The Department of Justice (DOJ) recently announced success in the prosecution of a case involving allegations of fraud within pharmacies located throughout New York and New Jersey. The government accused the pharmacy owners of paying kickbacks to doctors and healthcare workers to encourage the facilities to recommend patients use their pharmacies.
The government states the pharmacy owners used lavish meals, gifts, cash and wire transfers as bribes. The government also claims that from 2011 through 2018, those involved in the scheme concealed funds from the Internal Revenue Service (IRS). This, the prosecution states, led to further financial losses for the government. The tax revenue lost was estimated around $9 million.
When faced with the evidence, the accused agreed to plead guilty to conspiracy to violate the federal anti-kickback statute (AKS) and conspiring to defraud the IRS. These convictions can come with up to five years imprisonment and $250,000 in fines, each.
This case provides some important lessons for those within the healthcare industry that are attempting to work together with other professionals to provide collaborative care.
Lesson #1: The government is aggressive about alleged AKS violations.
This case shows that the government continues its aggressive prosecution of AKS violations. It is important to know that essentially anytime the government can claim a healthcare provider fraudulently billed Medicare or other government programs, it can likely move forward with an AKS claim. In this case, it argued the bribes led to prescriptions with the pharmacies that may not have otherwise occurred. The pharmacies then filed for payment from Medicare, supporting the use of the AKS law.
These claims can result in more than just a fine and harsh words — prison time is not uncommon. As such, anyone that faces such allegations and finds themselves under investigation is wise to take the matter seriously.
Lesson #2: Collaboration is still important.
The government has pushed for collaborative care efforts in recent years, recognizing that some relationships between healthcare providers can lead to more efficient care and better quality for the patient. However, balancing these relationships with the rules of the AKS and other regulations is not easy. Proactive use of internal audits can help to better ensure your group maintains this balance while providing the best care possible for your patients.