Who Does The Anti-Kickback Law Apply To?

The Anti-Kickback Statute (AKS) is a federal law that prohibits the exchange or offer to exchange anything of value in an effort to induce or reward the referral of business reimbursable by federal healthcare programs. The AKS covers a broad range of activities and applies to all medical providers who can arrange or recommend medical services. This includes physicians, hospitals, nursing homes, labs, dialysis centres, drug companies, and durable medical equipment (DME) suppliers. The AKS is enforced by government agencies such as the Department of Justice, the Department of Health and Human Services, and the Centers for Medicare and Medicaid Services (CMS). Violating the AKS can result in criminal and civil penalties, including fines, jail time, and exclusion from federal healthcare programs. Therefore, it is crucial for healthcare providers to understand and comply with the AKS to avoid legal consequences and ensure ethical medical decision-making.

Who does the Anti-Kickback Law apply to?

The Anti-Kickback Statute (AKS) is a US federal law that applies to anyone who offers or receives kickbacks in any form to induce or reward those who generate business involving the treatment of patients and services that are reimbursed by federal healthcare programs. This includes all medical providers in a position to arrange or recommend medical services. The AKS covers a broad range of activity and extends beyond just physicians to anyone who can refer patients.

The AKS prohibits the exchange or offer to exchange anything of value to induce or reward the referral of business reimbursable by federal healthcare programs. This includes financial incentives for referrals, free or very low rent for office space, or excessive compensation for medical directorships. It also includes waving copayments, either routinely or on a case-by-case basis.

The AKS is enforced by government agencies, including the Department of Justice, the Department of Health & Human Services Office of Inspector General (OIG), and the Centers for Medicare & Medicaid Services (CMS). Violating the AKS can result in criminal as well as civil penalties, including fines of up to $25,000, up to ten years in jail, and exclusion from federal healthcare programs.

In addition to the AKS, there are also state-level anti-kickback laws that apply to medical providers and entities participating in Medicaid programs. These state-level laws must also be complied with to avoid penalties.

What is the Anti-Kickback Law?

The Anti-Kickback Law, also known as the Anti-Kickback Statute (AKS), is a federal law in the United States that prohibits the exchange or offer to exchange anything of value in an effort to induce or reward the referral of business reimbursable by federal healthcare programs. The AKS is a criminal law that applies to all medical providers, including physicians, hospitals, nursing homes, labs, dialysis centres, drug companies, and medical equipment suppliers.

The AKS defines "remuneration" as anything of value, including cash, gifts, free or discounted supplies or services, travel, free rent, expensive hotel stays, meals, and excessive compensation for medical directorships or consultancies. It is illegal for medical providers to pay or receive kickbacks, remuneration, or anything of value in exchange for referrals of patients whose treatment will be paid for by government healthcare programs such as Medicare and Medicaid.

The purpose of the AKS is to keep medical treatment decisions free from the influence of potential monetary gain. Kickbacks and other unlawful financial arrangements can lead to over-utilisation of medical services, increased program costs, and poor medical decision-making. The AKS helps ensure that patients receive care based on their actual medical needs rather than the financial interests of their physicians.

Violating the AKS is a felony and can result in severe penalties, including criminal and civil sanctions such as fines of up to $25,000 per kickback plus three times the amount of remuneration, jail terms of up to five years, and exclusion from participation in federal healthcare programs.

The AKS has undergone multiple amendments since its inception in 1972, reflecting the evolving approach to healthcare fraud. It is one of the five most important federal fraud and abuse laws that apply to physicians, along with the False Claims Act (FCA), the Physician Self-Referral Law (Stark Law), the Exclusion Authorities, and the Civil Monetary Penalties Law (CMPL).

What are the penalties for violating the Anti-Kickback Law?

The Anti-Kickback Statute (AKS) is a federal criminal law that prohibits the exchange or offer to exchange anything of value to induce or reward the referral of business reimbursable by federal healthcare programs. Violating the AKS can result in serious penalties, including:

• Fines of up to $25,000 per kickback, or up to $50,000 per kickback under the Civil Monetary Penalties Law (CMPL), plus three times the amount of remuneration.
• Up to five years in jail, or up to ten years in jail as the AKS is a felony.
• Exclusion from participation in federal healthcare programs, including Medicare and Medicaid.
• Loss of medical license from the State medical board.

