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Healthcare Compliance: Providers Must Use Plans They Have in Place

medical practice complianceBy: Jacqueline Bain

In 2015, Assistant Attorney General Leslie Caldwell spoke publicly about the importance for every healthcare provider to not only have a compliance program on its shelf, but also being sure that the compliance program is “tailored to the unique needs, risks and structure of each business or industry.” Assistant Attorney General Caldwell explained, “the adequacy of a compliance program is a factor when [the DOJ] decide[s] how and whether to prosecute a company.  The lack or insufficiency of a compliance program can have real consequences for a company when a violation of law is discovered.”

What’s the risk?

On the shelf compliance plans open the business, its owners and employees up to criminal penalties when not effectively used in a healthcare business. In 2013, a Federal Court affirmed a guilty jury verdict that an Alabama pharmacy owner paid money to marketers in exchange for those marketers referring Medicaid patients to the pharmacy to increase the pharmacy’s profits in violation of the Federal Anti-Kickback Statute. See US v. Vernon, 723 F.3d 1234 (11th Cir. 2013). The defendant appealed, stating that the evidence failed to show the required referral and willfulness elements of the charged crime. The appellate court held that the willfulness elements was achieved because the pharmacy’s own compliance plan advised its owners and employees:

(1) that all employees shall comply with anti-kickback laws;

(2) the federal anti-kickback laws are written to prevent pharmacy personnel and representatives from knowingly and willfully paying or receiving any money directly or indirectly from third parties in connection with items or services billed to federal programs; and

(3) all personnel and representatives must be aware the payment may be unlawful even if the only purpose of a payment scheme is to influence referrals.

Other Examples

More recently, the Federal Government settled with pharmaceutical manufacturer Teva Pharmaceuticals for nearly $300,000,000 when its executives “intentionally failed to institute a system of internal controls” to ensure compliance with applicable laws. Even further, “Teva executives approved policies and procedures that they knew were not sufficient to meet the risks posed by Teva’s business,” the DOJ stated when announcing the settlement.


When is the last time you really looked at your compliance program? When the last time anyone made a report to you that is something in your business might be amiss? When have you taken the time to examine whether your business is in compliance with ever-changing and increasingly confusing health care laws? The time is now.