A kickback is defined by federal law as any payment made in exchange for patient referrals, whether it is made either publicly or privately, explicitly or surreptitiously, in cash or kind. The courts apply the “One Purpose Test” to determine whether a payment to a doctor or other medical professional constitutes a kickback. According to this standard, a kickback is present if the “one purpose” is to promote patient referrals. Although the doctor was receiving payment for some services provided, it would still be a kickback if one of the payments’ goals was to encourage referrals. The Anti-Kickback Statute is designed to make sure that unethical monetary rewards do not influence the decisions made by healthcare providers but rather are focused on what is most beneficial to their patients (Ferry & Medlin, 2022). Penalties for breaching the A.K.S. include civil and criminal suspensions from federal health care programs, jail imprisonment, and financial penalties.
Name of the Law and or laws:
The federal Anti-Kickback Statute, 42 U.S.C. 1320a-7b (1972), forbids offering both financial and non-monetary rewards for business referrals in the healthcare industry. According to the Centers for Medicare and Medicaid Services, these illegal kickbacks have led to the overuse of healthcare services, higher costs for those services, unlawful patient navigation away from necessary care, tainted medical decisions, and unjust and inefficient healthcare services that jeopardize the reliability of the present healthcare delivery systems.
Management’s Financial Responsibilities:
Regardless of financial reward, healthcare providers must provide patients with high-quality care. To define the obligations of the healthcare provider, numerous legislation and laws were written. The financial accountability of healthcare management involves every referral’s adherence to ethical and regulatory standards. To recommend patients, carry out particular operations, or write prescriptions for drugs, Medicare and Medicaid employees are not permitted to take kickbacks. The AntiKickback Statement categorically forbids anybody from requiring, giving away, or receiving any valuable property or treatment in exchange for medication, patient prescriptions, or treatments. Violations of anti-kickback legislation can result in a $25,000 fine and five years in prison. Therefore, to avoid these effects, financial managers should abide by anti-kickback legislation. Managers must safeguard the objectives of their businesses because breaking anti-kickback laws could result in their forced withdrawal from government healthcare programs. False declarations or statements of a substantial fact while claiming payment under federal health care programs are prohibited by the Anti-Kickback Statute, 42 U.S.C. 1320a, section (1) (Cornell Law School, 2022). Medicare, Medicaid, the Veterans Health Administration, TRICARE, and Indian Health Services are significant examples of federal healthcare programs.
To help a healthcare organization to reach its financial objectives, managing money and risk is the main responsibility of financial management.
Also, a healthcare company will be able to deliver effective healthcare to all of its patients when it has solid and well-organized financial management policies. Evaluation and Planning: Analyzing the healthcare organization’s overall operations and financial performance. This makes it possible for the healthcare company to make plans. Long-term investment decisions entail evaluating implementation plans and figuring out how the investment may influence the future of the investor’s finances, either positively or negatively.
Consequences for Ethical or Legal Breach:
The AKS has harsher sanctions since it carries both civil and criminal consequences and requires proof of intentional violation. False Claims Act responsibility, civil monetary penalties (CMP), program exclusion, up to $50,000 CMP per violation, and a civil assessment of up to three times the kickback amount are just a few of the civil penalties associated with the AKS. Criminal penalties covered under the AKS include fines of up to $25,000 and prison terms of up to five years for each infraction. There are numerous regulations, techniques, and standards available to help healthcare organizations stay compliant with the AKS, despite the seriousness of the penalties for breaking these rules. Making sure that compliance programs are efficient and operating as advised by the Office of Inspector General (OIG) of the Department of Health and Human Services is the overarching strategy that firms can use to keep legal compliance.
Example 1
In an opioid prescription fraud that was billed to TRICARE and private insurance, two doctors were found guilty of several offenses in 2017, including paying illegal bribes. Drs. Xiulu Ruan and John Patrick Couch were found guilty in United States of America vs. John Patrick Couch, M.D., and Xiulu Ruan, M.D., Criminal No. 15-0088-CG-B of taking kickbacks in connection with a federally sponsored health care program, in violation of 42 U.S.C. 1320a-7b(b), among other charges. Millions of narcotic dosages prescribed by both doctors were paid for by TRICARE and private insurance. In May 2017, Ruan and Couch received jail sentences totaling 252 months and 240 months, respectively, to be followed by four years of supervised release. Ruan had to pay restitution of $15,239,369.93 and Couch was required to pay $16,844,569.03. These judgments served justice in the right way. Ruan and Couch overprescribed highly addictive opiates, mainly fentanyl, leading to the narcotic addiction of hundreds of patients. Ruan and Couch deliberately ignored using safe, ethical medical judgment for their patients in favor of pursuing financial gain by abusing, defrauding, and exploiting both their patients and the country’s healthcare system.
Example 2
In the United States, three people were found guilty of breaking the AKS in a recent court case. Case No. 18-11602 involving Larry B. Howard, Nicole S. Bramwell, and Raymond L. Stone; 28 F. Supp. 4th 180 (11th U.S. Cir. 2022). Three people were found guilty of offenses involving millions of dollars worth of TRICARE-funded prescription compound pain creams: pharmacist Larry Howard, doctor Nicole Bramwell, and prescription compound cream marketer Raymond Stone (CaseText, 2022). Regarding the constructive amendment defense, Count 4 accused Howard of giving Bramwell one $5,000 bribe on a certain date, but the prosecution provided proof that he gave her two $5,000 checks on the same day. Howard maintained that the indictment was constructively changed by the trial’s evidence. The Court expressed their disagreement. Because the amount of the bribe paid was not a component of the violation, the fact that there were two $5000 checks did not change the fundamental elements of the conduct accused.
