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OIG Warns of Pre-Authorization Violations

Cheryl Clark, for HealthLeaders Media, September 2, 2010

A hospital that offers free insurance pre-authorization services to doctors and patients who need imaging tests "could potentially" be doing so in violation of federal anti-kickback statutes, says an advisory opinion issued Tuesday by the U.S. Office of Inspector General's Fraud Prevention and Detection Office.

"When a party in a position to benefit from referrals provides free administrative services to an existing or potential referral source, there is a risk that at least one purpose of providing the services is to influence referrals," wrote Lewis Morris, chief counsel to the Inspector General.

However, the agency gave four reasons why it believes such an arrangement "presents a low level of such risk, and we will not impose administrative sanctions arising under the anti-kickback statute."

The OIG opinion was issued at the request of one hospital seeking to add such a service for its imaging program, because it said "many commercial insurers have begun requiring that providers obtain pre-authorization in order for the insurer to cover diagnostic imaging services."

The specific name of the hospital making the OIG request was redacted from the agency's document.

Federal officials gave four reasons why they would not impose sanctions on such an offering:

1. The risk of fraud and abuse in such situations is low because the arrangement would not target any particular referring physicians. "In the majority of cases—given the multitude of insurance plans and plan requirements—Requestor (the hospital seeking the opinion) is unlikely to know a physician's obligations with respect to an order for a particular patient." If the service relieves the physician of some work, "such relief would occur by chance, not by design."

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