Is French Hospital violating anti-kickback laws?

May 9, 2012

By KAREN VELIE

It sounds like any other incentive for a new company – sign up and get a gift certificate. But San Luis Obispo based French Hospital’s promotion for its new Women’s Health and Imaging Center could violate federal anti-kickback laws.

French Hospital is offering the gift certificates, valued at $40 each, to the first 200 people who make an appointment for a bone density scan or a mammogram.

But federal anti-kickback statutes 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 (42 USC § 1320a–7b).

A related law, the beneficiary inducement statute, prohibits offers of compensation to federal health care recipients that are likely to influence their choice of a health care services or product providers (42 USC § 1320a–7a(a)(5).

Last month, Walgreens agreed to pay a $7.3 million settlement after several whistleblowers  told federal authorities Walgreens had offered a $25 gift card to anyone who transferred a prescription to its pharmacies.

Even though Walgreens advertisements promoting the gift cards acknowledged that the offer was not valid for recipients of federal health care programs, its employees frequently ignored the stated exemptions, according to a Department of Justice press release.

French Hospital is offering its gift certificates regardless of whether they are a recipients of a federal health care program, because the gift cards are not meant to entice people to make an appointment, French Hospital spokesperson Megan Maloney said.

“It is not an enticement,” Maloney said. “It is just a thank you and to celebrate our grand opening.”

In addition to advertising its “May promotion” in the SLO City News, French also posted information about its offer on its website.

“In honor of the grand opening, and in honor of Mother’s Day, anyone who schedules an appointment during the month of May will receive a free pedicure (limit 200) from the Bladerunner Spa and Salon in San Luis Obispo,” the website says. “Pedicure certificates will be issued at time of appointment. Their name will also be entered to win an ultimate Spa Package from the Bladerunner as well.”