Like the False Claims Act, the Anti-Kickback Statute (AKS) remains a frequent tool used by the Department of Justice to investigate the healthcare industry. Unlike the False Claims Act, the AKS imposes criminal penalties on violators. This post will outline the basics of how the statute operates, the penalties permitted by law, and the most common ways physicians' practices violate it.
The Anti-Kickback Statute
The AKS prohibits offering, paying or receiving anything of value in return for referrals for which payments are made by a government program (including Medicaid, Medicare and Tricare). Specifically, you can be charged with a crime for:
1. Knowingly and willfully soliciting or receiving any "remuneration (including any kickback
bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind"
(A) in return for referring someone for "any item or service for which payment may be made in whole or in part under a Federal health care program" or
(B) in return for "purchasing, leasing, ordering, or arranging for" (or recommending) any goods or service that are paid for by a Federal health care program."
2. Knowingly and willfully offering or paying any remuneration
(A) to refer a person for an item or service paid for by a Federal health care program, or,
(B) to "purchase, lease, order, or arrange for" (or recommending) any goods or services that are paid for by a Federal health care program.
The statute is very broad. It covers both the person and company that offer or pays the kickback, and the person or company that solicits or receives the kickback.
There are certain "safe harbors" in the AKS and defined by regulations. These provisions describe certain conduct — such as payments to employees and discounts to customers. If you meet one of the safe harbors, you cannot be criminally prosecuted for the conduct. This sounds simple in theory, but there are many gray areas within them. You may think you meet a safe harbor, but if DOJ disagrees, you could be forced to defend your position during a criminal prosecution.
There are Department of Health and Human Services (HHS) Office of Inspector General Advisory Opinions that offer guidance about the safe harbors but an experienced healthcare regulatory attorney can help you navigate them.
There are serious penalties for violating the AKS. The statute provides that violations are a felony and sets a maximum penalty of five years in prison and a $25,000 fine.
As though these penalties aren't severe enough, prosecutors often charge other criminal violations along with an AKS charge, such as wire fraud. The ultimate sentence could be even longer than the 5-year limit in the statute. Plus, many False Claims Act cases are based on violations of the AKS, so the parallel civil fines may increase dramatically above the $25,000 cap in the AKS.