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Unlike Stark, violations of anti-kickback statutes ("AKS") can lead to CRIMINAL penalties, including felony charges. This makes advising clients on such matters of fraud and abuse very critical.
The anti-kickback statute (42 C.F.R. § 1001.952) makes it a crime for a health care provider to knowingly and willfully solicit, receive, offer, or pay remuneration of any kind to induce referrals of Medicare or Medicaid business. A recruitment agreement can violate the statute if it appears to provide any payments in exchange for referrals of Medicare or Medicaid patients. A violation may result in a fine of up to $25,000 and three times the illegal remuneration, and/or imprisonment for up to five years for each offense, exclusion from participation in federal health care programs such as Medicare or Medicaid, and/or other civil penalties. Moreover, the IRS has held that a tax-exempt hospital that violates the law could lose its tax exemption. A determination of guilt or liability requires a higher threshold of culpability. A violator or violating entity must possess a knowing or willful level of intent. |
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While Stark has many exceptions, AKS has many safe harbor provisions with statutes governing many of them extensively. Case by case we analyze if and how a safe harbor applies. Such safe harbors include, but are not limited to:
- investment interests - space and equipment rental - personal services and management contracts - sale of practice - referral services - warranties and discounts - group purchasing organizations - increased coverage, reduced cost-sharing amounts, or reduced premium amounts offered by health plans - price reductions offered to health plans - practitioner recruitment - obstetrical malpractice insurance subsides - investments in group practices - cooperative hospital service organizations and ambulatory surgery centers - referral arrangements for specialty services - price reductions offered to eligible managed care organizations - electronic prescribing as well as electronic health records items and services A transaction that falls outside of a safe harbor is not per se illegal but will be evaluated on its facts. We assess each case carefully for critical determination. |
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