Anti Kickback Statute – Cracking Down On Bribery

The Federal Anti Kickback Law went through congress in 1977 and has become one of the most important and talked about statutes within the health care industry. Why did the government feel it necessary to bring in the Anti Kickback statute?

It was felt that too many pay offs were being made within the health care industry, which covers Medicare, Medicaid and the private health sector. The growing concern was that those who had a large involvement in the health care industry could influence decisions in who provided services and supplies, perhaps unnecessarily or inappropriately.

The anti kickback statute is a criminal law and is therefore very broad and complex, it was deemed necessary to try and prevent corruption within the health care industry.

Are kickbacks illegal for healthcare referrals?

In short yes. The major part of the anti kickback statute concentrates on the area of referrals as this is the sector that has seen widespread corruption in the past. This legislation was put in place to make illegal, payment of any kind, whether that is a gift, a service or monetary reward for endorsing or recommending any product or drug. A previous scenario may have been that a large pharmaceutical company would willingly have paid huge amounts of money, particularly to foreign doctors, who in return would endorse their products. The anti kickback statute now makes this type of doing business completely illegal.

A weeks free holiday in the Bahamas, membership paid at the local golf club, forget it! All of these types of potentially illegal kickbacks if proved as bribes or payments in return for endorsements or recommendations will leave you in ‘deep water’.

The Punishment for breaking the anti kickback law

For those who break the anti kickback law, the punishment is severe, you may well be looking at a jail sentence, a criminal fine and even exclusion from your health care program like Medicare or Medicaid. This applies to either the giver or the recipient of gifts, whether monetary or otherwise.

Whistleblower protection.

The anti kickback statute has made provision for the protection of the whistleblower.

What or who is a whistleblower?

A whistleblower under the Dodd Frank Act of July 2011, passed by President Obama, is an individual or individuals whom pass on information to the Securities and Exchange Commission (SEC) with regard to irregularities within a company that may be deemed as defrauding the government. For example if a Doctors receptionist knew of a pharmaceutical company providing medical equipment to the surgery for free, in recompense for recommendations and or referrals, and she decided to inform on her employee she would be known as a whistleblower. The anti kickback statute has safeguards built in it, so that the employer would be unable to discriminate against the whistleblower by dismissing, suspending, harassing or threatening in any way.

It is not always necessary for gifts, money etc to have passed hands. If the intention alone was there and can be proved, this also would be a violation of the law. Proving intention is often very tricky but an experienced prosecuting lawyer would have a list of questions to help prove the case.

Safe Harbors

Safe harbours for anti kickback were an obvious necessity within this law; not all businesses operate illegally and not all business deals are fraudulent. It was felt that some perfectly legitimate deals could get caught in the anti kickback web, therefore the government adopted regulations called ‘safe harbors’.

The list is long and once again complex and only an experienced attorney could go over all the details in a specific area. For instance nursing and care homes are allowed to make referrals for services provided by other healthcare organisations and paid for by the government, such as:

• Laboratories, diagnostic and testing facilities.
• Hospitals, hospices or long term care homes.
• They are also allowed to receive referrals from hospitals, hospices, doctors, and other nursing or care homes.

This being said, the government will be closely scrutinising all business deals that receive payments, which may include referrals or services given. All must comply within the anti kickback statute.