On July 16, the U.S. Department of Health and Human Services, Office of the Inspector General (OIG) issued an unfavorable advisory opinion (OIG Advisory Opinion No. 13-09) concerning equity interests in the parent company of a group purchasing organization (GPO). The OIG declined to protect an arrangement under which GPO members would gain equity interests in the GPO’s parent company in return for extending their contracts, committing to maintaining their purchasing volume and relinquishing a portion of their administrative fees. The arrangement could violate the federal Anti-Kickback Statute (AKS) by generating prohibited remuneration for federal health care business, the OIG concluded.
The requestor of the advisory opinion is a publicly traded company that provides financial and performance-improvement technology-based products to clients, which are chiefly hospitals and health systems. The requestor’s wholly-owned subsidiary operates a GPO that serves primarily hospitals and integrated delivery systems.
