Charitable Donations Do Not Result in Liability Under False Claims ActMarch 16, 2018
The U.S. Court of Appeals for the Third Circuit recently held that charitable donations found in violation of anti-kickback statutes do not necessarily provide the grounds for liability under the False Claims Act (FCA). According to the ruling, without additional evidence that the alleged kickback was tied to a specific claim for payment, violators of the Anti-Kickback Law will not face additional liability under the FCA.
The complaint filed in U.S. ex rel. Greenfield v. Medco Health Solutions, Inc. et al alleges that a pharmaceutical manufacturer’s charitable donations violated anti-kickback statutes and made the manufacturer liable under the FCA. Under terms of the Anti-Kickback Statute, knowingly offering or paying remuneration to any person for the purposes of inducing the person to refer an individual for federally funded health care services is prohibited. The Anti-Kickback Statute included a provision that any services rendered because of the violation of the statute will constitute a false claim under the FCA.
U.S. ex rel. Greenfield v. Medco Health Solutions, Inc. et al
In the Greenfield case, the government alleged that the specialty pharmacy, Accredo, violated the Anti-Kickback Statute by donating to certain charities for inducing them to refer patients back to the pharmacy. According to the complaint, by submitting claims for reimbursement for services provided to federally insured patients, Accredo also filed a false claim under the FCA. The district court held that the government failed to demonstrate that federally insured patients chose Accredo because of their donations to the charity.
The Third Circuit upheld the district court’s decision, which held that to prevail under the FCA, there must be a link or connection between the alleged kickback and the submitted claim. In agreeing with the amicus curiae brief filed by the Department of Justice on appeal, the Court found that neither the FCA nor the Anti-Kickback Statute required evidence that the kickback directly influenced a patient’s decision to obtain services from that pharmacy.
The Greenfield case follows several broad investigations by the Department of Justice into the charitable donations of pharmaceutical manufacturers to organizations that operate patient assistance programs. In December 2017, the Department of Justice reached a $210 million settlement with pharmaceutical company, United Therapeutics Corporation, to resolve claims that the company used charitable donations as kickbacks with respect to the prescribing of the company’s hypertension drugs. The Department of Justice promises continued scrutiny with respect to charitable donations by pharmaceutical companies in the future.
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If you are a physician that has been accused of violating anti-kickback laws, a Philadelphia physician lawyer at Sidney L. Gold & Associates, P.C. is ready to aggressively defend your case. With an office conveniently located in Philadelphia, Pennsylvania, we proudly represent physicians and other medical professionals throughout the surrounding areas. To schedule your initial consultation, call us today at 215-569-1999 or submit an online inquiry form.