Anti-Kickback Statute

i-medicalinsurancefraudAnti-Kickback Statute, 42 U.S.C. § 1320a-7b(b)[Social Security Act § 1128B].

The Anti-Kickback Statute criminalizes the conduct of individuals or entities who knowingly and willfully offer, pay, solicit or receive remuneration in order to induce the referral of business reimbursable under a federallyfunded health care program.

Both sides of the kickback transaction are liable. Examples of “remuneration” include:

  • bribes
  • kickbacks
  • rebates
  • gifts
  • above or below market rent or lease payments
  • discounts
  • above or below market credit arrangements and
  • waiver of payments due

The statute prohibits remuneration which is made directly or indirectly, in cash or in-kind, and covers any arrangement where at least one purpose of the remuneration is for the referral of a service or item.

Violation of the statute constitutes a felony punishable by up to 5 years imprisonment and a maximum fine of $25,000. Conviction can lead to automatic exclusion from Federal health care programs, including Medicare and Medicaid.

There are a number of statutory and administrative “safe harbor” exceptions to the Anti-Kickback Statute which, if met, will avoid criminal liability. The safe harbor regulations are found at 42 C.F.R. § 1001.952. The statutory exceptions and safe harbors include:

  • properly disclosed discounts or other reductions in price
  • payments to bona fide employees
  • certain payments to group purchasing organizations
  • waivers of coinsurance for Medicare services for individuals who qualify for certain Public Health Service programs
  • certain risk-sharing and other arrangements with managed care organizations
  • instruments in certain large or small entities
  • investments in entities in underserved area
  • space rentals
  • equipment rentals
  • personal services and management contracts
  • sales of physician practices in health professional shortage areas to hospitals or other entities
  • sales of practices by one practitioner to another
  • referral services
  • warranties
  • discounts
  • bona fide employment arrangements
  • group purchasing organizations
  • coinsurance and deductible waivers
  • increased coverage, reduced cost-sharing amounts, or reduced premium amounts offered by health plans
  • price reductions offered to health plans
  • practitioner recruitment activities in underserved areas
  • subsidies for obstetrical malpractice insurance in underserved areas
  • investments in group practices
  • cooperative hospital service organizations
  • investments in ambulatory surgical centers (ASCs)
  • referral arrangements for specialty services
  • price reductions for eligible managed care organizations
  • price reductions offered to managed care organizations by contractors with substantial financial risk
  • ambulance replenishing
  • donations to federally qualified health centers
  • items and services related to electronic prescribing
  • items and services related to electronic health records and
  • cost-sharing waivers for beneficiaries who qualify for the low-income subsidy under Part D.

Each of the above-entitled safe harbors set forth specific conditions that, if met, assure the health care provider that he/she will not be prosecuted or sanctioned. Failure to meet a safe harbor does not mean that an arrangement automatically violates the anti-Kickback statute or is illegal; the government still must show that at least one purpose of the remuneration was for the referral of a service or item.

With that said, the small health care practitioner and provider should do everything possible to maintain compliance with the safe harbors to avoid OIG scrutiny.

A compliance officer or attorney can assist in this regard. If, however, the health care provider comes under investigation for a violation of the Anti-Kickback statute, Attorney Greenberg can provide the counsel necessary to avoid criminal prosecution. Learn what not to do, but if they accuse you of doing it, call Mark Greenberg at 267-253-7933.