OIG Special Fraud Alert Regarding Laboratories Payments to Referring Physicians

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The OIG scrutinizes referring physician and laboratory arrangements. Two scenarios that involve transfer of value from laboratories to physicians are highlighted. These scenarios could represent possible fraud and abuse under the anti-kickback statute.   Specifically, this addresses blood specimen collection, processing, and packaging and submission of patient data to a registry or database.

The anti-kickback statute offers protection for patients from potentially undergoing unnecessary medical testing as a result of financial incentives being offered to the referring healthcare providers. This situation leads to increase in costs to Federal Healthcare programs and their beneficiaries as well as unfair competition. According to an earlier OIG fraud alert, “whenever a laboratory offers or gives to a source of referrals anything of value not paid for at fair market value, the interference may be made that the thing of value is offered to induce the referral of business”. Any remuneration cannot be paid purposefully with the intention of gaining or rewarding referrals for services reimbursed by the Federal Healthcare Programs. Violation depends on the intent of the parties, regardless of whether the payment is fair market value for services rendered. If the payment exceeds the fair market value or represents a double payment by a third party, the intent certainly would be more suspect.

Violation of anti-kickback statute is a felony with fines up to $25,000 and possibly up to 5 years of imprisonment for both parties involved as well as exclusion from participation in Federal Healthcare programs. In addition to violation of the anti-kickback statute, some of these situations may also represent false claims under False Claims Act if the tests are not reasonable and appropriate and the Medicare coverage criteria are not met.

The following describes what is allowable for Blood Specimen Collection, Processing and Packaging:

Blood Specimen Collection

  • Medicare allows nominal specimen collection fee in certain circumstances including venipuncture (only one fee allowed for each type of specimen, regardless of number of specimens drawn)

-Accepted and prevailing practice in the local area to make separate charges for collection

-Customary practice of the physician to make separate charges for collection

**CPT Code 36415 “Routine venipuncture-Collection of venous blood by venipuncture”

Blood Specimen Processing and Packaging

  • Medicare reimburses for processing and packaging specimens for transport through bundled payment

**CPT 99000 “Handling and/or Conveyance of Specimen for transfer from the office to a laboratory.

INCLUDES: Centrifuging a specimen, separating serum,labeling tubes, packing for transport, filling out lab forms and supplying insurance information and other documentation 

The following is the OIG List of Suspicious Specimen Processing Arrangements:

  • Payment exceeds fair market value for services actually rendered by the party receiving the payment.
  • Payment is for services for which payment is also made by a third party, such as Medicare.
  • Payment is made directly to the ordering physician rather than to the ordering physician’s group practice, which may bear the cost of collecting and processing the specimen.
  • Payment is made on a per-specimen basis for more than one specimen collected during a single patient encounter or on a per-test, per-patient, or other basis that takes into account the volume or value of referrals.
  • Payment is offered on the condition that the physician order either a specified volume or type of tests or test panel, especially if the panel includes duplicative tests (e.g., two or more tests performed using different methodologies that are intended to provide the same clinical information), or tests that otherwise are not reasonable and necessary or reimbursable.
  • Payment is made to the physician or the physician’s group practice, although the the processing of the specimen is actually being performed by a laboratory/third party phlebotomist placed in the physician’s office.


Registry Arrangement payments are made to physicians for submitting patient data , answering patient questions and reviewing registry reports. These arrangements could promote overutilization with medically unnecessary testing or even unnecessary duplicative testing for data comparison purposes. The financial incentive also represents unfair competition and potentially higher quality laboratories may be underutilized. Compensation for clinical research is not prohibited by the anti-kickback statute unless the Registry Arrangement is for the sole purpose of inducing or rewarding referrals.

The following is the OIG List of Suspicious Registry Arrangements

  • The laboratory requires, encourages, or recommends that physicians who enter into Registry Arrangements perform the tests with a stated frequency (e.g., four times per year) to be eligible to receive, or to not receive a reduction in, compensation.
  • The laboratory collects comparative data for the Registry from, and bills for, multiple tests that may be duplicative (e.g., two or more tests performed using different methodologies that are intended to provide the same clinical information) or that otherwise are not reasonable and necessary.
  • Compensation paid to physicians pursuant to Registry Arrangements is on a per-patient or other basis that takes into account the value or volume of referrals. · Compensation paid to physicians pursuant to Registry Arrangements is not fair market value for the physicians’ efforts in collecting and reporting patient data.
  • Compensation paid to physicians pursuant to Registry Arrangements is not supported by documentation, submitted by the physicians in a timely manner, memorializing the physicians’ efforts.
  • The laboratory offers Registry Arrangements only for tests (or disease states associated with tests) for which it has obtained patents or that it exclusively performs.
  • When a test is performed by multiple laboratories, the laboratory collects data only from the tests it performs.
  • The tests associated with the Registry Arrangement are presented on the offering laboratory’s requisition in a manner that makes it more difficult for the ordering physician to make an independent medical necessity decision with regard to each test for which the laboratory will bill (e.g., disease-related panels).


Please review these possible pitfalls in your laboratory arrangements and identify any that could be construed by the OIG as violations of the anti-kickback statute. The potential for criminal penalties is severe and could include imprisonment of either or both parties involved.

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