OIG: Nursing home agreement with supplier would violate anti-kickback statutes

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Agreements that would let a medical supply company become an exclusive supplier to a county-run skilled nursing facility would likely violate anti-kickback statues, the Office of the Inspector General said in an advisory opinion posted Thursday.

In one proposed arrangement submitted to the OIG, the supply company would provide the SNF with items both covered and not covered by Medicare. However, the company would have provided non-covered supplies below market cost if the SNF used the supplier exclusively. Under a second proposed arrangement, the company would have formed a separate entity. However, the structure of supply to the SNF would be the same.

Anti-kickback laws make it illegal to receive or solicit any payment for referrals of items or services reimbursable by a federal healthcare program. The OIG concluded the proposed arrangements could potentially violate the anti-kickback statutes, writing it could not exclude the possibility that the supply company “may be offering improper discounts to the SNF for the non-covered items and related services with the intent to induce referrals of more lucrative federal business.”

“Nor are we able to exclude the possibility that the SNF may be soliciting improper discounts on business for which it bears risk in exchange for referrals of business for which it bears no risk,” the opinion states. If it had moved forward with the arrangements, the supplier could be subject to a maximum fine of up to $25,000, the OIG wrote.