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Falsely Claims of Nonprofit

Discussion in 'Ask a Whistleblower Attorney' started by anonymous, Sep 11, 2020 at 12:31 AM.

  1. anonymous

    anonymous Guest

    Is it fraud for a business to falsely claim they are nonprofit on their website/ marketing materials?
    There is medical certification company falsely claiming they are nonprofit.
    The company also pays healthcare professionals for referring new members under the table.
    The owner also owns a drug compounding pharmacy which is for profit, is that conflict of interest?
    Is this illegal?

  2. anonymous

    anonymous Guest

    It's difficult to weigh in on the nonprofit situation without a more fact specific inquiry, but there could certainly be ramifications if they are misrepresenting their nonprofit status to government entities and/or tax authorities. The other issues you referenced may give rise to issues under the Stark Law/Anti-Kickback Statue.

    The Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), extends to all medical providers in a position to arrange or recommend medical services. “Referrals” under the Anti-Kickback Statute include “any item or service for which payment may be made in whole or in part under a Federal health care program.” While the Anti-Kickback Statute covers a broad range of activity, it also requires a showing of an “intent to induce referrals.” Claims for payment submitted to Medicare or Medicaid that include items or services resulting from a violation of the Anti-Kickback Statute are deemed to be false claims under the False Claims Act, even if the defendant did not have the specific intent to commit a violation of the Anti-Kickback Statute.

    Therefore, providers may not argue that they did not know they were violating the FCA because they were not aware the Anti-Kickback Statute existed. Our law firm has compiled a list of informational resources relating to the Anti-Kickback Statute that may be of interest to you: https://constantinecannon.com/practice/whistleblower/whistleblower-types/healthcare-fraud/anti-kickback-stark/.

    The information contained herein is for informational purposes only and is not legal advice or a substitute for legal counsel. Online readers should not act upon this information without seeking professional counsel. If you would like more information, or would like to speak to a member of Constantine Cannon’s whistleblower lawyer team, please contact us for a Confidential Consultation: https://constantinecannon.com/practice/whistleblower/team/.