The Fraud Spotlight series is a long-form examination of current fraud trends and investigative strategies from our team of retired OIG agents and expert fraud investigators. Stay tuned for weekly insights, updates, and information on healthcare’s most expensive crimes.

A couple of weeks ago, the OIG issued a Special Fraud Alert regarding the use of speaker programs in the device and pharmaceutical industry. This is not a new fraud scheme, and the OIG has had opinions on similar issues as it relates to violations of the Anti-kickback Statute (AKS) for many years.

The biggest concerns that arise out of any matter was the potential AKS violation is the clouding of the medical judgment of the prescribing or ordering physician, as well as the potential for the prescribing or ordering of medically unnecessary items, services, or procedures. As our retired OIG agents have described in previous posts, the ability to broker a Medicare beneficiary for the highest amount of a kickback is a truly hideous act. 

Kickbacks permeate all aspects of the healthcare continuum, from diagnostic and laboratory tests to referrals to specialists. If you work in the fraud, waste, and abuse world of healthcare, you are undoubtedly familiar with cases such as Biodiagnostic Labs Services (BLS), the early device cases involved the “hips and knees” manufacturers, and a slew of cases involving the pharmaceutical industry. Although all of these cases shad their nuances, all had a few things in common.

First and foremost, as we have heard from our OIG agent resources, kickback cases can be difficult to prove in the absence of a cooperating witness. Since someone has “to tell on themselves,” it can be a challenge. It is the availability of a cooperating witness to provide the story behind the payment that creates the jury appeal, explains how the scheme was formulated, and how the kickbacks were paid. 

Not all kickbacks are cash payments made to a provider in a brown paper bag (although our OIG resources tell us about several of these types of cases where that exact scenario played out). Payments can appear to be legitimate payments made for consulting, education and training. In any event, the overt payment that is made publicly (and published to the Open Payments website), may never tell the actual tale, but the cooperating witness can. 

Another common piece is that providers who are receiving these kickbacks, oftentimes are receiving the payments based on volume. Whether it is by the prescription, the hip or knee replacement, the number of tubes of blood to be tested or the number and type of diagnostic service to be performed, the carrot is the volume referrals for the payments. Unfortunately, an unscrupulous provider will sell their soul for even a few dollars. One of our OIG agent resources told us of a situation involving an MRI facility that was paying a doctor for his radiological studies. 

The provider would receive, via cash payment from a cooperating witness (and video recorded as part of the cooperating), as little as $200 a month. Think about that for a second; $200 a month, which would not have even covered the monthly cost for the gasoline on his full-size SUV. This particular provider pleaded guilty, went to federal prison, was excluded from participation in government payor programs, and had his license suspended. All of that for $200 a month, over about a five-year period. In total, a minimal amount of money in comparison to the collateral losses.

Regardless of any particular scheme, it will always be about brokering patients for a price, with little regard as to the appropriate care or the best interests of the patient.

Advize Health LLC is a healthcare advisory and consulting company that provides a breadth of healthcare industry services in the payer, provider, and legal communities. Contact our former OIG and Fraud Investigation team by emailing for more information on our Fraud Spotlight series.