An oncology physician practice who did business with Cardinal Health paid the United States and the State of Michigan agreed to pay $1 million to resolve allegations that the practice accepted kickbacks from Cardinal in connection with the purchase of specialty pharmaceutical products from Cardinal. The physician practice was one of several such practices sued along with Cardinal Health. In January 2022, Cardinal Health agreed to pay the United States and the states $13.125 million plus interest to resolve allegations that it induced physician practices such as this one to purchase specialty pharmaceutical products from it by paying customers remuneration in advance of the practice making any drug purchases and not in connection with specific purchases. The practices in turn submitted claims for payment to Medicare and Medicaid programs that were tainted by these kickbacks. Litigation is ongoing as to several other named physician practice defendants.
Under the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), both sides of a kickback arrangement bear liability. It is important to hold both sides of the alleged kickback scheme (here, the payor/Cardinal and the payees/physician practices) accountable. Using the False Claims Act to do so protects the public fisc from paying claims tainted by kickbacks and protects patients. As the U.S. Attorney for the District of Massachusetts said at the time of the Cardinal settlement:
Kickback schemes, such as this one, have the potential to pervert clinical decision-making and are detrimental to our federal health care system and taxpayers.
Special Agent in Charge of the FBI Boston office added at the time: “Kickbacks cost health benefit programs millions of dollars in potentially fraudulent claims.”
Whistleblower Law Collaborative LLC is based in Boston. It devotes its nationwide practice to representing whistleblowers bringing actions under the federal and state False Claims Acts and other whistleblower programs. Under the False Claims Act, a private citizen who knows of fraud against the government can file a sealed complaint on behalf of the government. If the case is successful, the relator is entitled to a share of the government’s recovery. Among the firm’s many successes is the government’s $885 million settlement with AmerisourceBergen, another pharmaceutical drug wholesaler, for illegal repackaging of injectable drugs into pre-filled syringes.