Anti-Kickback: Avoiding the Legal Troubles of Marketing Your Health Care Facility

Motivating sales, offering incentives for vendor partnerships, or gifts in exchange for patient referrals, are good examples of business moves that can get health care facilities into a lot of trouble.

The Anti-Kickback Statute prohibits knowing and willful payment of remuneration to reward or induce patient referrals or generation of business under state or federal health care programs. The statute is designed to protect consumers from sneaky and illegal practices that can impact the products and services we all use.

The Legal Risks of the Anti-Kickback Statute

Businesses should evaluate their promotional and marketing practices regularly to avoid the painful legal kick a “kickback” can deliver. Civil and criminal penalties can be imposed. Here are a few considerations of how bad marketing moves can impact your business legally and how to avoid them.

1. Who is at risk? Marketing personnel can be subject to state and federal anti-kickback statutes.
2. What is legal? The better question is what is illegal? It is illegal to offer anything of value in return for the referral of a patient.
3. Even the little things matter. Marketers need to be aware of basic rules regarding such things as offering meals, entertainment, tickets, gift cards, etc. Cash should never be exchanged as an incentive for doing business.

How Businesses Can Avoid Anti-Kickback Legal Issues

It starts within organizational leadership and is systemic of how companies drive revenue or sales growth because every driven salesperson wants to hit goals and make quotas. Health care is heavily regulated, more than any other industry. Remuneration to independent marketers should not be tied to the volume or value of referrals generated.

Learn what qualifies as a kickback or fee-splitting.

There are many examples of companies being fined for kickback violations. For instance, Rialto Capital Management agreed in 2019 to a $3.6 million payment to the Department of Justice based on claims that they and a hospital in Indiana entered into an illegal financial relationship with two doctors who referred patients to the hospital.

That’s why incentives and motivations should be part of a larger compliance program for health care entities.

Need Legal Help? Let’s Talk

Contact the law offices of Howell, Buchan & Strong, Attorneys at Law for your free consultation at any one of our locations:

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