Norwich Oncology Practice Settles In Illegal Rebates Case: AG

NORWICH, CT — A Norwich oncology practice came to a $77,655 settlement with the state over allegations that it accepted pharmaceutical rebates barred under Medicaid rules, according to a statement from Attorney General William Tong.

The practice involved in the case is Eastern Connecticut Hematology Oncology Associates.

According to prosecutors, healthcare providers enrolled in Medicaid must abide by the federal Anti-Kickback Statute. This law states that the practice must not provide “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 was one of several states that reached a settlement with pharmaceutical distributor Cardinal Health for alleged violations of the Anti-Kickback Statute in 2022. Cardinal was accused of including upfront payments, or "prebates," to physician practices that entered into exclusive distribution arrangements with them.

The prebates were intended to induce practices into buying pharmaceuticals paid for by federal health care programs from Cardinal instead of their competitors.

A state investigation found that Eastern Connecticut Hematology Oncology Associates accepted $190,357.16 in up-front prebates from Cardinal in exchange for a letter of commitment to purchase 95 percent of its pharmaceuticals from Cardinal, according to prosecutors.

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,” Tong said in a statement.