Federal Anti-Kickback Statute

The Anti-Kickback Statute (AKS) is a federal law that prohibits the exchange of any form of remuneration for patient referrals or the generation of business involving any item or service reimbursable by a federal healthcare program. The law aims to protect patients and the integrity of the healthcare system by ensuring that medical decisions are made based on the best interests of the patient, rather than financial incentives. There are a number of different things involved in the background, scope and implications of this law, as well as significant penalties for violations which highlights the importance of compliance.

Background and Scope

Man giving several hundred dollars above his shoulder with a hand reaching and grabbing the money

The Anti-Kickback Statute, enacted in 1972, is part of the Social Security Act (42 U.S.C. § 1320a-7b(b)). It applies to transactions involving any federal healthcare program, such as Medicare, Medicaid, and TRICARE. The law covers a broad range of prohibited activities, including the payment or receipt of kickbacks, bribes, or rebates for referring patients or arranging for services covered by federal healthcare programs. The AKS also extends to indirect remuneration, such as discounts, gifts, and waivers of copayments.

Both parties involved in the kickback arrangement can be held liable under the statute. This means that the individual or entity offering, paying, soliciting, or receiving the kickback can be prosecuted. The AKS is an intent-based statute, meaning that the government must prove that the parties involved knowingly and willfully participated in the prohibited arrangement.

Safe Harbors and Exceptions

To provide guidance for legitimate business arrangements that might otherwise violate the AKS, the Department of Health and Human Services (HHS) has established “safe harbor” provisions. These provisions outline specific payment practices that are exempt from prosecution under the AKS. Some common safe harbors include:

  1. Investment interests in certain small or large entities
  2. Space and equipment rental
  3. Personal service and management contracts
  4. Sale of a practice
  5. Discounts and rebates

It is important to note that failure to meet a safe harbor provision does not automatically imply a violation of the AKS. Each arrangement must be analyzed on a case-by-case basis to determine if it violates the statute.

Penalties for Violations

Violations of the Anti-Kickback Statute can result in severe consequences, both civil and criminal. These penalties may include:

  1. Fines up to $25,000 per violation
  2. Imprisonment for up to five years per violation
  3. Exclusion from federal healthcare programs
  4. Civil monetary penalties up to $50,000 for each kickback, plus three times the amount of remuneration
  5. Liability under the False Claims Act, which can result in treble damages and additional penalties

Compliance and Importance

Given the severe penalties associated with AKS violations, healthcare providers and organizations must establish and maintain robust compliance programs to prevent, detect, and correct any potential violations. Compliance efforts should include ongoing employee training, regular audits, and the implementation of policies and procedures designed to minimize the risk of AKS violations.

The Anti-Kickback Statute plays a vital role in safeguarding the integrity of the healthcare system by ensuring that medical decisions are based on the best interests of the patient rather than financial incentives. By complying with the AKS, healthcare providers and organizations can avoid costly penalties and maintain the trust of patients and regulators.

Working with a Anti-Kickback Law Attorney

The Anti-Kickback Law is a critical component of the healthcare regulatory landscape, designed to protect patients and preserve the integrity of the healthcare system. Healthcare providers and organizations must be vigilant in understanding the law and its implications, as well as implementing rules and procedures that ensure compliance.

In many situations, providers find it best to work with an attorney specializing in Anti-Kickback law. The attorneys at Di Pietro Partners have decades of combined experience working with healthcare professionals to ensure their practice is in compliance with Anti-Kickback Statutes. If you are in need of assistance with AKS compliance or violations, please contact our office today to see how we can help.