Pharmacy Payment to Marketers Based on Number of Patients leads to Civil and Criminal Settlement

The US Department of Justice reached a settlement with a Kansas-based supplier of mail-order diabetic supplies to resolve allegations of submission of false claims to federal healthcare programs. The settlement requires that the defendants pay a total of $13-million to federal government. The US attorney alleged that the individual owners of Global Medical, Inc. entered into numerous marketing contracts with insurance brokerage and other companies with customer bases likely to have a high percentage of diabetes patients. The pharmacy paid these marketing companies based on the number of patients referred for diabetic supplies. Thus, payments to the marketers varied with the volume or value of referrals in violation of federal and state law.  The US attorney alleged that the payments made under the marketing contracts violated the Anti-Kickback Statute.

Frier Levitt consistently advises clients on the propriety of pharmacy compensation models as well as the federal “Safe Harbors.” Contact us for advice on whether your pharmacy is properly compensating marketers under federal and state law.