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.
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.
Click below for more information on our Healthcare Law practice:
Anti-Kickback Statutes and Fraud and Abuse
Recovery Audit Contractors and other Government Audits
Insurance Coverage and Other Forms of Reimbursement
HIPAA and Advances in Health Information Technology
Medical Malpractice Defense
Running Your Own Practice