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The Anti-Kickback Statute

December 1, 2023

The Anti-Kickback Statute (AKS) is a formidable law designed to curb unscrupulous practices in the healthcare industry that can garner just compensation for insiders who blow the whistle on the conduct using the False Claims Act through a whistleblower law firm. This statute unequivocally prohibits any knowing and willful payment of “remuneration” intended to induce or reward patient referrals or the generation of business related to services or items covered by Federal healthcare programs like Medicare or Medicaid. Remuneration, a broad term, encompasses anything of value, extending far beyond cash transactions.

Examples of remuneration include free rent, lavish hotel stays, extravagant meals, and excessive compensation for roles like medical directorships or consultancies. The anti-kickback law’s inception was primarily driven by concerns that healthcare professionals might provide unnecessary care in exchange for financial gain, potentially harming patients, and squandering taxpayers’ dollars. In this article, we delve into the AKS, exploring its implications, common categories to be on the lookout for illegal healthcare kickbacks, and the potential for private citizens to file qui tam lawsuits based on AKS violation utilizing the False Claims Act

The Anti-Kickback Statute

Understanding the Anti-Kickback Statute

  1. The Prohibited Conduct

The AKS unequivocally prohibits the knowing and willful exchange of “remuneration” to incentivize patient referrals or foster business activities associated with Federal healthcare programs. These programs cover a wide range of services and items, such as drugs, medical supplies, and healthcare services for Medicare or Medicaid beneficiaries. Intent to violate the statute can be demonstrated through deliberate ignorance or reckless disregard for the truth. Remuneration takes numerous forms and extends well beyond cash transactions, including exorbitant compensation for various roles and non-monetary perks. Kickbacks are notably more discreet than bribes, and entail benefits well beyond market value in healthcare, such as offering a certain sum of money in exchange for every patient obtained.

  1. The Liability Spectrum

Under the AKS, responsibility for an impermissible kickback relationship is ascribed to both parties involved. This means that not only those offering kickbacks but also those accepting them may be held liable for violations. Illegal remuneration includes a wide array of forms, such as cash, rebates, gifts, above- or below-market rent or lease arrangements, discounts, free services, or equipment, and essentially anything else of value.

Common Categories of Illegal Healthcare Kickbacks You Should Look For

  1. Pharmaceutical Kickbacks

Pharmaceutical kickbacks encompass illegal inducements related to prescribed drugs and biologics. Any payments or incentives offered to healthcare professionals in exchange for prescribing or using specific pharmaceutical products fall under this category. Further, oftentimes, pharmaceutical companies will pay for extravagant vacations or sporting events or other activities based on quantity of prescriptions or may offer bogus speaking arrangements that are just correlated to the quantity of scripts rather than the quality of content.

  1. Surgical Kickbacks

Surgical kickbacks involve payments or benefits given to healthcare providers in exchange for using or recommending surgical equipment and supplies. This extends to devices, implants, and neuromonitoring services.

  1. Medicaid Kickbacks

Medicaid kickbacks refer to payments made to healthcare providers as an incentive for referring products or services that are billed to Medicaid programs. These violations are particularly detrimental to the Medicaid system and its beneficiaries.

  1. Medicare Kickbacks

Like Medicaid kickbacks, Medicare kickbacks involve payments or benefits offered to healthcare providers in exchange for referrals related to products or services billed to the Medicare program. This unethical practice undermines the integrity of the Medicare system.

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Recent Examples of AKS Violations

  1. Pharmacy Owner Convicted of Payment of Illegal Kickbacks and Money Laundering- https://www.justice.gov/opa/pr/pharmacy-owner-convicted-payment-illegal-kickbacks-and-money-laundering 2. Two Men Plead Guilty to $67M Medicare Fraud Scheme- https://www.justice.gov/opa/pr/two-men-plead-guilty-67m-medicare-fraud-scheme
  2. Man Convicted of $54M Bribery and Kickback Scheme Involving Fraudulent Prescriptions- https://www.justice.gov/opa/pr/man-convicted-54m-bribery-and-kickback-scheme-involving-fraudulent-prescriptions

Whistleblower Awards and the Anti-Kickback Statute

The False Claims Act’s qui tam provisions allow whistleblowers to receive a percentage of the money recovered as a whistleblower reward for their efforts of up to 30%., unless in the state of Tennessee, or the Virgin Islands, in which case potential monetary incentives can go as high as 50% if it implicates state funds and the government fails to intervene. Our anti-kickback whistleblower lawyers file lawsuits under qui tam provisions, which provide enticing monetary incentives to the whistleblowers who are aware of Healthcare Fraud to come forward with such information.

Becoming a False Claims Act Whistleblower under the Anti-Kickback Statute

The Anti Kickback statute, detailed in 42 U.S.C. §1320a-7b(b)(1), establishes stringent prohibitions against the exchange of anything of value with the intention to influence an individual:

“(A) to refer an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a federal health care program, or

(B) to purchase, lease, order, or arrange for or recommend purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under a federal health care program.”

Congress has taken a resolute stance in curbing such practices. Violating this statute is considered a felony, and those found guilty can be subjected to penalties of up to 5 years in prison and a $25,000 fine, as well as subject to civil remedies under the FCA.

As a whistleblower, you are empowered to initiate legal action under the False Claims Act through the use of a whistleblower law firm. As of 2019, over 71% of all FCA actions were initiated by whistleblowers. Your courageous step can help ensure that pharmaceutical companies, health care practitioners and defense contractors don’t engage in the illicit exchange of kickbacks. Such practices ultimately burden the healthcare system and the taxpayer by inflating costs, and your action can be instrumental in upholding integrity and transparency in the healthcare industry and the defense contractor realm.

Anti-kickback laws in healthcare serve as a vital safeguard against unethical practices in the healthcare industry, safeguarding patient interests and taxpayer funds. By identifying and reporting violations of the AKS, whistleblowers can play a pivotal role in maintaining the integrity of the healthcare system along with getting a whistleblower reward. To assess how you can hold individuals that engage in kickbacks accountable you should speak with experienced Anti-Kickback Lawyers today to explore your legal options.