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Three things pharmacies should know about kickbacks

The Department of Justice (DOJ) aggressively pursued cases alleging Anti-Kickback Statute (AKS) violations against pharmacies in 2020. In one example, the feds built a case against three pharmacy owners for false claims involving compounded medications. The feds accused these pharmacists of over $180 million in health care fraud and money laundering crimes. In another case, the feds accused six pharmacy owners and marketers from Texas of $14 million in kickback violations for referrals.

Pharmacists and pharmacy owners are wise to learn from these cases. Three things to know about kickback allegations in this arena include:

  • The power of the qui tam case. These cases, also known as whistleblower lawsuits, encourage workers to bring forward information about employers who may be in violation of federal law. In exchange, the worker who brings the suit forward can get a portion of any winnings.
  • Keep proper documentation. One of the biggest claims in these cases is that medications, medical devices, or services were not medically necessary. Avoid falling victim to these claims by having proper documentation to back up your actions.
  • Certain benefits to 1099 contractors can cause kickback allegations. It is not uncommon for pharmacies to use marketers but paying commission to a 1099 independent contractor marketing representative can result in allegations of a federal Anti-kickback Statute (AKS) violation.

Pharmacy owners are wise to use these cases and this information as an opportunity to review their practices and adjust were needed. A violation can result in more than just a fine. It can lead to the inability to bill Medicare and, depending on the allegations, potential imprisonment.