By: Christopher A. Parrella, Esq., CPC, CHC, CPCO

Parrella Health Law, Boston Ma.

A Health Law Defense and Compliance Firm

Exact Sciences Corp. (ESC) and its subsidiary, Exact Sciences Laboratories LLC (ESL), recently agreed to a $13.75 million settlement with the U.S. Department of Justice (DOJ) over allegations tied to their colon cancer screening test, Cologuard. The case, sparked by whistleblower claims, centered around accusations that the company provided gift cards as inducements to patients for completing the Cologuard test, an action purportedly in violation of the Anti-Kickback Statute (AKS). This settlement is particularly noteworthy as it unfolds in the wake of a favorable advisory opinion from the HHS Office of Inspector General (OIG), suggesting a complex landscape for healthcare compliance.

The whistleblower, a retired Florida physician, contended that between April 1, 2015, and October 31, 2020, Exact Sciences offered prepaid Visa gift cards and Super Certificates, valued between $10 and $75, as incentives for patients to complete the Cologuard test. These incentives were allegedly used to induce patients into utilizing Cologuard, with the subsequent claims to Medicare and TRICARE considered tainted under the AKS, thus violating the False Claims Act (FCA).

The situation is muddied by the OIG’s advisory opinion issued seven months prior to the settlement, which examined a similar arrangement and deemed it to have a “minimal risk of fraud and abuse” under the AKS, specifically within the context of preventive care. This advisory opinion had raised questions about the sequence of events and the safeguards in place at the time of the whistleblower’s allegations.

The divergence between the OIG’s advisory opinion and the DOJ’s subsequent settlement raises important considerations for healthcare providers and companies. It underscores the importance of thorough due diligence and compliance when implementing patient incentive programs. While the OIG’s advisory opinions can offer valuable guidance, they’re based on the specifics of each request and the representations made by the requestor. It’s essential for healthcare entities to ensure that all relevant facts are disclosed and that compliance programs are robust enough to adapt to evolving regulatory interpretations and enforcement actions.

At Parrella Health Law, we understand the nuances of navigating healthcare compliance and the AKS. The Exact Sciences case exemplifies the challenges healthcare entities face in balancing patient engagement strategies with compliance mandates. Our firm is poised to assist healthcare organizations in developing and reviewing patient incentive programs, ensuring they align with current legal and regulatory standards while advancing patient care objectives. For healthcare providers seeking to navigate this intricate regulatory environment or to understand the implications of recent enforcement actions on their practices, Parrella Health Law offers expert guidance and support. Please call us at 857-328-0382 or email me at cparrella@parrellahealthlaw.com.

Christopher Parrella, ESQ, CPC, CHC, CPCO, is the founding partner of Parrella Health Law in Boston, Mass. The firm focuses exclusively on healthcare defense and compliance matters. Chris also travels the country on behalf of a wide range of healthcare organizations, lecturing on a variety of health care enforcement and compliance topics. Chris is one of a handful of health care attorney’s that are also Certified Professional Coders (CPC) and is a member of the AAPC’s National Legal Advisory Board and Ethics Committee.  He is also a Certified Professional Compliance Officer (CPCO) and Certified in Health Care Compliance (CHC.)