Press Releases
11/01/2023
Attorney General Tong Announces Settlement with Norwich Oncology Practice Over Illegal Rebates
(Hartford, CT) -- Attorney General William Tong today announced a $77,655 settlement with Eastern Connecticut Hematology Oncology Associates, P.C. (ECHO), resolving allegations that the Norwich practice accepted pharmaceutical rebates barred under Medicaid rules.When healthcare providers enroll in the Medicaid program, they must promise not to pay or accept kickbacks, which the federal Anti-Kickback Statute defines as encompassing “any remuneration (including any kickback, bribe, or rebate)” in return for patient referrals or the ordering of any product or service payable by Medicaid. Connecticut state statutes also forbid paying illegal benefits to influence the selection of items or services under state health programs.
In 2022, the United States and several states including Connecticut reached a settlement with pharmaceutical distributor Cardinal Health for alleged violations of the Anti-Kickback Statute. That settlement involved Cardinal’s upfront payments or “prebates” to physician practices that entered into exclusive distribution arrangements with Cardinal. These prebates were made in advance of the physician practices’ purchases of pharmaceuticals from Cardinal, and either were not attributable to identifiable sales of pharmaceutical products or were purported rebates that the physician practices had not actually earned. The purpose of these prebates was to induce the physician practices to purchase pharmaceuticals paid for by federal health care programs from Cardinal, instead of from Cardinal’s competitors, in violation of the Anti-Kickback Statute.
Following that settlement, the Office of the Attorney General conducted further investigation regarding ECHO. The state investigation found that ECHO had accepted $190,357.16 in up-front “prebates” from Cardinal in exchange for a letter of commitment to purchase 95 percent of its branded and generic pharmaceuticals from Cardinal. Some of those pharmaceuticals were used in the care of patients of the Connecticut Medicaid Program as well as health care beneficiaries of the state employee and retiree health programs administered by the Office of State Comptroller.
The state investigation did not find any evidence that patient care was harmed or impacted by the prebate agreement.
“Healthcare providers enrolled in Medicaid are responsible for knowing the rules and following them. The Anti-Kickback Statute exists to protect taxpayer investment in our public healthcare programs,” said Attorney General Tong.
Forensic Fraud Examiner Lisa Bailey and Assistant Attorney General Eric P. Babbs, under the supervision of Deputy Associate Attorney General Gregory K. O’Connell, Chief of the Government Fraud Section, assisted the Attorney General in this matter.
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Media Contact:
Elizabeth Benton
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