OIG: Firm can't be only supplier to SNF

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A skilled nursing facility should not use a medical supply company as an exclusive supplier in order to get lower prices, according to an advisory opinion from the Office of the Inspector General.

In a proposed arrangement run by the OIG, the county-run SNF asked if it could use the supply company for items both covered and not covered by Medicare. The supply company would provide non-covered items below market cost in return for the SNF using the company exclusively. Under another scenario, the company would form a separate entity, but the structure of the supply chain would still be the same.

In its Aug. 4 opinion, the OIG said that both of the arrangements could potentially violate anti-kickback statutes. The arrangements “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.
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