I’ve been pounding the table on this matter and now we see the DOJ recognizing it. The FMV for specimen collection services and MSO services are normally calculated on a “cost plus mark-up” basis. But, the costs to provide the specific service must be commercially reasonable. The markup on the costs can be FMV, but if the costs are not reasonable, then the fee arrangement is unlikely compliant. For example, paying a family member employee (admin staff) an excessive compensation or using a Mercedes to deliver specimens to the lab are unreasonable costs, regardless of whether the markup is fair and customary.
In this case, (see the link below), the referring physician received kickbacks from a lab in the form of “commercially unreasonable fees to purportedly collect urine specimens for testing..”. In addition, the same referring physician received an excessive amount of space rental payments because the lab whom he ordered tests from rented “a commercially unreasonable amount of space and excessive days and time” from the physician.
