Anti-Kickback Statute and Checklists

The federal Anti-Kickback Statute prohibits the knowing and willful solicitation, receipt, offer or payment of remuneration to influence, induce, or reward referrals of federal health care program business. Remuneration is interpreted to mean anything of value including, but not limited to, cash payments or waivers of such payments, bribes, rebates, discounts, gifts, credit arrangements, meals and trips. Unlawful remuneration can be made directly or indirectly, overtly or covertly, and in cash or in kind.

Anti-Kickback v. Stark

The Anti-Kickback Statute (“AKS” or “the Statute”) is often confused with the Stark law. The Stark law, which is covered in depth in this guide, prohibits physicians from making referrals of Medicare and Medicaid patients for designated health services to an entity in which the physician has a financial relationship. The Anti-Kickback Statute is a law in its own right, separate and distinct from the Stark law. AKS has a much broader scope than the Stark law in that it applies to anyone or any entity (not just physicians), covers all federal health care programs (not just Medicare and Medicaid), applies to all health care services and devices (not just designated health services) and violations of AKS carries both civil and criminal fines and penalties (not just civil).

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Anti-Kickback and the Affordable Care Act

Before the passage of the Affordable Care Act (“ACA”), cases prosecuted under the Statute typically hinged upon whether or not a party knowingly and willfully violated AKS. However, the ACA drastically changed prosecution under the Statute, because it modified this so-called intent requirement by adding a provision to the Statute that states that a person need not have actual knowledge of the AKS or a specific intent to commit a violation of the AKS in order to be held liable under the Statute. The government still has to prove that a party knew that an arrangement was wrongful, but it does not have to prove that the party knew the arrangement was wrong under AKS. The ACA also enhanced prosecution under AKS with the addition of a provision to the Statute which makes a claim submitted to the government that includes items or services that violate AKS a false or fraudulent claim under the federal Civil False Claims Act (“CFCA”).

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Penalties for Violating the Statute

Violation of the Anti-Kickback Statute could result in serious civil and criminal penalties. Under AKS, a person or entity that violates the Statute is guilty of a felony, and upon conviction may be fined up to $25,000 and/or may be imprisoned for up to five years. Violations of the Statute may also result in exclusion from participation in Medicare, Medicaid, and other federal health care programs. Because a violation also implicates the CFCA, an additional civil monetary penalty of up to $50,000 per violation, plus an assessment of three times the amount of any damages the federal government sustains as a result of unlawful kickbacks may be assessed.

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Anti-Kickback Statute Safe Harbors

The Anti-Kickback statute is very broad, and as written includes many practices that are considered generally acceptable in non-healthcare business settings, such as the provision of incentives or rewards that serve to generate business. The federal government recognizes and understands that not all programs and practices that may result in federal health care program business constitute fraud, waste and abuse. Accordingly, the government has established twenty five safe harbors that protect specific business practices and relationships from prosecution under the Statute. Several of these are particularly useful to office-based practices, such as the referral services, referral arrangements for specialty services, investments in group practices, group purchasing organizations, obstetrical malpractice insurance subsidies in underserved areas, practitioner recruitment, and sale of practice safe harbors.

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Anti-Kickback Statute Safe Harbor Checklists: Appendix B

Click the links below to view the appendix contents:

1. Referral Services
2. Referral Arrangements for Specialty Services
3. Investments in Group Practices
4. Group Purchasing Organizations
5. Obstetrical Malpractice Insurance Subsidies in Underserved Areas
6. Sale of Practice
7. Practitioner Recruitment