Payment of Physician’s EHR Transmission Fees May Violate AKS

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adrienneClintonJerry-Aben2By Adrienne Dresevic, Esq., Clinton Mikel, Esq., and Gerald Aben, Esq.

On April 8, 2014, the Office of Inspector General (OIG) issued a negative advisory opinion (Advisory Opinion 14-03) regarding a business arrangement between an EHR vendor (the Vendor) and a clinical laboratory, where the in-network laboratory would pay a per-order fee of $1 for each order received using the Vendor’s EHR system. The OIG concluded that the laboratory’s payment of the $1 per-order fee relieved the referring physician of a financial obligation and could be viewed as remuneration in exchange for the physicians’ referrals to the laboratories. As a result, the OIG held that the arrangement was more than a minimal risk of violating the Anti-Kickback Statute (AKS).

Simultaneously with its release of Advisory Opinion 14-03, the OIG issued a Final Notice of Termination for Advisory Opinion 11-18. In Advisory Opinion 11-18, which involved the same Vendor at issue in Advisory Opinion 14-03, the OIG had approved of a similar arrangement. However, as a result of new information obtained during the advisory opinion process, the OIG reassessed its previous conclusion and determined that the business arrangement posed more than a minimal risk of violating the AKS, and, therefore, terminated its previous advisory opinion. This is the first time that the OIG has rescinded a published advisory opinion.

Advisory Opinion 14-03

Under the arrangement proposed in Advisory Opinion 14-03, practices using the Vendor’s EHR system would have the ability to transmit orders to, and receive results from, a laboratory using an interface integrated into the Vendor’s EHR service. Laboratories using the EHR system would be considered in-network. In exchange for the designation “in-network” and the ability to use the feature, the laboratory would pay a per-order fee to the Vendor. The fees would not be capped but would decrease as the number of orders received through the system increased. Practices would not be required to use the in-network feature to order tests from non-network laboratories, but would then have to pay the Vendor a per-order fee for each order submitted to a non network laboratory.

Because the referring physicians would not incur the transmission fees when they referred to “in-network” laboratories (those who have a contract with the vendor), the OIG concluded the arrangement was likely to violate the AKS. Importantly, the OIG believed that while charging the referring physicians a small per referral transmission fee may be unlikely to influence the referring physician’s referral decisions, the risk that such a fee would influence the referral process increases as the number of referrals increases. Accordingly, the OIG reasoned that as physicians typically order laboratory tests with considerable frequency, the payment of the per-order fees by the laboratory posed more than a minimal risk of violating the AKS.

Final Notice of Termination of 11-18

Advisory Opinion 11-18, which was published December 7, 2011, involved a similar arrangement with the same Vendor. Under the arrangement, providers receiving referrals as “Trading Partners” would pay a $1 transmission fee. In turn, a physician that referred to “non-Trading Partner” providers would see a $1 per-order reduction in a discount applied to the payment for the EHR system, which the physician receives for participation in the Vendor’s referral coordination package.

The OIG had originally approved of the arrangement as it had previously concluded that the $1 reduction in the discount would not cause a physician to alter his or her referring decisions. However, after reviewing additional information received as part of its review of the arrangement in Advisory Opinion 14-03, the OIG decided to reconsider its decision. Specifically, the OIG determined that it had previously not understood the potential volume of referrals at issue and how that volume would impact a physician’s decision on where to refer a patient. In a situation where a physician is referring patients at a high volume, the OIG now believes that the incentives offered to the referring physician have the potential to affect his or her decision on where to refer.

Prior to issuing the Final Notice, the OIG had offered the Vendor an opportunity to alter the structure of its arrangement, which the Vendor declined to do.


While Advisory Opinion 14-03 involves an arrangement between an EHR vendor and a clinical laboratory, this same analysis will apply to an imaging provider. EHR vendors, trying to encourage the use of EHR and, in particular, electronic ordering modules, have an incentive to encourage the use of such systems. Furthermore, the OIG acknowledged in Advisory Opinion 14-03 that such providers are at a disadvantage if they do not have the capacity to receive referrals and orders electronically. Nonetheless, because the transmission fee is being shifted from the referring physician to the receiving provider, both arrangements resulted in illegal remuneration to the referring physicians and violate the AKS.

From a practical perspective, it is important for radiologists and imaging providers to examine arrangements they have with EHR vendors to determine whether they are similar in nature to either of the scenarios considered in Advisory Opinions 14-03 or 11-18. If so, radiologists and imaging providers should seek the advice of legal counsel to determine whether those agreements need to be altered in order to avoid liability under the AKS. Furthermore, while the OIG opinions are limited to considering the arrangements under the AKS, these types of arrangements may also implicate the Stark Physician Self-Referral Law and should be carefully analyzed.

Adrienne Dresevic, Esq. graduated Magna Cum Laude from Wayne State University Law School. Practicing healthcare law, she concentrates in Stark and fraud/abuse, representing various diagnostic imaging providers, eg, IDTFs, mobile leasing entities, and radiology and multi-specialty group practices.

Clinton Mikel, Esq. graduated from the University of Michigan Law School. Practicing healthcare law, he concentrates in Stark, fraud/abuse, telehealth/telemedicine, compliance, and the corporate and financial aspects of healthcare practice.

Gerald L. Aben joined the Health Law Partners as an associate in September of 2012. He graduated Summa Cum Laude from Michigan State University College of Law in May of 2009. 

The authors are members of The Health Law Partners, P.C. and may be reached at (248) 996-8510 or (212) 734-0128, or at

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