The revenue components for the surgeon-owned shell company are from billing a “technical fee” to the hospital, and a “professional fee” to the insurance carrier. The only company expenses are the nominal fees it pays to the IONM company for the neuromonitorist and “management services,” and to the neurology practice for providing the neurologist. The surgeon-owned company’s profits, which can be considerable, are simply the difference between these expenses and the revenues it obtains from billing insurance carriers. Due to the strict laws against self-referrals and kickbacks and government sponsored programs, billing for Medicare, Medicaid, and replacement plans is carved out and handled by the IONM company and/or neurology practice directly. Thus, under the scenario described by the OIG, when IONM is needed, the surgeons would essentially refer any Medicare or Medicaid patients directly to the neuromonitoring company – in which they have no ownership – and all their patients who have commercial insurance would be referred to the surgeon-owned entity, which then in effect “subcontracts” with the same neuromonitoring company. Several variations of these “surgeon deals” have proliferated over the past 8-10 years, and comprise the primary business model of a handful of IONM companies in certain parts of the country. The scenario in the advisory opinion outline is just one of these variations. The advisory opinion stated that the arrangement has many of the characteristics of “suspect contractual joint ventures,” about which the OIG has had longstanding concerns. The surgeon would not incur any expense other than the formation of the shell company, and would provide only a stream of patient referrals. The established IONM company, on the other hand, would do all the work and, in competition with its own usual business model, allow the IONM services to be billed to third-party payors through the surgeon’s shell company so that profits would flow to the surgeon. To the extent that the patients referred to the shell company have their care reimbursed by federal health care programs (including Medicare, Medicaid, and replacement plans), this arrangement will violate the AKS. The advisory opinion noted that the opportunity to profit from their own referrals could “corrupt the surgeon owners’ medical decision-making and result in overutilization or inappropriate utilization of IONM services.” The surgeons’ referral of federal program patients to their own separate entity most likely also violates the federal Stark Law, but the Stark Law is outside the subject matter scope of OIG advisory opinions. In order not to violate the AKS, IONM companies that enter into “surgeon deals” must ensure that federal health care program patients are not referred to the surgeon-owned companies. Generally, it has been common practice to “carve out” these patients to ensure that the IONM service is not billed through the surgeon-owned shell company in order to avoid violating the AKS. However, while some IONM companies that enter into these arrangements continue to accept referrals of federal program cases directly from the surgeon owners, bypassing the surgeons’ newly formed entities, the advisory opinion confirms OIG’s prior view that this is also unlawful. Because the financial arrangements between the established IONM company and the surgeon-owned company are all intertwined, even though the federal and nonfederal cases are supposedly kept separate, the revenues from these cases can be viewed as mixed together.