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Company Model Provisions: Submit Comments to OIG Today

Wednesday, February 16, 2011

The Office of Inspector General (OIG) is calling for comments on its notice of intent to develop regulations on Special Fraud Alerts.
Of particular interest to ASA, the notice offers an opportunity to recommend the OIG issue a Special Fraud Alert on the economic model, known as the “company model.”  Under the company model, referring physicians, who typically also own the facility where surgical procedures are performed, form a separate anesthesia company in order to share in anesthesia revenue. ASA has previously requested OIG take action and issue guidance on the legality of the model. 
Every ASA member is encouraged to contact OIG with comments about the notice.  It is imperative that we inundate OIG with comment letters requesting guidance on the company model. 

Comments must be submitted by February 28.
Follow these steps to submit a comment to OIG-118-N electronically:

1. Go to!submitComment;D=HHSIG-2011-0001-0001.
2. Copy the text from the sample letter below.
3. Add your edits to make it personal to you and your practice while sticking as closely to our message as possible.  (Please be mindful of the 2,000 character limit or else your message will be truncated.)
Tell your colleagues/partners/administrators/practice managers/students that we need their help, too.  Please encourage others to take this important action.
LET ASA KNOW THAT YOU'VE DONE YOUR PART!  We are committed to generating a large number of comment letters, and we need your help tracking the number of letters sent to OIG.
To report that your comments have been sent, please e-mail the ASA Washington Office at
We need to let OIG staff know how critical this issue is for our specialty and the patients for whom we provide high quality and safe medical care. TAKE ACTION NOW!

Sample text for your comment letter:

As an anesthesiologist, I am submitting comments in response to the OIG solicitation for Special Fraud Alerts. I firmly believe that the “company model” is an appropriate issue for such an alert.

Under the company model, the referring physicians, who typically also own the facility performing the surgical procedure, form a separate anesthesia company that they own. Establishment of a separate anesthesia company permits the facility to bill for facility fees and anesthesia services fees through the same billing/administrative company. Owners of the facility and the anesthesia company then share in the profits generated by the facility fees and the anesthesia service fees.

This company model implicates a number of the specified criteria the OIG considers when issuing Special Fraud Alerts, including:

1. Decreasing the quality of services through incentives for referring physicians to demand administration of inappropriate anesthesia services.
2. Decreasing competition among health care providers due to a lack of legal guidance from OIG thus creating an environment where only the groups or individuals willing to assume the substantial legal risk of accepting this model will remain economically viable.
3. Increasing the potential overutilization of the health care services through referring physician pressures to anesthesia providers to administer inappropriate anesthesia services or deeper levels of sedation than is medically necessary in order to maximize profits.
4. Increasing the cost to Federal health care programs through the increased pressure to maximize utilization of anesthesia services and the increasing number of procedures provided in ASCs to Medicare beneficiaries.

For these reasons, we strongly encourage the OIG to issue a Special Fraud Alert providing guidance to the physician and provider community on the legality of this economic model. We appreciate your consideration of this important matter.

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