Violating the AKS also triggers liability under the False Claims Act, which can result in additional fines and penalties.

It is important to note that the AKS applies to both sides of the transaction—the kickback requester/receiver and the offeror/payer. Additionally, the AKS covers a broad range of participants in the healthcare system, including doctors, patients, procurement staff, and marketing/sales personnel.

Safe harbors exist to protect certain payment and business practices that could otherwise implicate the AKS from criminal and civil prosecution. However, to be protected by a safe harbor, an arrangement must meet specific requirements.

What are some examples of Anti-Kickback Law violations?

The Anti-Kickback Statute (AKS) is a federal criminal law that prohibits the exchange or offer to exchange anything of value in an effort to induce or reward the referral of business reimbursable by federal healthcare programs. Violation of the AKS is a felony, punishable by a fine of up to $100,000 and up to ten years in jail.

• Monetary kickbacks to doctors and medical practices: Pharmaceutical company Biogen paid $900 million to settle claims that it paid physicians to prescribe its multiple sclerosis drugs.
• Offering trips and gifts: A medical software company, Athena, paid $18.25 million to settle claims that it paid illegal kickbacks, such as all-expense-paid trips, to generate referrals for its cloud-based electronic health record technology.
• Improperly waiving copays: DermaTran Health Solutions LLC, a compounding pharmacy, paid $6.87 million to resolve allegations that they violated the False Claims Act by waiving copays, charging the government higher prices than permitted, and trading federal healthcare business with other pharmacies.
• Paying kickbacks to doctors to practice at a facility: Halifax Hospital Medical Center, a Florida hospital system, paid $85 million to settle claims that it paid illegal bonuses to physicians based on the number of patients they referred and the number of prescriptions they wrote.
• Offering kickbacks to physicians for referrals: BioReference Health, LLC, one of the largest clinical laboratories in the United States, paid $10 million to settle claims that it paid kickbacks to physicians to induce referrals for laboratory services.

How is the Anti-Kickback Law different from the Stark Law?

The Anti-Kickback Statute (AKS) and the Stark Law (also known as the Physician Self-Referral Law) are two federal statutes that prohibit the exchange of remuneration for patient referrals or the generation of business involving any item or service payable by federal healthcare programs. While both statutes are similar in nature, there are some key differences between the two.

Firstly, the AKS applies to all government-funded healthcare programs, including TRICARE and patients under the Department of Labor programs, whereas the Stark Law is limited to Medicare and Medicaid.

Secondly, the AKS applies to referrals from anyone, while the Stark Law only applies to referrals from physicians with financial relationships with the provider of the designated health service. That said, anyone can violate the AKS by illegally referring patients, but only physicians can violate Stark Law's self-referral prohibitions.

Thirdly, the AKS covers all services or items for which payment is sought from a federal healthcare program. In contrast, the Stark Law applies only to a specific list of "Designated Health Services" (DHS), which includes clinical laboratory services, physical therapy, occupational therapy, outpatient speech-language pathology services, radiology, radiation therapy, durable medical equipment, and supplies, among others.

Fourthly, the AKS specifies certain optional safe harbors, while the Stark Law expressly excludes a number of "exceptions" from the purview of the law, such as bona fide employment relationships, in-office ancillary services, and personal physician services.

Finally, to prove a violation of the AKS, prosecutors must demonstrate that a person "knowingly and willfully" violated the law. On the other hand, the Stark Law holds a physician or designated health service liable for reimbursing the government for any monies received in violation of the law but does not require proof of intent to induce referrals. The Stark Law is a strict liability statute, which means proof of specific intent to violate the law is not required.

In terms of penalties, the Stark Law is limited to civil penalties, such as denial of payment, fines, reimbursement, and False Claims Act liability. In addition to civil sanctions, the AKS also provides for criminal punishment, including up to 5 years in prison and a $25,000 fine for each violation.

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