DME Referral Practices May Violate Anti-Kickback Statutes
In 2009, CWCI Claims and Medical Care Committee members reported that the increased use of tests associated with sleep disorders and sexual dysfunction were affecting both medical payments and lien filings, and that medical evaluators were regularly including sleep and sexual dysfunction symptoms in medical reports as a way to augment an assessment of permanent disability. In October of that year, a CWCI analysis (see file below) found that while the relative volume of sleep and sexual dysfunction testing was modest when compared to all medical services delivered in the same time period, between 2003 and 2008, the total number of sleep and sexual dysfunction tests in California workers’ compensation, and the total reimbursements for those tests, had increased by more than 550 percent.
Among the factors that may spur such rapid growth are referral contracts such as those between physicians, durable medical equipment (DME) suppliers and the "Independent Diagnostic Testing Facilities" (IDTFs) that use their equipment to test for these types of disorders. Notably, the U.S. Office of the Inspector General (OIG) today posted on its website an advisory opinion that concludes that such arrangements do potentially violate the federal anti-kickback statute and could result in administrative sanctions, though a definitive conclusion regarding the existence of an anti-kickback violation requires a determination of the parties’ intent. A copy of the OIG opinion is attached for your review.