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

Share this article:
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.

Share this article:
close

Next Article in News

More in News

CMS expands therapy payment research

The government is expanding its research into alternative therapy payments, to consider more holistic changes to the way Medicare reimburses skilled nursing facilities, the Centers for Medicare & Medicaid Services announced Tuesday.

CDC tightens Ebola guidelines for healthcare workers

The Centers for Disease Control and Prevention has issued more stringent guidelines for how healthcare workers should interact with Ebola patients, following an outcry from nurses and other professionals.

Nonprofit providers face alarming market forces, must rally, LeadingAge chairman says

Nonprofit providers face alarming market forces, must rally, ...

Nonprofit long-term care providers must work together to address alarming trends, or their market share could plummet and the sector as a whole could falter, LeadingAge Chairman David Gehm told ...