Health Care Fraud and the Anti-Kickback Statute

Health care fraud is a growing epidemic in the U.S. that affects everyone. Health care fraud can lead to higher health insurance premiums and increased taxes. Federal laws such as the Anti-Kickback Statute and the False Claims Act help protect us against this type of fraud.

This article overviews health care fraud and the federal Anti-Kickback Statute (AKS).

What Is a Kickback?

A "kickback" is a form of bribery where the parties exchange something of value for a positive outcome or favorable decision. Although they may vary in form, kickback schemes are almost always unlawful and can impact various aspects of life, including health care.

For instance, suppose you're a Medicaid patient hurt in an accident. You go to your physician for medical care. Your physician gives you a referral to a specific home health agency. Unbeknownst to you, the doctor received cash and sports tickets for making the patient referral. Because this kickback concerns health care, the physician could face criminal charges from an Anti-Kickback Statute violation.

The Anti-Kickback Statute

The Anti-Kickback Law or Anti-Kickback Statute (AKS) is a federal criminal law that forbids kickbacks in federal health care programs. This law aims to protect patients and eliminate waste, abuse, and health care fraud from federal health care programs. These programs include, but are not limited to, the following:

• Medicare program
• Medicaid program
• Children's Health Insurance Program (CHIP)

It is a crime under the AKS to knowingly and willfully exchange a gift or other remuneration with the intent to gain something from the exchange. For example, a health care provider accepts one of the following to generate reimbursement from a government health care program:

• Payment
• Product
• Services
• Solicitations

The following is a non-exhaustive list of potential non-monetary things of value:

• Cash
• Unrestricted grant money
• Financial interests or investment interests
• Free medical equipment

Other Federal Laws Addressing Health Care Fraud

The AKS is one of six federal laws that address health care fraud and abuse. Per the Department of Health and Human Services' (HHS) Office of Inspector General (OIG), these other five laws include the following:

• Physician Self-Referral Law (Stark Law)
• False Claims Act (FCA)
• Exclusion Authorities
• Civil Monetary Penalties Law (CMPL)
• Beneficiary Inducement Statute

Understanding Health Care Fraud

Health care fraud affects all of us, whether it results in any of the following or not:

• Higher insurance premiums
• Overutilization of medical services
• Unnecessary medical procedures

We trust our physicians, relying on their advice and recommendations in our medical decision-making. This trust diminishes when our health care providers get kickbacks or other financial incentives in exchange for recommending treatment or medical devices. Health care fraud jeopardizes patient care and the delivery of health care services.

Health care fraud is an issue across our health care system, including, but not limited to, the following:

• Hospital services
• Clinical laboratory (lab testing)
• Pharmaceutical companies (pharmacies and prescription drugs)

As a patient, you have a right to receive care not connected to your physician's financial interest. If you suspect your health care provider is engaging in health care fraud, you can submit a complaint to the HHS Office of Inspector General's complaint hotline. The Department of Justice states that hotline tips are incredibly valuable, and this department appreciates your efforts to help stamp out fraud, waste, and abuse.

What the Anti-Kickback Statute Covers

The scope of the statue is broad; it covers both the person and the company that offers or pays the kickback and the person or company that solicits or receives it. For instance, if a hospital participated in a scheme to incentivize patient recruiters to recruit homeless patients, the hospital and the recruiters violated the AKS.

Penalties for Violations of the Anti-Kickback Statute

Unlike the Stark Law, which deals with improper referrals, civil and criminal penalties apply to persons or entities that violate the AKS. Possible penalties for an AKS violation include the following:

• Criminal Penalties: fines, jail terms, and exclusion from participation in the Federal health care programs
• Civil penalties: fines up to $50,000 per violation, extra fines up to three times the payment amount
• Administrative sanctions: Possible exclusion from participation in federal health care programs.

Safe Harbor Exemptions

"Safe harbor" regulations exempt specific transactions and arrangements that would otherwise be an AKA violation. If the parties qualify for the "safe harbor," they aren't in violation. Examples of protected practices include the following, among others:

• Payments made for space rentals or equipment rentals
• Referrals made as part of an employment or professional service agreement
• Specific payments made for health practitioner recruitment purposes

Liability Under the False Claims Act

The False Claims Act (FCA) is a federal statute that bans businesses from submitting false claims to defraud the federal government. Consider, for example, a physician who prescribes an unnecessary medical device to a patient under a kickback scheme. The physician then bills Medicaid, knowing the patient doesn't need the device. This is a false or fraudulent claim.

Under the FCA, businesses that submit fraudulent claims face severe penalties, as set forth by the HHS OIG, including:

• Treble damages per claim
• Civil penalties of up to $11,000 per claim

The civil FCA does not require specific intent to defraud and offers special incentives to whistleblowers. A whistleblower is a person who reports fraudulent or criminal activity in their workplace. Under the FCA, whistleblowers can file a lawsuit on behalf of the United States (a qui tam lawsuit) and keep a percentage of the recovery.

Penalties also include criminal fines, imprisonment, or both.

Get Legal Help

Health care fraud affects our entire health care system. If a patient or physician is concerned about possible AKS violations, they should speak to a whistleblower and qui tam attorney. They are experts in navigating whistleblower lawsuits and can offer sound legal advice. Speak to an experienced whistleblower and qui tam attorney today.