Paul Sanchez
In the United States, the Anti-Kickback Statute (AKS) prohibits offering or accepting kickbacks intended to generate healthcare business. Violation of the AKS is a felony, punishable by up to 10 years in jail and fines of $100,000 per violation. The AKS applies to both sides of the kickback arrangement, including doctors, patients, procurement staff, and marketing/advertising/sales personnel. While the AKS is a federal law, individual states may have their own anti-kickback statutes that target corruption in the healthcare industry. In New Jersey, it is illegal to offer or receive kickbacks in connection with services billable to the Medicaid program, with penalties of up to 3 years in prison and a $10,000 fine.
| Characteristics | Values |
|---|---|
| What is prohibited by the Anti-Kickback Statute? | Offering or accepting kickbacks intended to generate health care business |
| What does the Anti-Kickback Statute prohibit paying remuneration to? | Doctors when referring patients to things paid for by health insurance (drugs, tests, equipment, etc.); Patients when choosing to buy or lease or order things paid for by health insurance; Procurement Staff/Management when choosing what supplies to buy, lease, or order for organizations; Marketing/Advertising/Sales – Anyone in a position to encourage the buying, leasing, ordering of things paid for by health insurance |
| What is the intent element of the Anti-Kickback Statue? | It only applies when the purpose of the kickback is to reward or induce the referring, buying, etc. |
| What is the penalty for violating the Anti-Kickback Statute? | Violation of the Anti Kickback Statute (AKS) is a felony, with serious penalties. Violating the Anti-Kickback Statute also results in liability under the False Claims Act, the government’s most powerful anti-fraud statute. Violation of the AKS is punishable by ten years in jail and fines of $100,000 per violation |
| What is the penalty for offering or receiving kickbacks in connection with the furnishing of items or services which are billable to the Medicaid program in New Jersey? | Punishable by up to 3 years in prison and a $10,000 penalty. They may also be violations of the Health Care Claims Fraud Act and other criminal statutes |
| Which federal fraud and abuse laws apply to physicians? | The False Claims Act (FCA), the Anti-Kickback Statute (AKS), the Physician Self-Referral Law (Stark law), the Exclusion Authorities, and the Civil Monetary Penalties Law (CMPL) |
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What You'll Learn
Doctors receiving kickbacks for prescribing certain drugs
Doctors play a crucial role in the healthcare industry as they decide what drugs patients use, which specialists they see, and what health care services and supplies they receive. This decision-making power makes them attractive targets for kickback schemes, where companies offer incentives to doctors to prescribe their drugs or use their products. While receiving kickbacks for prescribing certain drugs may be perceived as a benign practice or a "moonlighting gig" by some physicians, it is illegal and can have serious consequences.
In the United States, the Anti-Kickback Statute (AKS) prohibits the offering or accepting of kickbacks intended to generate healthcare business. This federal criminal law applies to doctors when they refer patients to drugs, tests, equipment, specialists, or other healthcare services and supplies paid for by health insurance. The AKS defines remuneration broadly, including payments made directly or indirectly and in cash or in kind, such as expensive dinners, tickets, hotel stays, and gifts. It is important to note that the AKS applies to both sides of the kickback arrangement, meaning both the entity offering the kickback and the doctor receiving it may be subject to criminal liability.
The Department of Health and Human Services Office of Inspector General (HHS OIG) has stated that "influencing or 'swaying' physician prescribing" is a key factor in determining whether a payment constitutes an illegal kickback under the AKS. Evidence suggests that payments from pharmaceutical companies to physicians often influence prescribing behaviors, leading to increased prescription drug costs and potential harm to patients. In addition to violating the AKS, such practices may also violate the False Claims Act, the Physician Self-Referral Law (Stark Law), and other fraud and abuse laws.
Despite the illegality and potential consequences, the practice of kickbacks to physicians is prevalent. Investigations by ProPublica, a nonprofit newsroom, revealed that over 700 doctors received at least $1 million each from drug and medical device companies in recent years. These payments were often made for promotional talks, consulting, and sponsored speeches, with companies spending billions of dollars annually on these activities.
