Provided by: Jennifer Kirschenbaum, Esq
May 25, 2022
A vendor I buy supplies from is offering a rebate to me. Is taking the rebate a prohibited kickback?
If it looks like a duck and quacks like a duck and walks like a dug it may not be a kickback... The Federal government has carved out how to avoid a violation of a kickback when buying from a manufacturer if you adhere to the following guidelines:
- "In the case of a discount, it must occur concurrently with the sale or, in the case of a rebate, it must be fixed and given to the buyer concurrently with the first sale;
- The discount must apply to the same type of good or services, rather than tied to the purchase of a different good or service; and
- If the buyer submits a claim, the Secretary of the U.S. Department of Health and Human Services or a state agency may request the seller’s information, detailed below." 42 U.S.C. § 1320a-7b
Further, to avoid, you must adhere to the following to avoid violating the AKS:
- When the seller submits a claim or request for payment to Medicare or a state health care program for the buyer and the service or good is claimed individually, the seller has to report the discount on the claim or request fully and correctly; or
- When the buyer submits a claim, the seller has to (i) report the discount on the invoice, coupon or statement given to the buyer, (ii) notify the buyer of the reporting requirements and (iii) refrain from taking action that would prevent the buyer from reporting the discount correctly. 42 U.S.C. § 1320a-7b
Violation of the Anti-kickback statute is severe - Fines and penalties for violating the Statute can reach $25,000 per claim, imprisonment for five years, and a ban from joining federal healthcare programs.
Always have a contract reviewed prior to signing.