Ask the legal expert: the fine line between vendor gifts and kickbacks

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Attorney John Durso, Ungaretti & Harris LLP
Attorney John Durso, Ungaretti & Harris LLP
I contribute to purchasing decisions at our facility and am not sure what type of “premiums” or gifts I should accept from vendors and suppliers. Any advice on this?

Believe it or not, if the federal government pays for the vendors' or suppliers' goods, services or items under a federal healthcare program, accepting such premiums or gifts could be a federal crime.

Generally known as the Anti-Kickback Statute, federal law says the following: “Whoever knowingly and willfully solicits or receives any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind … in return for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any good, facility, service or item for which payment may be made in whole or in part under a Federal healthcare program, shall be guilty of a felony ...”

Similarly, whoever knowingly and willfully offers or pays any such remuneration in return for the facility's business could also be committing a felony.  

Granted, the Anti-Kickback Statute requires a “bad intent” and is dependent on the facts and circumstances surrounding the particular conduct rather than a bright-line ban on the conduct.  However, the safest way to avoid prosecution is not to accept anything of value from a vendor or supplier.  

The facility's policy should unequivocally prohibit facility employees from accepting anything of value from its vendors and suppliers and require employees to report to management if anyone offers or pays any remuneration to an employee.

That is the federal law. Some states have their own anti-kickback statutes, so you should also be aware of and comply with your state's laws.

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