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Transcript for audio podcast:
Federal Anti-kickback Statute

From the Office of Inspector General of Department of Health & Human Services

http://www.oig.hhs.gov

My name is Meredith Williams. I am an attorney with the Office of Inspector General. Many people ask us what is the Federal Anti-Kickback Statute and how could it affect me?

Here are the four most important things you need to know about the kickback statute. Number One: You should know what the Anti-kickback Statute prohibits. Number Two: You should know the penalties under the law. Number Three: You should know the types of programs the law covers. And Number Four: You should know that the law has numerous safe harbors. Let's start with Number One: What does the law prohibit? Under the Federal Anti-kickback Statute you may not knowingly and willfully offer, pay, solicit or receive anything of value to induce or reward for referrals of Federal health care program business. In some industries, it is acceptable to reward those who refer business to you. In health care however, it's a crime. The prohibition against kickbacks applies to those who pay for referrals and to those who receive them. Kickbacks can take various forms, for example, they can be bribes or rebates. They can be given in cash or in kind. Here is an example of an arrangement that would be problematic under the Federal Anti-kickback Statute. If a medical device manufacturer gives lavish vacations, gifts, or sham "consulting fees" to an orthopedic surgeon to reward the physician for using its devices during surgery, now that, would be suspect under the kickback statute. In schemes like this, the Government may prosecute the physician who received the kickbacks as well as the manufacturer who paid them. Number Two: What are the penalties? There are criminal and civil penalties for violating the law. Let's start with the criminal penalties. Violating the Anti-Kickback Statute is a felony, which means violators can go to jail. Conviction can result in fines up to $25,000 per violation, up to a 5-year prison term, or both. Now let's go over the civil and administrative penalties. Kickback violations can lead to False Claims Act liability. The False Claims Act is a civil statute. It provides a way for the government to recover money, through a lawsuit in Federal court, when someone submits false or fraudulent claims to the government. A provider can be penalized up to three times the government program's loss, plus $11,000 per claim. That's a lot of money and the penalties can add up quickly. Kickbacks can also lead to program exclusion. OIG may exclude violators of the kickback statute from participating in Federal health care programs under our exclusion authorities. Lastly, kickbacks can lead to penalties under the Civil Monetary Penalties Law. Under the law, OIG may subject party, through administrative proceedings, to a $50,000 civil monetary penalty per violation and an assessment of up to 3 times the total amount of the kickback payment, even if some part of the payment was for a legitimate purpose. Number Three: Does the law apply to all referrals? No. The Federal Anti-kickback Statute prohibits rewarding referrals or generating Federal health care program business. This means that the law only applies to Federal health care programs. These programs are defined in the law. Two examples are Medicare and Medicaid. Therefore, a referral from anyone for items and services covered by Medicare or Medicaid would implicate the Federal Anti-kickback Statute. Number Four: Are there any exceptions? Yes. We call them safe harbors rather than exceptions. There are a number of "safe harbors" to the law. When you structure your arrangement to fit in a safe harbor you are protected from liability. Some examples of common business practices that may fit in a safe harbor are employment arrangements or space and equipment leases. Compliance with a safe harbor is purely voluntary. But doing so provides assurance that your business practices will not be subject to liability.

Now you've learned four important things every health care provider should know about the Federal Anti-kickback Statute.

What's often a common practice in other industries can be a crime when you are talking about the Medicare and Medicaid programs.

Save yourself from potentially severe penalties.

Review the statute and regulations or consult with your health care counsel for more information.

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