here: Health Law Blog
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