OIG Says Manufacturer’s Proposal Raises Kickback Concerns

WASHINGTON–A proposal by a DME manufacturer to provide
advertising assistance and reimbursement consulting for suppliers
could lead to illegal kickbacks, according to the HHS Office of
Inspector General.

In an advisory opinion issued Tuesday, the OIG said the proposal
by the manufacturer, whose name was redacted by the agency, “would
constitute remuneration to the DME suppliers. Because the DME
suppliers are in a position to generate federal health care program
business for [the manufacturer], the proposed arrangement clearly
implicates the anti-kickback statute.”

Under the proposal, the manufacturer would provide free
advertising for suppliers or underwriting for advertising expenses.
The manufacturer might reimburse a supplier for advertising it had
developed on its own, or the manufacturer could develop its own
advertising, featuring the manufacturer’s products and a toll-free
number operated by the manufacturer.

The consulting services provided by the manufacturer would
include claims reviews, claims appeals and assistance with
assessing and documenting patients’ medical needs for certain
equipment.

“The proposed arrangement would give DME suppliers an incentive
to steer patients to [the manufacturer’s] products even if products
from other manufacturers were less expensive or more appropriate,”
the OIG said, adding that the proposal could amount to unfair
competition.