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What Is The Anti-Kickback Statute?
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 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.
Common categories for illegal healthcare kickbacks include:
- Pharmaceutical Kickbacks – for prescribed drugs, and biologics.
- Surgical Kickbacks – including kickbacks in exchange for using or prescribing particular surgical equipment and supplies, to include devices, implants, and Neuromonitoring.
- Medicaid Kickbacks – payments to healthcare providers in exchange for referrals for products or services billed to Medicaid programs.
- Medicare Kickbacks – payments to healthcare providers in exchange for referrals for products or services billed to Medicaid programs.
Illegal Remuneration Under the Anti-Kickback Statute (AKS)
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 statute ascribes liability to both sides of an impermissible kickback relationship.
Illegal remuneration under the AKS includes:
- Above- or below-market rent or lease arrangements
- Free services or equipment
- Generally anything else of value
Anti-Kickback Safe Harbors
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 allow for certain payment and business practices that could otherwise implicate the AKS, but only if the arrangement fits squarely within the safe harbor and satisfies all of its requirements.
Some of these regulatory safe harbors include:
- Rental agreements
- Personal services
- Investments in ambulatory surgical centers
- Payments to bona fide employees
Space and equipment rental safe harbors generally include 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 must remain consistent with fair-market value in arms-length transactions and cannot be determined in a manner that takes into account the volume or value of any referrals or business otherwise generated between the parties.
Private Citizens Can a File an FCA qui tam lawsuit based upon violations of the Anti-Kickback Statute
Private citizens may bring qui tam actions alleging violations of the Anti-Kickback Statute as part of a False Claims Act (FCA) lawsuit. Congress explicitly encouraged such qui tam actions in 2010, expressly including a provision in the Affordable Care Act making it clear that claims submitted to Medicare or Medicare tainted by AKS violations, are violative 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.
To determine whether or not AKS violations have occurred, contact our Anti-Kickback Lawyers today to assess your potential case.
Filing a Healthcare Kickback Whistleblower Claim – Confidentiality, Protection, Rewards
The qui tam provisions of the False Claims Act make it possible for whistleblowers to collect a percentage of what has been recovered as an award for this important service. Our anti-kickback whistleblower attorneys file lawsuits under the qui tam provisions, which provide monetary incentives to encourage private individuals who are aware of Healthcare Fraud to bring such information forward.
If you are aware of illegal kickbacks or other fraud within the healthcare industry, the law protects you as a whistleblower. Scheduling a free review of your case is a confidential way to get started. Contact us online or call us at 800.372.8304 to speak with our qui tam attorneys.
Learn More: Whistleblower Protection
Illegal Kickback Lawsuits & Whistleblower Reward Incentives
For more than 25 years, the Whistleblower Firm of Nolan Auerbach & White has Medicaid, and other Government Healthcare Programs. Our heroic clients have contributed to the recovery of over 2 billion to the government fisc. We represent our our anti-kickback lawyers, by partnering with investigators, Government attorneys, and Agencies to prosecute healthcare fraud and recover stolen healthcare funds under the qui tam provisions of the False Claims Act.
Our whistleblower Healthcare Fraud Law Firm has represented clients in obtaining whistleblower awards varying from 15-30 percent of the amount recovered from companies that engage in fraudulent activities against the federal government.
SPEAK WITH AN AKS ATTORNEY
Physicians and Kickback Schemes
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 otherwise 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.
When Physician Speaking Engagements Break the Law
Every day across the country, some physicians receive large speakers’ honoraria checks from pharmaceutical and medical device companies. These funds compensate the physicians for speaking at so-called “educational programs,” which, if proper, are intended to educate other healthcare providers, inter alia, about the science underlying particular drugs and devices.
However, when these CME programs are nothing more than sham events intended to bribe physicians, the federal Anti-Kickback Statute and the False Claims Act are violated, potentially triggering liability for both the speaker and the manufacturer. Indications of this may include:
- The events lack educational value to the attendees and are nothing more than social events.
- The events lack any informational material, including on Powerpoint slides, which have been approved by the sponsor company.
- The events are held at venues that are not conducive to an education program (e.g., in sports bars, on fishing trips, at high end restaurants without private meeting areas).
- The manufacturer touts internal analyses showing that its speaker programs have a high return on investment in terms of additional prescriptions for its drugs written by the doctors who participate in the program, both as speakers and attendees.
- Physicians receive compensation to attend speaker training, notwithstanding that many of them are not used as speakers.
- Prescription writing records for physician-speakers reveal a significant correlation in the number of prescriptions and the amount of payments.
- The manufacturer creates incentives for sales representatives to use speaker programs as kickbacks without sufficient controls to prevent kickbacks from occurring.
- Speakers are nominated by sales representatives, who pick doctors who have the highest prescription writing potential. Speakers are not selected by home office personnel based upon the merits of their knowledge and speaking ability.
- Speakers are approved without regard to merit.
- Sales representatives have a periodic budget for speaker programs, which they are pressured to spend.
- Sales representatives not only select the speaker, but also the venue, the topic of the program, and the date for the program.
- The manufacturer places no limit on the number of programs a doctor can attend or how often a doctor can attend the same program.
- There are no system controls to prevent a sales rep from arranging for the same doctors to take turns repeatedly speaking and attending each other’s programs.
