Kickbacks to Patients

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Pharmaceutical manufacturers and device manufacturers that provide items of value directly to patients may be in violation of the anti-kickback law, and thereby expose themselves to whistleblower lawsuits arising from such Medicare Fraud. Numerous OIG Bulletins, Guidance, and Alerts describe scenarios involving kickbacks to patients. An OIG 2002 Special Advisory Bulletin specifically provides:

Offering valuable gifts to beneficiaries to influence their choice of a Medicare or Medicaid provider raises quality and cost concerns. Providers may have an economic incentive to offset the additional costs attributable to the giveaway by providing unnecessary services or by substituting cheaper or lower quality services. The use of giveaways to attract business also favors large providers with greater financial resources for such activities, disadvantaging smaller providers and businesses. However, the OIG has interpreted the prohibition to permit Medicare or Medicaid providers to offer beneficiaries inexpensive gifts (other than cash or cash equivalents) or services. For enforcement purposes, the OIG considers inexpensive gifts or services as those that have a retail value of no more than $10 individually, and no more than $50 in the aggregate annually per patient.

Where patients influence prescribing, they have been increasingly offered valuable, non-medical benefits in exchange for selecting particular devices, medical equipment or prescription drug brands. The OIG has expressed concerns that these benefits would interfere with the traditional roles of the physician and pharmacist to provide treatments and recommend products in the best interests of the patient.  More recently, the OIG has been particularly concerned about “indirect marketing or promotional efforts or informal channels of information dissemination, such as ‘word of mouth’ promotion by practitioners and patient support groups.” This includes the use of YouTube to propagate patient testimonials.