Kickback Statutes

What is the Anti-Kickback Statute?

The AKS was initially enacted in 1986 as part of the Omnibus Budget Reconciliation Act of 1987. It provides that any person who knowingly and willfully offers or pays any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in-kind to any person to induce such person to refer an individual to a person for furnishing services under a Federal health care program shall be subject to fine or imprisonment not exceeding ten years, or both.

Kickbacks are illegal under the AKS because they involve payments made by providers to individuals who refer them to business. This includes kickbacks paid directly to physicians, nurses, pharmacists, dentists, physical therapists, chiropractors, psychologists, social workers, hospitals, clinics, etc.

What are the Limitations of the Anti-kickback Law?

It’s important to note that AKS applies only to Medicare and Medicaid payments. So if you’re working with private insurance companies, it doesn’t apply. But if you’re doing business with any government agency, including Medicare and Medicaid, then you should be aware of this law.

Key Differences Between the AKS and the Stark Law

The AKS and the Stark law are different statutes. Under the AKS, it is illegal to pay someone to refer business to a healthcare provider. Under the Stark Law, it is unlawful to give physicians who refer patients to your company. 

Examples of Unlawful Kickbacks and Financial Arrangements under the Anti-Kickback Statute and the Stark Law

The AKS makes it illegal for anyone to pay or give something of value to a doctor or hospital to influence them to refer patients to a particular service provider. It applies to both physicians and hospitals.

Under the AKS, it does not matter whether the payment is direct or indirect. For example, if a drug manufacturer gives a physician $10,000 to recommend their product to his patients, that would be considered an illegal kickback. If the same drug manufacturer instead gave the physician $5,000 in free office supplies, that would also be regarded as an illegal kickback.

Classic Examples of Violations of Anti-kickback and Stark laws

• A violation of the AKS would be if a doctor prescribes a drug to a patient, but then offers to refer the patient to a pharmacy where he will receive a kickback from the pharmacist for each prescription written. This is illegal under both the AKS and the Stark law.
• A violation of either the AKS or the Stark law would be a pharmaceutical company giving a physician $100,000 to write a specific number of prescriptions for its drugs. That would be considered a violation of the AKS law because it is designed to encourage the physician to prescribe more of the company’s products.
• Another example of a violation of both the AKS and Stark law would be if the same pharmaceutical company offered to pay the physician $50,000 per year to come work at their facility as a consultant. That would be illegal under both the AKS law and the Stark law. In addition, the consulting arrangement would have to be disclosed on all forms required by the IRS.

Do You Have an Anti-Kickback Statute Violation to Report? 

Our whistleblower lawyers can represent your Anti-Kickback Statute Whistleblower Case, and we offer free consultations for all whistleblower lawsuit cases. For more information, you can contact The Whistleblower Advocates at (833) 310-3147 for a FREE, confidential consultation.