Are the holiday baskets really worth the risk?

From international law firm Arnold & Porter LLP comes a timely column that provides views on current regulatory and legislative topics that weigh on the minds of today’s physicians and health care executives.The recent report of a settlement between a large physician practice and the Office of Inspector General (OIG) of HHS reminds us once again that providing perks, even seemingly insignificant perks, to referral sources can be problematic and costly to physicians and physician practices. According to the posting on the OIG website, the practice self-disclosed certain payments made to referral sources and agreed to pay $50,000 for allegedly violating the Civil Monetary Penalties Law provisions applicable to physician self-referrals and kickbacks. OIG alleged that the practice provided improper remuneration in the form of holiday gifts, consisting primarily of candy and other small food items, to physicians and physician practices who were referral sources. While the government apparently did not take action under the federal Anti-Kickback Statute or the Stark Law in this case, gifts to referral sources also may trigger liability under these provisions and can give rise to issues under the False Claims Act, all of which carry the possibility of very significant penalties, including criminal penalties, against the entity providing the gifts as well as the recipient of the gifts.