- Physician-speakers are paid to speak even when no one is in attendance except for members of the speakers’ own medical practices.
- The company facilitates sales representatives ability to easily sidestep supposed per-attendee spending limits placed on events held at restaurants and other venues.
- Sales representatives spend lavishly on food and alcohol for attendees and speakers.
- The manufacturer does not require that a restaurant have a quiet atmosphere or even a private room to be an acceptable venue for speaker programs.
- There is no prohibition against holding programs at restaurants that are high-end for the particular community in which they are located.
- There are few checks on whether the sales representatives are reporting truthfully on who attends speaker programs.
- The manufacturer does not require signatures on attendance sheets at speaker events.
- The manufacturer threatens to remove physician-speakers from the speakers’ bureau if they decrease their prescription volumes.
- High-prescribing physician-speakers are permitted to speak at events even when they lack basic communication skills and knowledge.
Unsure of your next steps? Start a free and confidential conversation with our Anti-Kickback Attorneys. We support whistleblowers every step of the way.
Physician-Owned Distributors & Anti-Kickback Violations
Physician-Owned Distributors (“PODs”) can violate the anti-kickback statute even if only one purpose is to induce referrals. In the Office of Inspector General’s (OIG) Special Fraud Alert titled, “Physician-Owned Entities”(1), the OIG indicated that it remains suspicious of physician-owned distributors due to concerns about over-utilization, skewed medical judgment, increased costs to the federal healthcare programs, and unfair competition.
Central to the OIG’s concerns is, “…the strong potential for improper inducements between and among the physician investors, the entities, device vendors, and device purchasers.” It further stated that such ventures, “should be closely scrutinized under the fraud and abuse laws.”
In certain circumstances, when physicians or other healthcare providers profit from the use of medical devices fin procedures that they perform on their own patients at hospitals or ambulatory surgical centers (“ASCs”), the OIG views such arrangements as potential vehicles for fraud and abuse as well as risk to patient safety.
“Improper payments to physicians can alter a physician’s judgment about patients’ true healthcare needs and drive up healthcare costs for everyone,” said Assistant Attorney General Stuart F. Delery for the Justice Department’s Civil Division. “The Justice Department is committed to enforcing the laws that prohibit such payments.”(2)
Possible POD Violations of the Anti-Kickback Statute
Characteristics of PODs that are indicative of conduct and arrangements violative of the Anti-Kickback statute include:
- The size of the investment offered to each physician varies with the expected or actual volume or value of devices used by the physician.
- Distributions are not made in proportion to ownership interest, or physician-owners pay different prices for their ownership interests, because of the expected or actual volume or value of devices used by the physicians.
- Physician-owners condition their referrals to hospitals or ASCs on their purchase of the POD’s devices through coercion or promises, for example, by stating or implying they will perform surgeries or refer patients elsewhere if a hospital or an ASC does not purchase devices from the POD, by promising or implying they will move surgeries to the hospital or ASC if it purchases devices from the POD, or by requiring a hospital or an ASC to enter into an exclusive purchase arrangement with the POD.
- Physician-owners are required, pressured, or actively encouraged to refer, recommend, or arrange for the purchase of the devices sold by the POD, or conversely, are threatened with, or experience negative repercussions (e.g. decreased distributions, required divestiture) for failing to use the POD’s devices for their patients.
- The POD retains the right to re-purchase a physician-owner’s interest for the physician’s failure or inability (through relocation, retirement, or otherwise) to refer, recommend, or arrange for the purchase of the POD’s devices.
- The POD is a shell entity that does not conduct appropriate product evaluations, maintain or manage sufficient inventory in its own facility, or employ or otherwise contract with personnel necessary for operations.
At Nolan Auerbach & White, our experienced Medical Equipment Fraud Lawyers help courageous whistleblowers take on these common types of AKS violations. Contact our team of AKS attorneys to explore your options as a potential whistleblower.
Other Types of Healthcare Fraud
Our Healthcare Fraud attorneys have the knowledge and experience to discuss in-depth areas of fraud within the healthcare industry. Other common types of fraudulent activity we encounter and encourage individuals to bring forward as whistleblowers include:
We invite you to get started by filling out our online form for potential clients, or give our experienced team of healthcare fraud attorneys a call today at 800.372.8304. Join the many whistleblower heroes that have stepped forward and exposed AKS violations of the law, taking a stand for justice and taxpayers in the healthcare industry. It could mean that you share a percentage of the funds recovered from fraudulent activity.
Frequently Asked Questions About Anti-Kickback Lawsuits
✅ Are Doctor Kickbacks Illegal?
Payments to physicians, healthcare companies or other providers in exchange for referrals can be violative of the federal Anti-Kickback Statute and the Stark Law.
✅ Who Enforces the Anti-Kickback Statute?
The AKS is enforced by the United States Department of Justice. The U.S. Department of Health and Human Services Office of Inspector General, the Centers for Medicare & Medicaid Services (CMS) and other government agencies, are integrally involved with the regulation of, and assistance with, investigations and prosecutions of anti-kickback violations.
✅ What Are Common Punishments for Illegal Kickbacks in Healthcare?
Violations of the federal Anti-Kickback Statute can result in felony convictions and violators may face up to 10 years in prison and up to $100,000 in penalties. Civil monetary penalties include $50,000 per referred services and three times the amount of the remuneration.