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Compensation for referrals?

December 11, 2012

Question:

Dear Jennifer,

I am an established practitioner in my community and I was approached by a supply company that wants to pay me for making introductions.  Is this kosher?

Dr. H

Answer:

This situation is pretty much the definition of a "kick-back", which is a prohibited arrangement.   Getting paid for influencing care, which a government agency would interpret this situation as doing, is explicitly what the Federal Anti-Kickback Statute was created to prevent.  Because you would be recommending other doctors to send their patients to a certain company for supplies, and it sounds like you would be compensated per referral, the more you refer the more you get paid, which incentivizes you to steer referral sources and patients to this supply company.
 
Now, there are ways that you may provide marketing services, or endorse a company without offending applicable statutes.  The easiest way to explain such circumstances would be an arrangement with a company whereby you are hired for a set salary, that is set out in writing, for a term of not less than 1 year, and the salary is set at fair market value.  Sometimes arrangements provide for "incentive compensation" or regular bonuses, which has not been fooling anyone, and clearly is a way to sneak additional compensation.  The safest way to structure an arrangement where you will be assisting in generating business is a way that is transparent.  Don't try to "pull a fast one" and be compensated "on the side".  Doing so may raise your bank account, but it will also raise your potential liability.  If you have a situation you think may be a kickback arrangement, contact me to discuss.


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