Anti-Kickback Statute: What Counts as an Illegal Kickback
The Anti-Kickback Statute, 42 U.S.C. 1320a-7b(b), makes it a criminal offense to knowingly offer, pay, solicit, or receive anything of value to induce referrals of items or services payable by a federal healthcare program. A claim resulting from a kickback is automatically a false claim.
Anything of value is broader than cash
The statute reaches remuneration in any form. Cases have been built on speaker fees, consulting arrangements, free staffing, discounted rent, meals, travel, research grants, and equity opportunities.
The test is not whether the payment looked legitimate on paper. It is whether one purpose of the arrangement was to induce referrals. Courts have held that a single improper purpose is enough even when the arrangement has other, genuine purposes.
The link to the False Claims Act
Congress amended the statute in 2010 to state that a claim resulting from an Anti-Kickback Statute violation is a false claim for False Claims Act purposes. This closed an argument defendants had been making and made the kickback theory one of the most common in qui tam practice.
The practical effect is that a kickback arrangement exposes the parties to treble damages and per-claim penalties on every claim that flowed from it.
Safe harbors and where they fail
Regulations define safe harbors that protect specific arrangements, including some personal services contracts, space and equipment rentals, and discounts. An arrangement that fits a safe harbor entirely is protected.
Failures usually come from the details. Compensation that exceeds fair market value, terms that vary with referral volume, agreements that are not in writing, and arrangements that were never followed in practice are the recurring problems.
How kickback cases surface
These cases are almost always brought by insiders, because the arrangement is documented internally and invisible outside. Sales representatives, practice managers, compliance staff, and physicians who declined to participate are the most common relators.
Our attorneys have recovered on kickback theories in home health referrals and in a pharmaceutical matter involving payments to prescribers.
Frequently asked questions
What is the difference between the Anti-Kickback Statute and the Stark Law?
The Anti-Kickback Statute is criminal, requires intent, and covers all federal healthcare program referrals. The Stark Law is civil, applies strict liability, and covers physician referrals for designated health services. Conduct often violates both.
Does a kickback have to change anyone’s decision?
No. The offense is complete when the payment is made or solicited with the required intent. Proof that a specific referral was actually redirected is not required.
Are speaker programs illegal?
Not inherently. They become a problem when attendance is thin, the content is repetitive, the honoraria are above market, or the speakers are chosen by prescribing volume. The Department of Justice has brought several cases on exactly these facts.
The attorneys who handle these cases
Related reading
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