The Federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)) prohibits physicians, pain management specialists, dentists, pharmacists, or any other healthcare providers from:
“[K]nowingly and willfully solicit[ing] or receiv[ing] any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind … in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program, or … in return for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under a Federal health care program, …”
It stresses the theory that sound medical judgment is compromised when there are financial conflicts of interest, which can lead to the overutilization of medical services — and health care fraud.
If a healthcare provider is using any kind of compensation to coax a patient to use their medical practice, or to persuade another medical provider to refer patients to that practice or medical facility, that is a kickback.
A kickback can be in many forms. For example, cash in any form including meals, travel, vacations, and payments for services that the physician, chiropractor, or other health care provider did not actually perform.
Also, there are certain cases where the basis for prosecution concerned payments that had been above market value for services rendered or that were not necessary.
In addition, if a medical group or hospital provides free or reduced rent to a doctor or medical specialist who agrees to refer patients to that hospital, that’s a kickback.
When a DME or pharmaceutical company gives money or gifts to a physician on the understanding that the physician will refer patients to those manufacturers’ products, that’s a kickback. This applies even if the physician would have otherwise legally ordered the DME or prescribed the medication — because at least one purpose of the illegal payment plan was to induce referrals. (Courts use what’s called the “One Purpose Test” in determining this.)
Under the Anti-Kickback Statute, a medical provider cannot offer financial inducement directly to patients, in order to persuade a patient to go to that provider’s office or facility. In its “A Roadmap for New Physicians” publication, the OIG specifically states that medical providers are prohibited from systematically waiving a Medicaid or Medicare beneficiary’s co-pay.
Meanwhile, when pharmacies opt not to charge patients deductibles or co-pays, or they advertise “no out-of-pocket costs,” they could be violating not only the Anti-Kickback Statute, but also the Civil Monetary Penalties law and the False Claims Act. This is because the pharmacy is adding to the overuse of items and/or products that the federal government pays for.
Although the Anti-Kickback Statute is a criminal statute, violations result in both criminal and civil penalties for both the party making the kickback and party receiving the kickback.
On the criminal side, a medical provider can be hit with up to $25,000 and five years’ imprisonment.
The Office of the Inspector General (“OIG”) for the Department of Health and Human Services (“HHS”) also can pursue civil penalties. Not only can each kickback carry up to $50,000 in fines, the government also can demand up to three times the amount of each kickback.
In addition, the parties could face exclusion or debarment from participation in Medicaid, Medicare, TriCare, and all other federal health benefits programs and plans.
Further, an Anti-Kickback Statute violation can lead to investigations of a False Claim Act violation, putting the parties into deeper Medicare and Medicaid fraud waters.
Yes. Following U.S. Congress’s actions in 1972 to establish anti-kickback laws, each state drafted its own anti-kickback statutes, which every licensed healthcare professional practicing in that state must follow. For example, Michigan has five Anti-Kickback Statutes, while Florida has nine.
Yes. There are currently 28 safe harbors, including:
At Chapman Law Group, our federal criminal defense, healthcare fraud, and healthcare compliance attorneys work with medical professionals nationwide. We make sure any referral relationships are valid and would not lead to exposure or criminal charges under federal anti-kickback laws.
We analyze areas where your practice could fall short in terms of compliance, and whether any activities that may be considered kickbacks are actually in the zone of exemptions or safe harbors. And, by working with defense experts, we can assess the prosecution’s arguments in a kickback trial to find any flaws in the claims.
Our national offices are based in Detroit , Michigan; Miami and Sarasota, Florida; and Los Angeles/Southern California. We serve nationally, from Chicago to Dallas, and from Philadelphia to Seattle. Contact us today to learn more about our healthcare compliance, healthcare fraud, and regulatory services.
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