On December 23, 2024, the United States Attorney for the District of Puerto Rico and the US Department of Health and Human Services, Office of Inspector General (HHS-OIG), announced that a healthcare services company had agreed to pay $15,228,340 to resolve False Claims Act allegations related to a gift card incentive program that violated the Anti-Kickback Statute.
According to the settlement agreement, the company submitted or caused the submission of claims to the Medicare Program for a gift card incentive scheme operated from January 2018 to December 2022. The United States alleged that this scheme violated the Anti-Kickback Statute and resulted in False Claims Act violations.
The scheme involved the distribution of gift cards to administrative assistants of providers to induce referrals, recommendations, or arrangements for enrolling Medicare beneficiaries in the company’s Medicare Advantage plan. This led to $6,091,336 in associated premium payments.
As part of the settlement, the company entered into a five-year Corporate Integrity Agreement (CIA) with HHS-OIG. The CIA requires the company to implement procedures to ensure that new or existing marketing arrangements comply with the Anti-Kickback Statute. Additionally, the company must engage an Independent Review Organization to review its systems for tracking such arrangements and to conduct annual reviews of a sample of these arrangements. The negotiated settlement took into account the company’s cooperation and the implementation of internal controls.
“Investigating healthcare fraud remains a high priority for the Department of Justice, and the United States Attorney’s Office will aggressively pursue those who violate US healthcare laws,” said United States Attorney W. Stephen Muldrow.
Compliance Perspective
Issue
Under federal and state anti-kickback statutes, it is illegal to knowingly and willfully offer, pay, solicit, or receive anything of value to induce or reward referrals for federal or state healthcare program business. This prohibition applies to both those who pay for referrals and those who receive them. Kickbacks can take many forms, including bribes, rebates, and non-cash incentives such as free rent, meals, or excessive compensation for medical directorships. The Anti-Kickback Statute is designed to ensure that medical decision-making is not influenced by improper financial incentives, but is instead based on the best interests of the patient. Failure to report kickbacks promptly can result in lawsuits, fines, and other sanctions.
Discussion Points
- Review and update policies to ensure they comply with the False Claims Act and Anti-Kickback Statute. Include clear guidelines related to referrals, marketing, and enrollments, and establish procedures for reporting violations.
- Train staff, especially those involved in marketing, billing, and enrollment, about the Anti-Kickback Statute and False Claims Act. Ensure they understand what constitutes improper inducements and how to report potential violations. Document all training sessions and maintain the records.
- Conduct routine audits to ensure compliance with federal laws, particularly around marketing practices and claims submissions. These audits should include checks on whether staff are following the rules and reporting any improper practices. Additionally, audits should assess the accuracy of claims and documentation to detect potential issues early.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*
