Anti-Kickback Attorneys

The Anti-Kickback Statute (“AKS”) arose out of Congressional concern that payoffs to those who can influence healthcare decisions will result in medical care that is medically inappropriate, unnecessary, of poor quality, or harmful to vulnerable patient populations. To protect the integrity of federally-funded healthcare programs from these harms, Congress enacted a prohibition against the payment of kickbacks in any form.

Nolan Auerbach & White are experienced Healthcare Fraud Attorneys helping courageous whistleblowers.

The AKS 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 healthcare programs (e.g., drugs, supplies, or healthcare services for Medicare or Medicaid patients or any federally funded healthcare program). Intent can be shown if there is deliberate ignorance or reckless disregard of the truth. Remuneration includes anything of value and can take many forms besides cash, such as excessive compensation for medical directorships or consultancies, free rent, and expensive hotel stays and meals.

The Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), prohibits any person or entity from making or accepting payment to induce or reward any person for referring, recommending, or arranging for the purchase of any item for which payment may be made under a federally-funded healthcare program. The statute not only prohibits outright bribes, but also prohibits offering inducements or remuneration that has as one of its purposes, the inducement of a healthcare provider to refer patients for services or products reimbursed by a federal healthcare program. The statute ascribes liability to both sides of an impermissible kickback relationship. Illegal remuneration includes cash, rebates, gifts, above- or below-market rent or lease arrangements, discounts, free services or equipment, and generally anything else of value.

The Department of Health and Human Services has promulgated safe harbor regulations that define practices that are not subject to the Anti-Kickback Statute. Safe harbors certain payment and business practices that could otherwise implicate the AKS but only if the arrangement fits squarely in the safe harbor and satisfy all of its requirements. Some of these regulatory safe harbors include rental agreements, personal services, investments in ambulatory surgical centers, and payments to bona fide employees. Space and equipment rental safe harbors apply to payments made to a lessor for the use of the premises or equipment as long as “the lease is intended to provide the lessee with access for periodic intervals of time” with schedules, intervals and costs expressly stated in the lease, the rental charge is consistent with fair market value in arms-length transactions and is not determined in a manner that takes into account the volume or value of any referrals or business otherwise generated between the parties.

A physician can be an attractive target for kickback schemes because they can be a source of referrals and prescriptions. They can be solicited by pharmaceutical manufacturers, durable medical equipment suppliers, hospitals, and other providers.  Kickbacks in healthcare can lead to overutilization, patient harm, and increased program costs.

Compliance with the Anti-Kickback Statute is a precondition to participation as a healthcare provider under the Medicare, Medicaid, TRICARE (formerly known as CHAMPUS), CHAMPVA, Federal Employee Health Benefit Program, and other federal healthcare programs. Accordingly, claims for reimbursement for inpatient or outpatient services under these programs that are the result of referrals tainted by kickbacks (or violations of the Stark law), are false claims.

Private citizens may bring qui tam actions alleging violations of the Anti-Kickback Statute as part of an FCA lawsuit. Congress explicitly encouraged such qui tam actions in 2010, when Congress included a provision in the Affordable Care Act that clarified that all AKS-violative claims run afoul of the False Claims Act. Moreover, while the Anti-Kickback Statute requires the government and/or relators to show that the party “knowingly and willfully” engaged in the prohibited conduct, the Affordable Care Act also included an amendment clarifying that they need not show that the defendant had the specific intent to commit a violation of the Anti-Kickback Statute.

Kathleen Hawkins

Dignity Health
$37 million

Kathleen Hawkins, RN MSN, had been employed by Defendant, Catholic Healthcare West (CHW) for approximately 6 years when she decided she had had enough of trying to change the hospital system from within.

CHW, a California not-for-profit corporation that operated hospitals in California, Arizona, and Nevada, was at the time the eighth largest hospital system in the nation and the largest not-for-profit hospital provider in California.


Joe Strom

Johnson & Johnson
$184 Million

Joe Strom contacted us in 2005. We were very grateful that he did. We immediately formed an all-star legal team and a process to stop a very harmful pharmaceutical marketing strategy. It was this process we set into motion that ultimately returned hundreds of millions of dollars to the U.S. Treasury, and a portion of that, very well-deserved, into Joe’s bank account.

Joe told us a very troubling story about the off-label promotion of a pharmaceutical drug for patients who already suffered from chronic heart failure.


Bruce A. Moilan Sr.

$27 Million

Bruce Moilan was a seasoned hospital systems expert by the time he contacted our Firm. At the time he decided to file his qui tam lawsuit, he was employed by South Texas Health System as a System Director for Materials Management. In this position, he oversaw $24 million in annual purchases of supplies and equipment and helped determine budget, reduction and cost analysis throughout the contract bidding and negotiations process. His job was to insure proper implementation for purchasing, receiving and management of inventory, for McAllen Hospitals, L.P.



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