[Congressional Record Volume 145, Number 49 (Monday, April 12, 1999)]
[Extensions of Remarks]
[Page E603]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 RENTAL OF PHYSICIAN OFFICES FOR `SATELLITE' REHAB FACILITIES: WHY WE 
                 NEED PHYSICIAN ANTI-FRAUD LEGISLATION

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                         Monday, April 12, 1999

  Mr. STARK. Mr. Speaker, recently, one or more companies (for example, 
Total Health Care Consulting, Inc.) have been writing doctors 
throughout the United States offering to rent office space from them at 
$21 a square foot but in some cases in an amount equal to $64 per 
square foot for the time the space is in use) and this space would be 
used to house rehab therapists. In some cases, these services are 
described as satellites of uninspected comprehensive outpatient rehab 
facilities (CORFs).
  The incentive for gross over-utilization of services in these kinds 
of deals is enormous. Implicit in the deal is, ``doctor, you can make a 
lot of money by renting spare office space to me, but I will have to 
keep busy . . . through referrals of your patients for rehab and 
physical therapy.''
  I forwarded several of these contracts to the HHS Inspector General 
on the grounds that they violate various laws designed to prevent 
financial incentives to over-utilize Medicare services.
  I include in the Record at this point a response to my letter from 
the HHS IG. I want to thank the many good doctors who were troubled by 
this scheme and called my attention to it. As in all things, if someone 
offers you a sweetheart deal that it too good to be true, it either 
isn't true, or it is cutting a legal corner.

       Department of Health & Human Services, Office of Inspector 
                          General, Washington, DC, March 30, 1999.
     Re rental of physician office space.
     Hon. Pete Stark,
     House of Representatives,
     Washington, DC.
       Dear Mr. Stark: We are writing in response to your letter 
     of March 24, 1999, regarding a contract and other materials 
     describing an arrangement where a physician will allow his 
     office to be used as a ``site'' for a new comprehensive 
     outpatient rehabilitation facility in exchange for what 
     appears to be inflated rental fees linked to expected 
     referrals.
       We have received reports of similar activities from across 
     the country. We share your concern that this activity raises 
     serious questions under the Federal fraud and abuse laws, in 
     particular the anti-kickback statute (42 U.S.C. Sec. 1320-
     7b(b)) and we have forwarded your letter and accompanying 
     materials to our Office of Investigations.
       If you have further questions, please feel free to have 
     your staff contact Helen Albert, Director of External 
     Affairs, at (202) 260-8610.
           Sincerely,

                                          D. McCarty Thornton,

                                 Counsel to the Inspector General.

     

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