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The 'SAB': Back to the Future

BY John F. Wester
September 11, 2003

The Special Advisory Bulletin on Contractual Joint Ventures (SAB) is the OIG's latest reiteration in a series of missives that invoke the Federal anti-kickback statute, 42 U.S.C. ' 1320a-7b(b) (AKS). It's all part of an attempt to chill the proliferation of business arrangements between companies that are in the business of supplying medical equipment, pharmacy items, and/or services to patients (generically, 'suppliers') and providers such as hospitals and physicians (generically, 'providers') who are in a position to refer or 'steer' patients to a supplier. On April 23, 2003, the Office of Inspector General (OIG) for the Department of Health and Human Services (DHHS) issued the SAB, which describes various arrangements as 'potentially problematic.' See http://oig.hhs.gov/fraud/docs/alertsandbulletins/042303SABJointVentures. While many suppliers and providers may choose to alter or terminate their arrangements as a pragmatic reaction to the SAB, the conceptual underpinnings of the SAB are suspect themselves.

Background

In 1989, the OIG issued a special fraud alert challenging arrangements between durable medical equipment (DME) suppliers and physicians who refer patients for DME. Apparently concerned that the fraud alert had not had the desired effect, the OIG reprinted the fraud alert, along with several others, in 1994. See 59 FR 65372 (Dec. 19, 1994). Nine years later, the SAB expounds upon the same types of arrangements as the fraud alert, but expands the factual scenarios in which they arise as well as the discussion of the purported evils of such arrangements.

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