Anti-Kickback Regulatory Compliance

Fuerst Ittleman David & Joseph’s health care regulatory compliance and corporate law attorneys have experience in structuring arrangements and transactions to comply with the Anti-Kickback law. Our firm can also provide assistance with investigating possible violations of the Anti-Kickback law, which exist in your organization and in advising clients on corrective and remedial actions.

Generally speaking, the federal Anti-Kickback law, found at 42 U.S.C. § 1320a-7b(b), is a criminal statute that prohibits the offering, paying, soliciting or receiving of anything of value to induce or reward referrals, or to generate federal health care program business. The Anti-Kickback law is a criminal statute that is broadly defined, and establishes penalties for individuals and entities on both sides of the prohibited transaction.

1. Anti-Kickback Law Prohibited Referrals

The Anti-Kickback law is a criminal statute that prohibits the knowing and willful offer, or payment of, and the knowing solicitation or receipt of “any remuneration directly, or indirectly, overtly or covertly, in cash or in kind,” to induce:
1) referrals of patients
2) the purchasing, leasing, ordering, or arranging for any good, facility, service or item paid for by a federal health care program (including Medicare and Medicaid).

While the Anti-Kickback law requires a knowing and willful violation of the law to establish liability, with the passage of the Patient Protection and Affordable Care Act, the Anti-Kickback law was amended to make clear that actual knowledge of an Anti-Kickback violation or the specific intent to commit a violation of the Anti-Kickback law is not required for conviction. Although the government is no longer required to prove that a defendant intended to violate the Ant-Kickback law itself, it must still prove that a criminal defendant intended to violate the law.

2. Potential Penalties

Anti-Kickback law violations can subject a violator to criminal, civil, and administrative penalties. The Anti-Kickback law establishes that a violation of the law is a felony and can be punished by up to five years in prison and a fine of $25,000 per violation. Further, violators can be assessed civil monetary penalties of up to $50,000 per violation, and face an additional civil assessment of up to three times the amount of the kickback received.

In addition, Anti-Kickback law violations can result in the Secretary of Health and Human Services excluding a violator exclusion from acting as participating provider in a federal health care program. The effect of such an exclusion is that a provider can no longer receive payment for services from any federal health care program (including Medicare, Medicaid, and Tricare, among others) for services rendered. The Anti-Kickback law provides for mandatory exclusion if a violator is criminally convicted. Even negligent violations, which would not amount to criminal liability, can still result in a provider’s exclusion at the discretion of the Secretary.

3. Anti-Kickback Law Safe Harbors

Due to the potential broad reach of the Anti-Kickback law into numerous transactions, the Office of Inspector General (OIG) of the United States Department of Health and Human Services has been granted authority to promulgate regulations, which exclude certain specific business and financial practices from criminal and civil prosecution under the act. These exclusions, known as “safe harbors,” are found at 42 C.F.R. § 1001.952.

For example, Anti-Kickback safe harbor transactions include, in part:
1) investment interests
2) space rental
3) equipment rental
4) personal services and management contracts
5) referral services
6) payments to bona fide employees
7) physician recruitment efforts.

However, each safe harbor imposes precise and lengthy conditions for compliance in order for a transaction to fall within its scope. Thus, practitioners must evaluate each such transaction to ensure compliance.

Transactions which are neither specifically excluded or covered under a safe harbor regulation are not violations of the Anti-Kickback law per se. Instead, OIG evaluates such transactions on a case-by-case basis. In addition, parties who are uncertain whether their arrangements qualify for a safe harbor can request an advisory opinion from OIG.

The health law attorneys of Fuerst Ittleman David & Joseph have extensive experience handling the various regulatory and compliance issues surrounding the provision of Medicare and Medicaid services, including False Claims Act (qui tam cases) as well as violations of the Anti-Kickback and Stark self-referral laws, among others.

Our health care regulatory compliance and corporate law attorneys have experience in structuring arrangements and transactions to comply with the Anti-Kickback law. In addition, Fuerst Ittleman David & Joseph’s health care regulatory compliance attorneys have experience in reviewing and analyzing proposed transactions and arrangements to identify potential Anti-Kickback law pitfalls. We can also provide assistance with investigating possible violations of the Anti-Kickback law which exist in your organization, and in advising clients on corrective and remedial actions. When necessary, we can provide aggressive, experienced litigation services in civil and criminal actions related to these areas. Fuerst Ittleman David & Joseph also handles provider acquisitions and offers strategic tax planning advice to health care providers and suppliers.

Fuerst Ittleman David & Joseph’s health care practice group combines experienced lawyers and consultants from several practice areas to provide comprehensive representation in all aspects of health care law. Let us show you how we can help today.
For more information, please contact us at contact@fuerstlaw.com or call us directly at 305-350-5690.