What is the Anti-Kickback Statute?
The Anti-Kickback Statute (AKS) is a federal law that prohibits remuneration where Medicare, Medicaid, or another government program is involved. Under the federal statute (42 U.S.C. § 1320a-7b), it is unlawful to solicit, receive, offer, or pay remuneration to induce patient referrals or generate business involving any item or service paid for by the government. “Remuneration” is a broad term encompassing kickbacks, bribes, rebates, and anything else of value. Remuneration can take many forms—cash, free rent, excessive compensation, etc. In some instances, even waving deductibles or providing free items can constitute an AKS violation.
What Are the Penalties for Anti-Kickback Violations?
Under the AKS, violations can result in felony conviction, imprisonment of up to 10 years, fine of up to $100,000, and exclusion from federal healthcare programs. Additionally, the fact that a claim is made in violation of the AKS may also render it a “false” or fraudulent claim, exposing violators to criminal and civil liability under the False Claims Act.
Are There Any Exceptions?
There are numerous safe harbors that protect certain business and payment practices from AKS liability. To be protected by a safe harbor, the practice must satisfy all requirements of that safe harbor as established by the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). A full list of safe harbors, along with each one’s requirements, can be found here: 42 CFR § 1001.952.
These safe harbors relate to a range of areas, including:
- Investment interests;
- Space rental;
- Equipment rental;
- Personal services and management contracts, and outcomes-based payment arrangements;
- Sale of practice;
- Referral services;
- Warranties;
- Discounts;
- Bona fide employment relationship;
- Group purchasing organizations;
- Waiving beneficiary copayments, coinsurances, and deductibles;
- Increased coverage, reduced cost-sharing, or reduced premium offered by health plans;
- Price reductions offered to health plans;
- Practitioner recruitment;
- Obstetrical malpractice insurance subsidies;
- Investments in group practices;
- Cooperative hospital service organizations;
- Ambulatory surgical centers;
- Referral arrangements for specialty services;
- Price reductions offered to eligible managed care organizations (MCOs);
- Price reductions offered by contractors with substantial financial risk to MCOs;
- Ambulance replenishing;
- Federally Qualified Health Centers (FQHCs);
- Electronic prescribing items and services;
- Electronic health records items and services;
- Remuneration between FQHCs and Medicare Advantage Organizations;
- Medicare Coverage Gap Discount Program;
- Local transportation by an eligible entity;
- Point-of-sale reductions in price for prescription pharmaceutical products;
- Pharmacy benefit manager (PBM) service fees;
- Care coordination arrangements to improve quality, health outcomes, and efficiency;
- Value-based arrangements with substantial downside financial risk;
- Value-based arrangements with full financial risk;
- Arrangements for patient engagement and support to improve quality, health outcomes, and efficiency;
- Cybersecurity technology and related services; and
- ACO Beneficiary Incentive Program.
Chicago-Based AKS Violations Defense Firm
The AKS and its safe harbors can be difficult to navigate. Qualified counsel can help determine whether a particular business or payment practice might be prohibited or covered by a safe harbor. To discuss how Pavalon Law can help you, please call (312) 815-2683 or email info@pavalon.com today.