Rebate Program Kickback Defense for Healthcare Providers

We Defend Healthcare Providers, Pharmaceutical Companies, and Other Clients in Rebate Program Kickback Investigations Nationwide

The Anti-Kickback Statute is designed to help keep Medicare and Medicaid costs in check. It prohibits healthcare providers, pharmaceutical companies, and other companies in the healthcare industry from paying or receiving kickbacks in exchange for Medicare or Medicaid patient referrals or the purchase of drugs, equipment, or supplies that are eligible for Medicare or Medicaid program rebates.

But, while the Anti-Kickback Statute’s prohibitions are broad, they are subject to several exceptions, or “safe harbors.” As a result, many types of payments and financial relationships that involve healthcare services, medications, medical equipment, and medical supplies provided to Medicare and Medicaid patients are permitted. But, to secure the protection of these safe harbors, providers and other businesses must carefully structure (and document) their payments and relationships—and they must generally do so with a specific safe harbor in mind.

Failure to do so can lead to scrutiny from the U.S. Department of Justice (DOJ), U.S. Department of Health and Human Services Office of Inspector General (DHHS OIG), and other federal authorities. In fact, in many cases, even legitimate financial relationships will come under scrutiny. When facing scrutiny, providers and other businesses must be able to rely on experienced counsel to present an effective rebate program kickback defense.

Experienced Rebate Program Kickback Defense Counsel

At Oberheiden P.C., we represent healthcare providers and other businesses that are facing federal scrutiny related to their financial relationships within the healthcare industry. We have extensive experience in the area of Anti-Kickback Statute defense, including experience defending clients during rebate program kickback investigations. Regardless of whether your practice can demonstrate compliance with an Anti-Kickback Statute safe harbor or you need to seek to avoid unnecessary consequences for improper payments, we can use our experience to build and execute a comprehensive defense strategy focused on protecting you—and your practice or business—to the fullest extent possible.

In addition to our experience in the area of rebate program kickback defense, several of our lawyers have prior experience handling Medicare and Medicaid fraud investigations and prosecutions at the DOJ. As former U.S. Attorneys and Assistant U.S. Attorneys, these lawyers have first-hand knowledge of the government’s tactics for investigating and prosecuting Medicare and Medicaid rebate program fraud. We leverage this knowledge to our clients’ advantage; and, while past results do not guarantee future outcomes, we have had significant success defending clients in high-stakes Medicare and Medicaid fraud investigations.

The DOJ is Targeting Medicare and Medicaid Rebate Program Kickbacks

Recent events suggest that the DOJ is actively targeting Medicare and Medicaid rebate program kickbacks, or what it calls “illegal kickback schemes.” But, even when our clients have paid or received prohibited Kickbacks in connection with their Medicare or Medicaid business, rarely—if ever—can their financial arrangements be classified as fraudulent “schemes.” In nearly all cases, healthcare providers and other businesses face scrutiny not because they have intentionally violated the Anti-Kickback Statute, but instead because either: (i) they have inadvertently violated the law; or, (ii) apparent red flags in their billing data or unjustified whistleblower complaints have triggered an unwarranted investigation.

Two recent cases illustrate the DOJ’s efforts to target Medicare and Medicaid rebate program kickbacks and other types of rebate program fraud:

• Pharmaceutical Distributor Agrees to $13 Million Settlement Following Rebate Program Kickback Investigation – In 2022, pharmaceutical distributor Cardinal Health, Inc. agreed to pay more than $13 million to settle allegations that it paid illegal kickbacks “to induce physicians to purchase drugs for use on Medicare patients.” While distributors and other companies can offer discounts to physicians and other customers under the Anti-Kickback Statute’s safe harbor provisions, Cardinal Health failed to qualify because “the upfront discounts it provided to its customers were not attributable to identifiable sales or were purported rebates which Cardinal Health’s customers had not actually earned.” According to the DOJ, the illegal payments cost Medicare millions of dollars in fraudulent claims.
• Drugmaker and CEO Agree to Pay Up To $50 Million for Underpaying Medicaid Rebates – In 2023, drugmaker Nostrum and its CEO agreed to pay up to $50 million to settle allegations that the company had underpaid Medicaid Drug Rebate invoices for several years. According to a DOJ press release, Nostrum “reduced the amount that it paid to the Medicaid program by improperly calculating the rebates it owed, even after hiking the cost of one of their drugs by over 400%.” In doing so, the DOJ alleges, Nostrum and its CEO illegally diverted taxpayer funds for their own profit.

Oberheiden P.C. did not represent the defendants in either of these cases.

Regardless of whether the allegations underlying a rebate program kickback investigation can be substantiated, mounting an effective defense is critical. Medicare and Medicaid rebate program violations can expose healthcare providers and other businesses (and their owners and executives) to substantial penalties under the Anti-Kickback Statute and other federal laws. This includes criminal penalties in some cases. We have helped healthcare practices, businesses, and other clients across the country avoid both civil and criminal liability in cases involving a wide range of allegations by taking a strategic and proactive approach to our clients’ defense.

How We Defend Healthcare Clients Against Rebate Program Kickback Allegations

When facing allegations of paying or accepting unlawful kickbacks out of Medicare or Medicaid rebates, avoiding unnecessary liability requires an informed and effective defense. Here are some of the steps we take to protect our clients that are facing rebate program kickback allegations:

1. Gaining a Clear Understanding of the Payments At Issue

When you engage our firm to represent you, one of the first steps we will take will be to thoroughly examine the nature of the payments at issue. We will thoroughly assess any potential Anti-Kickback Statute implications, as well as any potential implications under the False Claims Act and other applicable federal laws.

2. Evaluating the Applicability of the Anti-Kickback Statute Safe Harbors

If the payments at issue meet the basic definition of a “kickback” under the Anti-Kickback Statute, we will next evaluate the applicability of the Anti-Kickback Statute safe harbors. If we can clearly show that a safe harbor applies, then this should help to facilitate an efficient and favorable resolution.

3. Formulating a Custom-Tailored, Cohesive, and Comprehensive Defense Strategy

In all cases, a custom-tailored, cohesive, and comprehensive defense strategy is key. Once we have a clear understanding of the facts at hand, we will evaluate all potential defenses and help you make informed decisions about how to proceed with your practice’s or business’s defense.

4. Intervening in the DOJ’s or DHHS OIG’s Investigation

As soon as possible, we will intervene in the federal government’s investigation. We will begin communicating with the investigating agents and attorneys on your behalf, and we will begin steering the investigation toward our targeted outcome.

5. Working to Efficiently Secure a Favorable Outcome

Generally, the best-case scenario is to resolve a federal rebate program kickback investigation without civil or criminal charges being filed. We work diligently to resolve our clients’ cases during the investigative stage, as this avoids both the publicity and the inherent uncertainty of federal healthcare fraud litigation.

FAQs: Medicare and Medicaid Rebate Program Kickback Defense

Contact the Federal Health Care Defense Lawyers at Oberheiden P.C.

If you would like to know more about our experience defending healthcare providers and other clients against rebate program kickback allegations, we encourage you to contact us promptly. Please call 888-680-1745 or contact us online to arrange a complimentary initial consultation.