Anti-Kickback Statute

The Anti-Kickback Statute (“AKS”) is a criminal law that prohibits the knowing and willful payment of “remuneration” to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal health care programs (e.g. drugs, supplies, or health care services for Medicare or Medicaid patients).

Remuneration includes anything of value and can take many forms, but includes:

  • Cash payments
  • Free rent
  • Expensive hotel stays and meals
  • Excessive compensation for medical directorship or consultancies
  • Discounts for services, supplies or equipment

In some industries, it is acceptable to reward those who refer business to you.  However, in the Federal health care programs, paying for referrals is a crime.  The statute covers the payers of kickbacks – those who offer or pay remuneration – as well as the recipients of the kickbacks – those who solicit of receive remuneration.  Each party’s intent is a key element of their liability under the AKS.

Penalties for violating the AKS can have civil and criminal consequences and include:

  • Fines up to $25,000.00 per violation and up to 5 years in prison for each violation
  • False Claims Act liability
  • Monetary penalties
  • Program exclusion from Federal health care programs and up to $50,000.00 per violation
  • Civil assessments of up to three times the amount of the kickback

Safe harbors protect certain payment and business practices that could otherwise implicate the AKS from criminal and civil prosecution.  To be protected by a safe harbor, an arrangement must fit squarely in the safe harbor and satisfy all of its requirements.  Some safe harbors address personal services and rental agreements, investments in ambulatory surgical centers, any payments to bona fide employees.

As a physician, you are an attractive target for kickback schemes because you can be a source of referrals for fellow physicians or other health care providers and suppliers.  You decide what drugs your patients’ use, which specialists they see, and what health care services and supplies they receive.  Many individuals and companies want your patients’ business and would pay you to send that business their way.  Just as it is illegal for you to take money from providers and suppliers in return for the referral of your Medicare and Medicaid patients, it is illegal for you to pay others to refer their Medicare and Medicaid patients to you.