When it was flu season, several grocery stores offered gift cards that could be used on groceries by people who got their flu shot at the store’s pharmacy. A hospital is currently offering a gift certificate to a spa and salon for people who get a mammogram. Are these incentives a form of “kickback”?
It isn’t unheard of for a retail store to offer have a deal where a person buys a certain amount of product in order to get something for free. Sometimes, it is to get a free gift card, or other types of “credit” with the store. Obviously, this is designed to encourage shoppers to come back, and spend more money.
There isn’t anything wrong with stores doing this, however, things get a bit sticky when health care providers start offering the same types of incentives. Often, the health care providers are doing it to encourage people to get a screening or an inoculation. Sometimes, the form of incentive can help alleviate the cost of the health care treatment.
The problem comes when an incentive is offered to someone who has health insurance. It might be a violation of federal anti-kickback laws. Those statues “prohibit any person or entity from knowingly offering to pay cash or gift certificates in order to entice someone to purchase its products or services in which at least a portion of payment is covered by a federal health care program”.
In short, this is how Walgreens got into trouble. Walgreens was offering a $25 gift card to anyone who transferred a prescription to a Walgreens pharmacy. Their ads stated that the offer was not valid for recipients of federal health care programs (such as Medicare), but, store employees were ignoring that exemption and handing out the gift cards to people who they were not allowed to give them to. Walgreens has to pay $7.3 million settlement.
French Hospital, which is located in California, is offering gift certificates that are valued at $40 to the first 200 people who make an appointment for a bone density scan or mammogram at their new Women’s Health and Imaging Center. Could this violate anti-kickback laws?
It is kind of hard to say. The hospital says that the gift certificates are not to entice people to make an appointment. Instead, they are a way of celebrating the opening of the Women’s Health and Imaging Center. There is potential that some of the women who make appointments for bone density scans or mammograms could be using Medicare, or another public health care program. It seems like the definition of “kickback” is a bit fuzzy in certain situations.
Image by Julien GONG Min on Flickr