Five ambulance companies have agreed to pay $11.5 million to resolve a False Claim’s Act suit brought by a former competitor alleging allegations of the Anti-Kickback statute. (United States ex rel. Carlisle v. Pacific Ambulance, S.D. Cal., No. 3:09-cv-02628-L-BLM, dismissal 5/7/15).

The complaint was levied by the former CEO of a medical care transportation company against several former competitors. The CEO acknowledged the discounts as having historically been a standard practice across the industry and even admitted his own company once offered these same services, but stopped after learning of another allegation of impropriety involving similar conduct. This case continues a trend that anything that could even conceivably be portrayed as being “of value” can be framed as an incentive for referrals and thus become the subject of Anti-Kickback statute scrutiny. Long Term Care providers should proactively evaluate their existing relationships because liability for a violation of the Anti-Kickback statute runs both ways: to the person providing the kickback as well as the party receiving the benefit.

This case should act as a reminder to all healthcare providers and their ancillary partners of the expanding reach of the Anti-Kickback statute and the potential for scrutiny. It illustrates that the scrutiny can emanate from more than just the government. It could result from a survey, an audit or investigation, from competitors within the marketplace, or former employees through the use of the false claims act qui tam provisions. It should also underscore the importance of consistently reevaluating internal practices based on today’s norms. What was once acceptable may no longer be and “everyone was doing it” is no longer a viable defense (if it ever was).

This settlement comes on the heels of the March 2015 OIG Advisory Opinion No. 15—04 (available at https://oig.hhs.gov/fraud/docs/advisoryopinions/2015/AdvOpn15-04.pdf  (last accessed May 28, 2015)) in which the Inspector General opined that a laboratory waiving some portion of the patient’s fees to obtain exclusive rights to the medical practice’s laboratory work might violate the Anti-Kickback statute. In that instance, the perceived potential benefit to the providers included such “controversial” concerns as improving efficiency for doctors, avoiding administrative burdens, and enjoying consistency in communications regarding the reporting of test results. We are, arguably, nearing a point where practices which denote the hallmark of good business in any other industry can continue to be vilified and, potentially, criminalized in healthcare.

These decisions illustrate the continuing trend of broadening the scope of potential Anti-Kickback statute liability. The most prudent course of action is to intensely analyze anything (beyond quality services) that might be cast as providing incentive to refer. Regularly performing these assessments (internally or externally) is the best practice for providers intent on avoiding the scrutiny of the federal government’s investigative arm or the burdens of a False Claims Act.