Skip navigation

David McGill Blogger

How Gifts Can End Your Career

Posted by David McGill | May 21, 2013

Why should you care that a Physician's Assistant spent 6 months in prison and another 6 in home confinement?

This particular PA accepted kickbacks from Orthofix in connection with that company's efforts to sell more bone stimulators. The government's investigation of the matter has resulted in 6 different people, including the PA, spending time in jail or wearing an ankle bracelet, financial penalties against each of the individuals, and $42M in criminal fines and civil penalties against Orthofix.

Coming on the heels of the US government suing Novartis for alleged kickbacks and false claims, including opulent dinners for doctors at fancy restaurants and repeated meals at the decidedly-less-opulent Hooters chain, we thought it might be a good time for a refresher course on the Federal Anti-Kickback Law.

What it is.

The AKL creates criminal and civil liability for anyone in the health care industry who knowingly and willfullly pays or receives something of value in order to induce the referral of items or services paid for by a Federal health care program (e.g., Medicare). While people associate the word "kickback" with suitcases full of cash, the AKL makes clear that a much wider range of activity also constitutes a bribe.

Fancy meals, tickets to sporting or concert events, issuing credits to a customer for no reason, providing free administrative/claims-related services - each of these gives the party receiving them something of value. If even one purpose of the transaction is to influence what product or service someone in the health care delivery system uses, then it violates the AKL.

What it means to you.

For anyone thinking that O&P operates outside of these rules, think again. AOPA has a Code of Interactions with Healthcare Professionals​. This code follows most major industry guidelines, including prohibitions on exorbitant or frequent meals, sporting/concert tickets, and giving away free branded items (even if of minimal value). You should follow the principles laid out in the AOPA code not only in your interactions with physicians and other health care providers, but in your dealings with manufacturers as well.

There are exceptions to the AKL, so-called "safe harbors." Product discounts and properly structured rebate programs, though both clearly designed to induce someone to use a particular product or service, serve the public good by permitting access to medically necessary care at a lower cost. Both of these standard business practices fall within the safe harbor provisions of the AKL. But the program where a manufacturer offers to do your documentation for you to reduce your costs? Not so much.  

As government scrutiny of health care generally, and O&P specifically, explodes, you need to carefully consider the "freebies" offered to you and the risks they pose. As the Orthofix case proves, taking gifts can put your business at risk today and you in jail tomorrow.

Össur R&R

The Source for O&P Reimbursement & Regulatory News & Analysis

If you have any questions for Össur’s Reimbursement Team or about Össur’s Reimbursement Services, please contact us at [email protected]