A Legal Newsletter From Foley & Lardner LLP
VOL. 05-4
JAN. 28, 2005
In OIG Advisory Opinion 04-17,
posted December 17, 2004 (Advisory
Opinion), the OIG asserts that so-
called contractual joint ventures
can be prosecuted under the federal
anti-kickback statute, even if they
fully comply with all applicable safe
harbors. This significantly raises the
stakes in the OIGs campaign against
what it refers to as contractual joint
ventures. However, it could also have
implications far beyond that, poten-
tially calling into question almost any
safe harbored arrangement that the
OIG chooses to challenge.
“Contractual” Joint Ventures
The OIG has historically viewed
with suspicion joint ventures between
those in a position to refer federal
health care covered items and services,
and those furnishing such items and
services, especially when most or all
of the joint ventures business comes
from referrals by the joint venturer(s)
in a position to refer to the venture.
See, e.g., OIGs Special Fraud Alert on
Joint Venture Arrangements, 59 Fed.
Reg. 65373 (Dec. 19, 1994). More re-
cently, the OIG amplified its concerns,
identifying so-called contractual joint
ventures as potentially also coming un-
der suspicion. See OIG Special Advi-
sory Bulletin on Contractual Joint
Ventures (April 30, 2003) (the Special
Bulletin); see also Law Watch 03-10,
OIG Loses Head, Still Has Teeth
(May 1, 2003) (which discusses the
Special Bulletin).
The OIG views arrangements as
contractual joint ventures even if
the parties do not: (1) form a new
entity; (2) share profits and losses; or
(3) otherwise enter an arrangement
bearing the traditional hallmarks of a
joint venture. The OIG asserts that a
contractual joint venture may exist
even in a lease, services agreement, or
supply contract, when one of the par-
ties to the arrangement (the Owner)
has the ability to refer patients for the
particular items or services covered in
the arrangement, and the other party
(the Manage