What's Happening?
The U.S. Attorney’s Office for the Eastern District of North Carolina has announced the convictions of two health care executives involved in a kickback scheme using gift cards to incentivize Medicaid patients. Life Touch, LLC, a provider of substance use disorder treatment services, distributed over $1 million in gift cards to patients between 2018 and 2023, violating the federal Anti-Kickback Statute. Despite warnings from auditors, Life Touch continued the scheme, falsely attributing the gift cards to nonprofit organizations created by the executives’ family members. The scheme extended to laboratory services, with Life Touch billing Medicaid over $2.5 million for drug testing services and receiving kickbacks from lab proceeds.
Why It's Important?
This case highlights the legal risks associated with patient incentive programs that violate federal statutes. The convictions serve as a cautionary tale for health care entities, emphasizing the need for compliance with the Anti-Kickback Statute and the Eliminating Kickbacks in Recovery Act. Patient incentives can be effective but must be carefully structured to avoid legal violations. The case underscores the importance of adhering to Office of Inspector General guidance and structuring incentives to minimize risk and ensure compliance.
Beyond the Headlines
The case illustrates the complexities of structuring patient incentives within legal boundaries. The Office of Inspector General has issued favorable advisory opinions on patient incentives, emphasizing the need for evidence-based treatment programs and low-value incentives to minimize risk. Health care entities must navigate these guidelines carefully to avoid legal repercussions while effectively motivating patients.