Example 3
The GlaxoSmithKline case, involving a major pharmaceutical company, is the most significant one to have come to light in recent years. In this instance, the US Food and Drug Administration brought three charges of fraud against Glaxo. The first request was for off-package advertising for Paxil and Wellbutrin, two antidepressants. When a drug is used outside of its intended use, it means the FDA has not given its crucial permission before the drug can be sold for that application. There were undoubtedly a few further charges brought against GSK, including maintaining backup data that was needed and making unsubstantiated claims about its diabetes medication Avandia. GSK violated the government’s strict rules in addition to its fundamental integrity. Regarding presents given to doctors by pharmaceutical representatives, the government has established strict regulations. GlaxoSmithKline LLC (GSK), a leading company in the global healthcare industry, agreed to plead guilty and pay $3 billion to resolve its criminal and civil liability related to the company’s illegal promotion of certain prescription drugs, its failure to report certain safety data, and its civil liability for alleged false price reporting. In the specific situation, the corporation entered a plea of guilty to the FOOD AND DRUG ADMINISTRATION (FDA) allegations that were made against it. In response to the incident, a federal official stated flatly that the pharmaceutical sector just views these payments as normal business expenses.
HCO Management’s remedial steps to reverse the non-compliance organizations:
According to Strategic Management Services, the key to guaranteeing adherence to the AKS following a violation is establishing and implementing an efficient compliance program, as advised by the U.S. Department of Health and Human (HHS) Services Office of Inspector General. First, according to HHS advice, HCOs should put documented AKS compliance policies, processes, and standards of behavior into practice. By adhering to these documented policies and procedures and appointing a compliance officer and compliance committee, HCOs can prevent improper referrals, fraud, abuse, and unlawful payments. These parties will monitor HCO activities and offer ongoing training to HCO staff regarding preventing kickbacks and bribes. Along with routine training and education about AKS adherence, the compliance officer and committee shall carry out internal monitoring and audits of AKS compliance. Also, enforcing AKS standards should involve swift remedial action and widely known disciplinary measures.
Conclusion
The Anti-Kickback Statute (A.K.S.) is a federal law that significantly forbids medical facilities from compensating physicians for referrals. In particular, the Anti-Kickback Act [42 U.S.C. 1320a-7b(b)] states that paying for referrals of new clients is illegal in the national healthcare system. The A.K.S. statutes forbid providing money deliberately to get patient referrals as an incentive. By having a strong compliance program, as advised by HHS’ Office of Inspector General for Healthcare, HCOs can prevent AKS noncompliance.
References
United States of America vs John Patrick Couch, M.D., Xiulu Ruan, M.D., Criminal No. 15-0088-CG-B (U.S. District Court, S.D. Alabama, Southern Division. April 10, 2017) https://casetext.com/case/united-states-v-ruan-6CaseText.
United States v. Larry B. Howard, Nicole S. Bramwell, Raymond L. Stone, Case No. 18-11602. 28 F. supp 4th 180 (11th U.S. Cir. March 7, 2022) (Branch, Luck, Ed Carnes). https://casetext.com/case/united-states-v-howard-2201/
Cornell Law School. (n.d.). 42 U.S. Code § 1320a–7b – Criminal penalties for acts involving Federal health care programs. Legal Information Institute. https://www.law.cornell.edu/uscode/text/42/1320a-7bU.S.
Kumaraswamy, N., Markey, M. K., Ekin, T., Barner, J. C., & Rascati, K. (2022). Healthcare fraud data mining methods: A look back and look ahead. Perspectives in health information management, 19(1). https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9013219/
Rose, R. V., & Kass, J. S. (2023). False Claims Act and Anti-Kickback Statute: Avoiding Legal Landmines. Neurologic Clinics. DOI:https://doi.org/10.1016/j.ncl.2023.03.006
Justice. Gov (2017). Dr. Couch and Dr. Ruan Sentenced to 240 and 252 Months in Federal Prison for Running Massive Pill Mill. justice.gov.https://www.justice.gov/usao-sdal/pr/dr-couch-and-dr-ruan-sentenced-240-and-252-months-federal-prison-running-massive-pill
Casetext.com (2022). United States v. Ruan. casetext.com.https://casetext.com/case/united-states-v-ruan-6
Justice.gov (2012). GlaxoSmithKline to Plead Guilty and Pay $3 Billion to Resolve Fraud Allegations and Failure to Report Safety Data. Justice.com.https://www.justice.gov/opa/pr/glaxosmithkline-plead-guilty-and-pay-3-billion-resolve-fraud-allegations-and-failure-report#:~:text=Global%20health%20care%20giant%20GlaxoSmithKline,for%20alleged%20false%20price%20reporting
Oig.hhs.gov (n.d). Fraud & Abuse Laws. Oig.hhs.gov. https://oig.hhs.gov/compliance/physician-education/fraud-abuse-laws/
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