Kickbacks and Physician Prescribing Habits

Historically, healthcare providers have been greatly influenced by payments from the pharmaceutical industry. The results of a study published in 2013 in the Social Science Research Network, confirmed the obvious, that pharmaceutical kickbacks cloud the medical judgment of health care providers. Numerous cases have been brought by whistleblowers exposing such conduct.

The purpose of the study was to assess whether a health care provider who is paid by a specific pharmaceutical firm is more likely to prescribe that pharmaceutical firm’s drugs. To empirically answer this question, the authors used Pro Publica’s “Dollars for Docs” and “Prescriber Checkup” databases to conduct a cross-sectional regression analysis of physician prescribing habits. Because of the availability of prescription-level data, the authors were able to quantify the impact of payments on prescribers.

The authors concluded, “A payment from a pharmaceutical company corresponds to, on average, an additional 29 Medicare prescriptions per year and this number rises to nearly 100 prescriptions if the payment is at least $1000.” As the authors stressed, the payment-for-prescription effect continues to scale with increasing payments. This type of Healthcare Fraud is a violation of the False Claims Act and Anti-Kickback Laws.

While the increase in prescribing is noteworthy, the true impact is likely far greater when the drug involves high-priced pharmaceuticals that are prescribed by a small cadre of health care providers. In such instances, the payments to loyal prescribers are typically far greater than $1,000, and the resulting impact on government health care programs can quickly climb into millions of health care dollars.

REAL PEOPLE making real change Meet Some of our Heroes

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Kathleen Hawkins, RN MSN, had been employed by Defendant, Catholic Healthcare West (CHW) for approximately 6 years when she decided she had had enough of trying to change the hospital system from within.

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Joe Strom

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Joe Strom contacted us in 2005. We were very grateful that he did. We immediately formed an all-star legal team and a process to stop a very harmful pharmaceutical marketing strategy. It was this process we set into motion that ultimately returned hundreds of millions of dollars to the U.S. Treasury, and a portion of that, very well-deserved, into Joe’s bank account.

Joe told us a very troubling story about the off-label promotion of a pharmaceutical drug for patients who already suffered from chronic heart failure.

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Bruce A. Moilan Sr.

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Bruce Moilan was a seasoned hospital systems expert by the time he contacted our Firm. At the time he decided to file his qui tam lawsuit, he was employed by South Texas Health System as a System Director for Materials Management. In this position, he oversaw $24 million in annual purchases of supplies and equipment and helped determine budget, reduction and cost analysis throughout the contract bidding and negotiations process. His job was to insure proper implementation for purchasing, receiving and management of inventory, for McAllen Hospitals, L.P.

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“I collaborated with Nolan, Auerbach and White on a broad variety of cases where whistleblowers stepped forward to disclose tactics employed by large companies to influence physicians' medical decision-making in patient care. They provide ample resources to not only optimize their client cases, but in doing so consistently leverage best medical evidence to further patient safety and resource utilization.”

— Fred Polsky M.D., Former Medical Director, CMS Zone 7 Integrity Contractor

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