NATIONALLY RECOGNIZED FEDERAL LAWYERS
Last Updated on: 4th August 2023, 06:13 pm
Why Paying Patients is Risky and May Lead to Criminal Charges
The federal government considers payments made to patients in exchange for their choice of a particular product or provider as a criminal offense. The Anti-Kickback Statute, the Beneficiary Inducement Statute, and the False Claims Act are fundamental laws that govern patient bribery cases. In this article, we will discuss why paying patients is risky and may lead to criminal charges.
The Anti-Kickback Statute (42 U.S.C. ¬ß 1320a-7b(b)) prohibits individuals or entities from knowingly or deliberately paying or receiving remuneration in exchange for referrals or the purchase of any item or service that might be paid for by a federal health insurance program. Both direct and indirect remunerations are prohibited under this statute.
Moreover, both the payer of kickbacks and the recipient of kickbacks are implicated under this law since it is reciprocal. However, there are exceptions where this statute does not apply; these include situations where beneficiaries do not participate in federal healthcare programs.
Remuneration refers to anything of value transferred directly or indirectly, overtly or covertly, in cash or kind according to OIG Advisory Opinion No. 12-21 (OIG AO 12-21). It can encompass more than just cash but also gifts such as gift cards, waiver fees, complimentary equipment prizes etc.
Inappropriate remuneration occurs when it persuades patients into choosing specific providers’ prescriptions medical services through inappropriate means like giving them gift cards so they would provide their Medicare details which were then used to bill lab testing fraudulently establishing fictitious medical studies as a shroud for disbursing payments coaxing them into employing certain providers.
Penalties: A breach of the Anti-Kickback statute is considered a felony offense punishable with up to five years jail time fines amounting up $25,000 for each infraction and compulsory exclusion from federal healthcare programs. Any violation of the Anti-Kickback Statute is automatically considered a violation of the False Claims Act.
Beneficiary Inducement Statute
The Beneficiary Inducement Statute (42 U.S.C. ¬ß 1320a-7a(a)(5)) imposes lofty civil cash penalties on anyone who offers or furnishes remuneration to a federal healthcare beneficiary that person is aware (or should be aware) is likely to bias that beneficiary to order or receive any product or service from a particular provider, practitioner, or supplier.
Offering valuable gifts raises quality and cost concerns since providers may have an economic incentive to offset additional costs attributable to giveaways by providing unnecessary services substituting cheaper lower-quality services. The use of giveaways also favors large providers with greater financial resources for such activities disadvantaging smaller providers and businesses according to OIG Special Advisory Bulletin covering Offering Gifts and Other Inducements to Beneficiaries (August 2002) (OIG SPB 2002).
Exemptions: The most important exceptions are waiving coinsurance deductible provided on an individualized basis based on good faith determination of financial need remunerations of nominal value defined as less than $15 per item less than $75 annually  i.e., t-shirts subject interpretation restrictions.
Penalties: Sanctions include monetary penalties amounting up $10,000 for each product/service billed in violation temporary permanent exclusion from participation in federal healthcare programs recompense equal three times government’s damages three times amount billed for each item/service.
False Claims Act
In the False Claims Act (31 U.S.C. ¬ß 3729 et seq.), individuals entities can be held liable for submitting false fraudulent payment claims government healthcare programs. Examples include physicians billing Medicare unnecessarily laboratories billing Medicare tests never administered etc.
Punishment includes financial penalties ranging between $10,781.40 on the low end to as lofty as $21,562.80 on the high end for every false claim three times amount of damages inflicted on government temporary permanent exclusion from participation in federal healthcare programs criminal prosecution.
In conclusion, paying patients is risky and may lead to criminal charges since it violates fundamental laws that govern patient bribery cases such as the Anti-Kickback Statute, Beneficiary Inducement Statute, and False Claims Act. The penalties for violating these laws are severe and can result in fines or imprisonment. Therefore, it is essential to avoid any form of remuneration that persuades patients into choosing specific providers’ prescriptions medical services through inappropriate means like giving them gift cards or other incentives.