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Anti-Kickback Statute

According to 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 harbors:

  • 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

Anti-Kickback Statute Penalties

Though the Anti-Kickback Statute is a criminal statute, 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 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.

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