The HHS Office of Inspector General has issued new guidance surrounding ASC ownership transfers and Anti-Kickback Statute scrutiny, the National Law Review reported March 24.
The OIG clarified that ASC ownership transfers structured as a part of legitimate estate planning can pass AKS scrutiny even if they don’t meet every safe harbor requirement because of the “sufficiently low risk of fraud and abuse in the context of bona fide estate planning with appropriate documentation,” according to the report.
The OIG outlined a three-phase ownership transition plan at a Medicare-certified ASC wholly owned by a pain management physician nearing retirement, offering a roadmap for ASCs navigating similar arrangements.
The sole physician-owner sought to gradually transfer his ASC ownership to his non-physician spouse, his two physician children (also pain management specialists), and future physician investors — all as part of a documented estate plan backed by trust documents and a family business plan. The transition was structured in three phases:
- Phase 1: The physician retains majority shares, gifts a portion to his non-physician spouse at no cost, and offers his two children the option to purchase shares at fair market value.
- Phase 2: Up to 100 additional shares are offered to future physician investors at fair market value, potentially converting the ASC to a multi-specialty facility. The original physician-owner retires, certifies he will not influence referrals, and steps away from all governance.
- Phase 3: Upon the deaths of both the physician and his spouse, all remaining interests transfer to the two physician children.
The OIG found that the financial distributions in Phase 1 qualified for the single-specialty ASC safe harbor, and Phases 2 and 3 qualified for the multi-specialty safe harbor. However, several elements — particularly the gifting of shares — fell outside safe harbor protection.
Under the new clarification, the OIG concluded it would not impose administrative sanctions in any phase because the overall fraud and abuse risk was sufficiently low, citing the estate planning documentation and certifications provided by the requestor.
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