COMMENTARY

Kickbacks and the Trouble They Cause

Carolyn Buppert, MSN, JD

Disclosures

May 03, 2021

It is illegal for a healthcare practitioner to take anything of value in return for the practitioner's order, referral, or prescription, when the service or good is paid for by the federal government. In some states, anti-kickback laws extend this prohibition to goods and services paid for by commercial health insurance.

Carolyn Buppert, MSN, JD

It doesn't matter that it is acceptable in some industries to reward someone who refers business; in healthcare, paying for referrals is a crime. It is a crime to be on either end of a kickback — to ask for payment, to receive payment, or to make payment. The US code on criminal penalties for acts involving federal healthcare programs states:

All health care practitioners are prohibited by federal law from paying, soliciting, or receiving anything of value in order to induce the referral of business reimbursable by a federal health care program.

Physicians and nurse practitioners have gotten into trouble for taking payments in return for orders for durable medical equipment, diagnostic testing, and pharmaceuticals as well as referrals for behavioral healthcare.

Here is an example of a kickback scheme, where a nurse practitioner was charged and sentenced:

Insys Therapeutics, the manufacturer of the drug Subsys, a fentanyl sublingual spray, had a "speaker program" where the company paid healthcare practitioners to talk about the drug at lunches and dinners. The speakers were high prescribers of the spray. If a speaker did not meet certain prescribing metrics, the speaker was not asked to continue in the program.

A nurse practitioner in Connecticut was in the program and received over $80,000 in speaking fees. Often, no one but the speaker and the drug representative were at the talks. Therefore, it was difficult to argue that the nurse practitioner was providing a needed service in return for the money. The nurse practitioner prescribed the drug more than any other practitioner in the state.

Both the company and the nurse practitioner were charged with participating in a kickback scheme. The company president was sentenced to 5 1/2 years in prison. The nurse practitioner was sentenced to one to two years of probation; she had to surrender her license; and she is excluded from participation in Medicare and Medicaid, forever.

In North Carolina, a nurse practitioner accepted money in return for signing orders authorizing certain individuals to receive behavioral health services. She was charged under the anti-kickback law and pled guilty to illegal remuneration.

A nurse practitioner in Missouri signed prescription forms and authorized automatic refills for compounded medications which had not been scientifically evaluated for effectiveness nor deemed necessary for individual patients. The compounding pharmacy paid them for their signatures. The nurse practitioner was sentenced to 3.5 years in prison. In addition, she was ordered to pay $1.37 million in restitution to the government and health insurance companies. She also must serve 3 years of supervised release.

The problem with kickbacks, society-wise, is that they can lead to overutilization of goods and services, increased costs for payers, skewed medical decision-making, and unfair competition. The healthcare provider receives a short-term reward in return for long-term destruction of career, reputation, and bank account, and even loss of freedom.

A clinician's authority to write orders is valuable, not only to patients but also to companies that sell equipment, pharmaceuticals, and services. People may try to pay clinicians for their signatures, perhaps without realizing that it is illegal. Don't go along with it; it's not worth it. It doesn't matter that the service or drug was medically necessary or that you would have prescribed the drug or ordered the service or equipment even without payment. It doesn't even matter that the company didn't pay you money, but instead bought you dinner or sent you on a trip. The anti-kickback laws prohibit healthcare practitioners from taking "anything of value."

What about practitioners who sell supplements or skin creams from their offices and receive a cut of the proceeds from the manufacturer? It's a kickback. However, supplements and cosmetics typically aren't paid for by Medicare, Medicaid, or commercial insurance. So, while those practitioners probably wouldn't be prosecuted under the federal anti-kickback statute, what they are doing is questionable, ethically.

An American Medical Association ethics opinion recommends that physicians not sell health-related products from their offices because it is a financial conflict of interest, places pressure on the patient, and may erode patient trust. The opinion reminds physicians that their obligation is to serve the interests of their patients before their own. There is no reason that the ethics considerations of physicians and nurse practitioners would differ.

Carolyn Buppert (www.buppert.com) is an attorney and former nurse practitioner who focuses on the legal issues affecting nurse practitioners.

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