What is the Anti-Kickback Statute and Who Does It Benefit?

medications-257333_1920When a medical professional is paid with money or receives other compensation in exchange for being influenced by or giving a company or person something they are looking for, it is considered a kickback. For instance, if a pharmaceutical company offers $15 for every script written for their medication or gives a doctor a free vacation in exchange for giving out samples of a product, it is considered a kickback.

Congress enacted a law back in 1977 to prohibit kickbacks to any medical provider in all forms. The law was created to address the concern over medical providers being influenced by companies when it comes to healthcare decisions. Specifically, the concern was decisions that were not necessary or appropriate would be made in order to meet quotas to receive the kickbacks. These efforts were made to work against lesser medical care due to the potential for kickbacks.

Anti-Kickback Statute, 42 U.S.C. ยง 1320a-7b(b)

The statute explicitly prohibits individuals and entities cannot accept or give payment that creates any type of reward for referring patients to, recommending or arranging any type of purchase that falls under payment made by a federally-funded health care program. Beyond working against bribes, the statute also protects against incentives or compensation that aims to encourage physicians to refer their patients for services to be reimbursed by a federally-funded healthcare program.

Illegal compensation includes: bribes, rebates, gifts, below market rent or lease agreements, discounts, services or equipment provided at below market prices, and cash that is either directly or indirectly given. Nearly all purchases by or between medical providers can be considered remuneration if it is given to influence medical decision making.

Safe Harbor Regulations

For practices that are unlikely to cause fraud or abuse, there are safe harbor regulations. These regulations put definitions to these practices to make them legal for medical providers. However, in order to qualify for safe harbor protection, the regulations must be exactly met with no exceptions. Some examples of safe harbors include space rental, equipment rental and personal services and management contracts that meet certain standards.

Filing a complaint for medical fraud can be complicated. Contact our team at Bochetto & Lentz today to get the experience and advice of a well-seasoned staff today.

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