To summarize, doctors receiving kickbacks for prescribing certain drugs is illegal and unethical. It violates federal laws such as the Anti-Kickback Statute and exposes physicians to criminal penalties, civil fines, and potential loss of their medical licenses. The impact of these practices on patient care and healthcare costs underscores the importance of addressing and preventing kickback schemes in the healthcare industry.
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Patients receiving kickbacks for choosing certain treatments
In the US, the Anti-Kickback Statute (AKS) is a federal criminal law that prohibits offering or accepting kickbacks to generate healthcare business. The AKS is also known as the Medicare and Medicaid Fraud and Abuse Statute. Violation of the AKS is a felony, punishable by fines of up to $100,000 and 10 years in prison per offense. The AKS prohibits paying remuneration to several kinds of people, including patients when choosing to buy, lease, or order things paid for by health insurance.
Remuneration is defined very broadly and includes anything of value, including payments made "directly or indirectly, overtly or covertly, in cash or in kind". Examples of remuneration can include free rent, expensive hotel stays and meals, and excessive compensation for medical directorships or consultancies.
The AKS applies to both sides of the transaction, so it prohibits both the offering and accepting of kickbacks. The AKS also applies to all sources of referrals, including patients. For example, where Medicare and Medicaid programs require patients to pay copays for services, providers are generally required to collect that money from their patients. Routines waiving of these copays could implicate the AKS.
There is empirical evidence that industry payments to physicians influence their prescribing practices, resulting in higher pharmaceutical spending that is unlikely to improve patient outcomes. This can include increasing the prescribing of "re-branded" medications, where manufacturers create new brand names (and charge higher prices) for drugs already available as generics.
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False claims impacting Medicaid
Medicaid is a health insurance program that is administered by individual states on a day-to-day basis, with the federal government covering, on average, two-thirds of the program's cost. Both the states and the federal government have agencies responsible for preventing, detecting, and prosecuting fraud against Medicaid. These include the Centers for Medicare & Medicaid Services (CMS), which uses the Payment Error Rate Measurement (PERM) program to identify improper payments in each state, determine the root causes of those improper payments, and produce state-specific corrective action plans.
Despite repeated claims to the contrary, PERM does not measure fraud. However, nearly four-fifths of improper payments are due to missing or insufficient documentation to support the payment as proper or improper. In a majority of cases, Medicaid payments were classified as improper because information required for payment or eligibility determination was missing from the claim or state systems. The remaining improper payments were payments that should not have been made, including payments made in cases where the beneficiary was ineligible for the program or received a service that was not covered, and payments made to providers who were not enrolled in the program.
Submitting false claims to Medicaid is illegal and may result in criminal penalties, including imprisonment and criminal fines. Physicians have gone to prison for submitting false health care claims. The Office of Inspector General (OIG) may also impose administrative civil monetary penalties for false or fraudulent claims. The Anti-Kickback Statute (AKS) prohibits offering or accepting kickbacks intended to generate healthcare business. Violation of the AKS is a felony, punishable by ten years in jail and fines of $100,000 per violation. The AKS also applies to both sides of the kickback arrangement, covering both the payers and recipients of kickbacks.
The Physician Self-Referral Law, commonly referred to as the Stark Law, prohibits physicians from referring patients to receive "designated health services" payable by Medicaid from entities with which the physician or an immediate family member has a financial relationship, unless an exception applies. Financial relationships include both ownership/investment interests and compensation arrangements. The Stark Law is a strict liability statute, meaning that proof of specific intent to violate the law is not required. Submitting claims in violation of the law's restrictions on referrals is prohibited.
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Violations of the Civil False Claims Act
The False Claims Act (FCA) is a federal law that allows the government to pursue perpetrators of fraud. It also allows private citizens to file suits on behalf of the government (called "qui tam" suits) against those who have defrauded the government. Under the FCA, private citizens who successfully bring qui tam actions may receive a portion of the government's recovery.
