Healthcare Compliance Perspective:
Light meals may be offered in conjunction with specific, educational, purposeful events, however meals can never be provided in exchange for referrals or with the hope of obtaining referrals. Meals that are exuberant suggest that the main attraction is the meal, not the discussion on the educational topic, which therefore appears to encourage kickbacks.
A Massachusetts medical equipment manufacturer has agreed to pay $3.1 million to resolve kickback allegations that it violated the False Claims Act by purchasing lavish meals for physicians to induce them to use their line of heart pumps.
The federal government contends that the company tried to induce physicians to use its heart pumps, that each cost more than $20,000, by purchasing lavish meals for them at some of the country’s most expensive restaurants. The restaurants included Menton in Boston, Nobu in Los Angeles, Spago in Beverly Hills and Eleven Madison Park in New York City. The inducements paid covered not just the meals of physicians attending the dinners under the guise of conducting business discussions; but also, included paying for the meals of spouses who had no legitimate purpose for attending the meal.
Included in the inducement were exorbitant costs for alcohol and expending dollars to pay for persons not even attending (one instance the cost per attendee was over $450). This exaggeration in the number of persons attending had the effect of making the true per-attendee cost appear lower.
The announced settlement stems from a complaint filed by a former employee of the manufacturer under the whistleblower provisions of the False Claims Act, authorizing private parties to sue on behalf of the United States and to receive a portion of any recovery. The whistleblower will receive $542,500 of the settlement.
