According to federal law, a kickback is any remuneration, in cash or in kind, directly or indirectly, overtly or covertly, that is paid in return for patient referrals.
In determining whether a payment to a physician or other medical provider is a kickback, the courts use the “One Purpose Test.” Under this test, if “one purpose” is to encourage patient referrals, then it is a kickback.
Even if the physician was being compensated for some service rendered, if one purpose of the payment is to induce referrals, that is considered a kickback.
This can be true for payments made for medical directors or interpreting physicians. If the physician is in position to refer business to the medical provider making the payment, the payment and the relationship may be suspect.
As the courts use this broad interpretation of the definition of kickbacks in health care, the risk of a violation increases.
A kickback can be in many forms. For example, cash in any form including free rent, vacations, meals, and payments for services not actually performed. In certain cases, payments made above market value for services rendered or services that were not necessary have been the basis for prosecution.