By: Christopher A. Parrella, Esq., CPC, CPCO, CHC

Parrella Health Law, Boston, Ma.

The OIG Advisory Opinion No. 23-12, issued on December 28, 2023, and posted on January 3, 2024, examines a specific arrangement proposed by a requestor involving a one-time, voluntary redemption offer. This offer is extended to physician partners reaching age 67, allowing for the repurchase of their partnership units over a 2-year period, contingent upon their agreement to retire from medical practice. The Office of Inspector General (OIG) evaluates whether this arrangement might constitute grounds for sanctions under the exclusion authority of the Social Security Act or the civil monetary penalty provision, particularly in relation to the Federal anti-kickback statute.

The arrangement involves a limited liability partnership operating hospitals, with two classes of partners, including individual physicians. The partnership agreement allows the redemption of Units upon a Physician Partner’s voluntary retirement. The OIG’s analysis focuses on whether the arrangement, which offers remuneration in the form of a redemption offer, could potentially induce referrals or other business to the hospitals. The opinion concludes that while the arrangement could generate prohibited remuneration under the Federal anti-kickback statute if the requisite intent were present, the OIG will not impose administrative sanctions in connection with the arrangement due to the low risk of fraud and abuse presented. The opinion is limited to the arrangement and cannot be generalized to other situations or relied upon by other parties.

If you have any questions or need further clarification on the implications of the OIG Advisory Opinion 23-12, please don’t hesitate to reach out to us at Parrella Health Law. Our team is ready to assist you with expert legal advice tailored to your specific needs. Contact us either by calling our office at 857-328-0382 or sending an email to info@parrellahealthlaw.com, and we will be more than happy to address your inquiries.

Christopher Parrella, ESQ, CPC, CHC, CPCO, is the founding partner of Parrella Health Law in Boston, Mass. The firm focuses exclusively on healthcare defense and compliance matters. Chris also travels the country on behalf of a wide range of healthcare organizations, lecturing on a variety of health care enforcement and compliance topics. Chris is one of a handful of health care attorney’s that are also Certified Professional Coders (CPC) and is a member of the AAPC’s National Legal Advisory Board and Ethics Committee.  He is also a Certified Professional Compliance Officer (CPCO) and Certified in Health Care Compliance (CHC.)