Free E-Prescribing Technology May Implicate Anti-Kickback Laws
As nursing homes and other providers prepare to implement New York’s e-prescribing mandate by March 2016, they may be presented with offers of free or discounted e-prescribing software or hardware from pharmacy vendors. Before accepting such an offer, providers are advised to consult with their attorneys. The receipt of free or discounted e-prescribing software by a health care provider from a pharmacy vendor may, under certain circumstances, constitute an unlawful payment for referrals of Medicare or Medicaid pharmacy business, in violation of state and federal anti-kickback laws.
The anti-kickback statute makes it a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce or reward referrals of items or services reimbursable by a federal health care program (e.g., Medicare or Medicaid). Criminal penalties for federal anti-kickback violations include fines up to $25,000 and imprisonment for up to five years. Violators may also be subject to civil penalties of up to $50,000 and three times the amount of the kickbacks, as well as exclusion from federal health care programs.
Determining whether a transaction violates anti-kickback laws requires a careful analysis of the facts and the law. There are “safe harbors” under the anti-kickback laws that protect specified transactions from prosecution, including a narrow safe harbor for certain e-prescribing transactions. However, only transactions that precisely meet all of a safe harbor's requirements are insulated from prosecution. A transaction between referral partners that does not fall within a safe harbor may, nevertheless, pose only a minimal risk of influencing referrals, while presenting benefits for consumers. The Office of the Inspector General of the U.S. Department of Health and Human Services (the OIG) is empowered to issue advisory opinions that analyze such transactions on a case-by-case basis to determine whether they would be subject to sanctions under the federal anti-kickback law.
It is also important to note that the OIG has been active in investigating arrangements between nursing homes and pharmacies, just last year announcing a $124 million settlement with Omnicare, Inc., a large provider of pharmaceuticals and pharmacy services to nursing homes for allegedly offering improper financial incentives to skilled nursing facilities in return for their continued selection of Omnicare to supply drugs. Given the complexity of the anti-kickback laws, and the fact-intensive inquiry needed to evaluate the legal implications of a particular transaction, providers should consult with their attorneys before entering into any arrangement with a referral partner that involves the provision of free or discounted goods or services.
Contact: Karen Lipson, klipson@leadingageny.org, 518-867-8383 ext. 124.