The FCA provides that any person who knowingly submits, or causes to submit, false claims to the government is liable for three times the government's damages plus a penalty that is linked to inflation. FCA liability can arise when someone:
- Knowingly uses a false record material to a false claim
- Improperly avoids an obligation to pay the government
- Conspires to commit any of these acts
Violations of the FCA can result in civil monetary penalties and sometimes exclusion for a wide variety of conduct. Penalties range from $10,000 to $50,000 per violation. Some examples of FCA violations include:
- Presenting a claim that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent
- Presenting a claim that the person knows or should know is for an item or service for which payment may not be made
- Failing to provide an adequate medical screening examination for patients who present to a hospital emergency department with an emergency medical condition or in labour
In addition, filing false claims may result in fines of up to three times the programs' loss plus $11,000 per claim filed. Under the civil FCA, each instance of an item or a service billed to Medicare or Medicaid counts as a claim, so fines can add up quickly.
The Anti-Kickback Statute (AKS) is a federal criminal law that prohibits the knowing and willful payment of "remuneration" to induce or reward patient referrals or the generation of business involving any item or service payable by Federal healthcare programs (e.g. Medicare or Medicaid). Remuneration includes anything of value and can take many forms besides cash, such as free rent, expensive hotel stays and meals, and excessive compensation for medical directorships or consultancies. The AKS applies to both sides of the kickback arrangement, covering both the payers and recipients of kickbacks. Violation of the AKS is a felony, punishable by up to ten years in jail and fines of $100,000 per violation.
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The Anti-Kickback Statute's intent element
The Anti-Kickback Statute (AKS) is a federal criminal law that prohibits offering or accepting kickbacks intended to generate healthcare business. The AKS is a popular name for The Medicare and Medicaid Fraud and Abuse Statute, 42 U.S.C. § 1320a-7b(b). It is a felony to violate the AKS, punishable by ten years in jail and fines of $100,000 per violation.
The AKS prohibits paying remuneration to doctors when referring patients to things paid for by health insurance, such as drugs, tests, equipment, and specialists. It also prohibits remuneration to patients when choosing to buy or lease things paid for by health insurance and to procurement staff when selecting supplies for organisations.
The AKS defines "remuneration" as transferring anything of value in any form or manner. This includes cash, free rent, expensive hotel stays, meals, and excessive compensation for medical directorships or consultancies.
The intent element of the AKS is satisfied when one purpose of the remuneration is to induce referrals or purchases. This means that the AKS only applies when the kickback is intended to reward or induce the referring, buying, or leasing of goods or services. The statute covers both the payers and recipients of kickbacks, and each party's intent is a key element of their liability under the AKS.
The AKS applies to all sources of referrals, including patients. For example, in the context of Medicare and Medicaid copays, it is generally required to collect copayments from patients. Routines waiving of these copayments could implicate the AKS, and advertising that copayments will be forgiven is prohibited. However, it is permissible to waive a copayment if it is determined that the patient cannot afford it or if reasonable collection efforts are unsuccessful.
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Frequently asked questions
The Anti-Kickback Statute (AKS) is a federal criminal law that prohibits offering or accepting kickbacks intended to generate health care business. It applies to doctors, patients, procurement staff, and marketing/advertising/sales personnel.
Yes, it is illegal to participate in a scheme to offer or receive kickbacks in connection with the furnishing of items or services billable to the Medicaid program in New Jersey. Violation of the AKS is a felony, punishable by up to 10 years in jail and fines of $100,000 per violation.
Remuneration can include anything of value, such as cash, free rent, expensive hotel stays, meals, or excessive compensation.
Violation of the AKS in New Jersey can result in criminal penalties, civil fines, exclusion from Federal health care programs, or loss of a medical license. It is punishable by up to 3 years in prison and a $10,000 penalty.
