31 what is remuneration another uncertainty lies in

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31 What Is “Remuneration”? Another uncertainty lies in the meaning of remuneration . The AKS merely hints at a definition. The passage quoted earlier indicates that remuneration includes kickbacks, bribes, and rebates. And a later paragraph states that remuneration “includes the waiver of coinsurance and deductible amounts . . . and transfers of items or services for free or for other than fair market value.” 32 The same section (as amended by the ACA) then lists a number of arrangements that are not considered remuneration: The statutory exceptions described earlier Certain waivers and differentials of coinsurance and deductibles Incentives for preventive care Retailers’ coupons available to the general public Certain items or services provided to persons in financial need Waivers of first copayments under a Medicare prescription drug plan “Other remuneration which promotes access to care and poses a low risk of harm to patients” Lacking a precise definition from which to work, the courts are left to divine the AKS’s import and apply this indistinct concept to real-life situations. Hanlester Network v. Shalala was one of those instances. 33 Certain physicians were limited partners in a network of clinical laboratories to which they referred their patients. The network contracted with Smith Kline Bio-Science Laboratories (SKBL) to manage the laboratory facilities for a fee of $15,000 per month or 80 percent of the laboratories’ collections, whichever was greater. (The 80 percent figure was usually higher than the fixed monthly Legal DecisionPoint Before reading further, determine where the kickback and the referral are in the Hanlester scenario. Refer to Exhibit 13.4. EBSCOhost - printed on 4/7/2021 12:36 PM via UNIV OF LOUISIANA AT LAFAYETTE. All use subject to
445 Chapter 13: Fraud Laws and Corporate Compliance fee.) Because performing the tests at SKBL’s own laboratories was more eco- nomical, 85 percent to 90 percent of the Hanlester labs’ testing was done at the main SKBL lab rather than at the network’s satellite facilities. The Ninth Circuit held that even though the cash payments under the arrangement flowed from the Hanlester Network labs to SKBL, the arrange- ment was a scheme by which SKBL offered a 20 percent discount—the prohibited kickback/remuneration—for the physicians’ referrals. In other words, but for the existence of the Hanlester Network, SKBL would have received 100 percent of the lab fees and the physicians would not have earned their 20 percent share. (Today the arrangement would also violate the physi- cian self-referral laws, discussed later in this chapter.) Although the AKS statute and regulations do not define remunera- tion , the law clearly applies to the provision of anything that has a value. The 20 percent “discount” in Hanleste r is one example. Likewise, the provision of free goods or services has an economic value and is prohibited.

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