Joseph Rugg's Health Law Blog

In October 2013, the Florida Society of Anesthesiologists filed a qui tam action under seal as required, which named as defendants a large number of Florida GI physicians, surgery centers, and “company model” anesthesia providers.  The action was unsealed and made public during the last week of March.

Chief among the FSA’s allegations is that the defendants violated the federal False Claims Act by billing and collecting for anesthesia services performed by captive “company model” anesthesia providers.

At its simplest, the term “company model” refers to an anesthesia company jointly owned by referring physicians and anesthesiologists that is formed to provide anesthesia services at the ambulatory surgery center that the referring physicians own.  The jointly owned anesthesia company takes the place of anesthesiologists (or an entity owned 100% by them) which previously performed the anesthesia services for the ASC. By using the company model arrangement, the referring physicians are then able to share in the revenues generated by the anesthesia services that previously would go solely to the anesthesiologists who performed the services.

The OIG made it clear in its Advisory Opinion 12-06 posted on June 1, 2012 that the company model and similar arrangements “could potentially generate prohibited remuneration under the anti-kickback statute and that the OIG could potentially impose administrative sanctions.”  The American and Florida Societies of Anesthesiologists had been urging the OIG to take action like this for a long time, and it is not surprising that the FSA would take the lead in filing a qui tam action on company model arrangements that continued after the OIG posted its opinion.

This is a very significant case.  The U.S. Attorney’s Office has presently declined to intervene, but its investigation is ongoing.