Anti-Kickback Statute [42 U.S.C. § 1320a-7b(b)]

The healthcare industry operates a complex design but is there for a patient’s well-being and maintains the integrity of federal healthcare programs. Among these regulations, the Anti-Kickback Statute (AKS) stands as a critical safeguard against improper financial relationships that can influence medical decision-making and inflate healthcare costs. This statute, codified at 42 U.S.C. § 1320a-7b(b), prohibits the knowing and willful exchange of remuneration to induce or reward referrals for services or items paid for by federal healthcare programs like Medicare, Medicaid, and TRICARE. Understanding the nuances of the AKS is paramount for healthcare providers, as violations can lead to severe penalties, including substantial fines, exclusion from federal healthcare programs, and even criminal prosecution.

At KAASS LAW, we recognize the complexities of the AKS and its potential impact on healthcare practices. This blog post aims to provide a comprehensive overview of the statute, its implications, and the importance of seeking experienced legal counsel to ensure compliance.

Anti-Kickback Statute 42 US Code Section 1320a-7b(b)

According to the Anti-Kickback Statute 42 US Code Section 1320A-7B(B), it is prohibited to knowingly and willfully offer, solicit, pay, or receive anything of value which create any type of reward for referring patients to, recommending or arranging any type of purchase that falls under the payment made by health care benefit programs.

The statute covers both the payers of kickbacks-those who pay or offer remuneration and the recipients of kickbacks-those who receive or solicit remuneration.

Examples of Illegal Remuneration:

Illegal remuneration includes anything of value and can take many forms besides cash, such as:

• Expensive hotel stays and meals free rent
• Compensation for medical consultancies or directorships.
• Bribes
• Rebate
• Gifts
• Below market rent or lease agreements
• Discounts
• Services or equipment provided at below the market price

Safe Harbor

There are safe harbor regulations that protect certain payment and business practices that could otherwise implicate the Anti-Kickback Statute from criminal and civil prosecution. The safe harbor regulations put definitions of these practices to make them lawful for medical providers. The regulations must be exactly met with no exceptions to qualify for safe harbor protection.

Some Examples of Safe Harbor Regulations:

• Certain discounts and price reductions
• Employment relationships
• Fair market value compensation
• Group purchasing arrangements and organizations
• In-office ancillary services
• Incidental benefits
• Isolated transactions
• Non-monetary compensation
• Personal service arrangements
• Physician services

Kickbacks in Health Care Can Lead To:

• Overutilization
• Increased program costs
• Corruption of medical decision making
• Patient steering
• Unfair competition

Penalty

The Anti-Kickback Statute is a criminal statute and it provides both civil and criminal penalties for violations.

The criminal penalties are the following:

• A fine of up to $25,000
• Five years in federal prison

Additionally, the Office of the Inspector General for the Department of Health and Human Services can pursue:

• False Claims Act liability
• Civil penalties of up to $50,000 for a violation
• Three times the amount of any government overpayment.

Sometimes penalties for Anti-Kickback violations also include a period of debarment or exclusion from participation in Medicaid, Medicare, and all other federal programs which provide health benefits.

Differences Between the Anti-Kickback Statute and the Stark Law

Anti-Kickback Statute and the Stark Law are the two main federal statutes that deal with remuneration related to improper referrals. Though the two laws are similar, there are several differences between the Stark Law and the Anti-Kickback Statute.

• Anti-Kickback Statute includes both criminal and civil penalties when the Stark Law is exclusively a civil enforcement statute.
• Anti-Kickback Statute applies to Medicare and any other federal healthcare program when the Stark Law applies only to Designate Health Services paid for by Medicare.
• Anti-Kickback Statute applies to any referral source when a violation of the Stark Law involves a relationship between and an entity and a physician.
• For violating the Anti-Kickback Statute the element of intent must be present when the Stark Law is a strict liability statute.

The Importance of Compliance and Legal Counsel:

Given the complexity and severity of the AKS, healthcare providers must prioritize compliance. This includes:

• Developing and Implementing Compliance Programs: Establishing internal policies and procedures to ensure adherence to the AKS and other healthcare regulations.
• Conducting Regular Audits: Reviewing existing arrangements to identify potential AKS risks and address any compliance gaps.
• Seeking Legal Counsel: Consulting with experienced healthcare attorneys to analyze proposed arrangements and ensure they comply with the AKS.

Contact Us

At KAASS LAW, we understand AKS and its implications for healthcare providers. We can assist you with:

• Analyzing existing arrangements: Reviewing your current business relationships to identify potential AKS risks.
• Structuring new arrangements: Advising you on how to structure new ventures and agreements to comply with the AKS.
• Developing compliance programs: Helping you create and implement effective compliance programs to minimize your risk of AKS violations.
• Defending against AKS allegations: Providing aggressive and experienced representation if you are facing allegations of AKS violations.

Navigating the complexities of the AKS requires careful planning and expert legal guidance. Don’t wait until you are facing an investigation or enforcement action.

Additionally, we also can help victims from Federal Health Care Fraud as well.

Contact KAASS LAW today for a confidential consultation to discuss your compliance needs and protect your practice.