Antikickback Statute In A Nutshell

Similar to the Stark Law, the Antikickback statute seeks to regulate the financial relationships between physicians and/or other provider entities where there is a possibility of patient referrals for items or services reimbursable by a Federal health care program.  

To that end, the statute makes it a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce or reward for referrals of items or services reimbursable by a Federal healthcare program, including Medicare and Medicaid. (42 U.S.C. § 1320a-7b). Remuneration includes the transfer of anything of value, directly or indirectly, overtly or covertly, in cash or in kind.

The statute is worded broadly and, in addition to Medicare and Medicaid beneficiaries, it is also concerned with those enrolled in the TriCare Program, the Black Lung Program and the Indian Health Service. The statute is also broader than the Stark Law since it applies to financial relationships with any person or entity that refers patients to a provider for any services reimbursable by a Federal health care program. The Stark Law, on the other hand, applies only to financial relationships involving physicians or members of his or her family and referrals for designated health services. The Antikickback statute also prohibits the “recommending” for purchase, lease, or order of any goods, facility, service, or items payable by a Federal healthcare program.

Penalties are applied to both sides of an impermissible transaction and could include criminal and civil liability. Violation of the statute is punishable by fines of up to $25,000 and/or imprisonment for up to 5 years, and may also result in the imposition of a civil money penalty and/or exclusion from participation in the Medicare and Medicaid programs.

The Antikickback statute is an intent-based statute. This means that a party has to “knowingly and willfully” engage in a prohibited conduct in order to be liable.  It should be noted, however, that the Patient Protection and Affordable Care Act of 2010 eliminated the requirement for the government to demonstrate a defendant’s specific intent to violate the Antikickback Statue.  A requirement showing intent to violate a law, however, still exists.

Under current case law, as well as the government’s perspective, it is irrelevant that some or many legitimate reasons existed for the referral.  As long as one purpose of the remuneration was to obtain money for the referral of services or to induce further referrals, there is a violation.

The Antickickback statute carves out certain “relatively innocuous” and “in some cases even beneficial commercial arrangements” from its reach. To avoid inviting attention of the Office of Inspector General (OIG), the agency that investigates compliance with the Antikickback statute, providers’ financial arrangements should comply with the statute’s safe harbor provisions.

If you have questions about the application of the Antikickback statute to physician arrangements or need other legal assistance, please contact us.