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Should Veterinary Compounders Care About Anti-Kickback Statute Compliance?

Veterinary compounders should be concerned with and pay particular attention to compliance with state and federal laws that control the relationship between pharmacies and referral sources. The Federal Anti-Kickback Statute (Federal AKS) imposes criminal penalties against individuals and entities that pay or receive remuneration in return for referring an individual for services paid under a Federal health care program. Veterinary compounders have historically avoided scrutiny under the Federal AKS, as no Federal health care programs are involved in veterinary compound remuneration. However, most states have enacted statutes and regulations mimicking the Federal AKS, and even broadening the Federal AKS’s scope, on a state level.

Veterinary compounders should be aware of the risks associated with State specific anti-kickback equivalents as well as state insurance regulations. These state laws potentially prohibit the exchange of remuneration in return for the referral of business to compounding pharmacies, even in the veterinary sector. Various states have enacted broad Business and Insurance regulations prohibiting referral arrangements that result in the offer or acceptance of any rebate, refund, commission, discount, or other consideration as compensation or inducement for referring patients, clients or customers. These prohibitions often encompass all health care related professions, including pharmacy and veterinary pharmacy practice. Penalties for violations of these State specific anti-kickback equivalents often include imprisonment in addition to substantial fines.

Veterinary compounders are strongly urged to perform in-depth anti-kickback analyses in those states in which they do business. Frier Levitt has extensive experience reviewing and analyzing referral arrangements and their permissibility throughout the country, and can help you ensure compliance with all necessary statutes, rules and regulations. Contact us today to speak to one of our attorneys.