Tech Perks as Kickbacks? ASD Specialty Healthcare Agrees To Pay $1.67 Million for Giving Free Software Access To Select Retina Practices

On December 13, 2024, ASD Specialty Healthcare (d/b/a Besse Medical) (ASD) agreed to pay $1.67 million to resolve allegations that it provided free inventory management software to retina practices to induce them to purchase drugs from ASD, in violation of the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b) (AKS). The AKS prohibits the knowing and willful payment of “remuneration” to induce or reward referrals or the generation of business involving any item or service payable by federal healthcare programs such as Medicare.

ASD is a Texas-based company that distributes pharmaceutical products, including ophthalmological injections, to physicians and medical practices across the United States. In May 2017, ASD acquired an inventory management system for retina practices known as PODIS. PODIS is specially designed to manage inventory of, and reimbursement for, high-cost injectable medications, such as ASD’s products used to treat wet age-related macular degeneration. After ASD acquired PODIS, it provided the system at no cost to physician practices, but only to certain customers on the condition that they enter into “prime vendor agreements,” which required the practices to purchase a specified percentage of their specialty drugs from ASD. Customers who purchased products from ASD but did not enter into prime vendor agreements could access PODIS, but ASD required them to pay a monthly fee to do so. ASD discontinued PODIS access to non-customers, even those that offered to pay a monthly fee to continue using the system.

The relator’s initial complaint was filed on July 28, 2020, and DOJ filed a complaint in intervention on March 28, 2024. DOJ contends that ASD’s practice of offering differential access to PODIS based on ordering patterns violated the AKS and constituted a knowing and willful attempt to induce retina practices to order drugs from ASD. DOJ further contends that the AKS violations caused physicians to submit false claims to Medicare, TRICARE, and the Department of Veterans Affairs in violation of the False Claims Act. In resolving this case, ASD admitted and accepted responsibility for certain facts, as articulated in the settlement agreement.

Though the value of ASD’s settlement was relatively small, this case serves as a reminder of DOJ’s interest in pursuing healthcare companies for offering or providing items or services of value in exchange for ordering products or services — such as software services in this case. The AKS is extremely broad, and healthcare providers and pharmaceutical and medical device manufacturers must vigilantly monitor their financial relationships and contracts. This case highlights the risks of providing software or other technologies to healthcare providers at no cost or reduced cost. With the rapid proliferation of technology in healthcare, such as AI, businesses should remain alert to the risk that complimentary access to technologies and data may be considered a kickback.

© Arnold & Porter Kaye Scholer LLP 2025 All Rights Reserved. This Blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.