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 were 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.