What is the Anti-Kickback Law?

The Anti-Kickback Law prohibits medical providers from offering or accepting “remuneration” in exchange for referrals of items or services covered by Medicare, Medicaid, and other federal healthcare programs.  The basic idea of the law is that healthcare decisions should be made by patients and their doctors, free of influence from third-party payments.

For example, a pharmaceutical company cannot pay doctors to prescribe certain drugs to Medicare patients.  Kickbacks (i.e., the “remuneration”) can be anything of value, such as gifts, expensive meals, free medical equipment, or payments disguised as “speaker fees.”  Remuneration can also take subtler forms, such as waiving patient co-pays in an effort to cause them to buy a certain prescription drug or service. 

The government must prove that the defendant knowingly offered or received the kickback in exchange for a decision about medical care paid for by the federal government.  Violations are a federal a crime.  But any claim for payment that results from a kickback also gives rise to civil liability under the False Claims Act (FCA).  That means that the government can sue for treble damages and other penalties. 

Certain safe harbors exist.  For example, the salaries a healthcare company pays to its employees are not kickbacks.  Healthcare companies can also offer patients discounts and rebates, provided they are reported to the government.  And hospitals and other medical facilities can rent space to doctors, pharmacies, and testing laboratories, so long as they charge a market price.  

The Anti-Kickback Statute has resulted in significant government enforcement actions.  For example, one pharmaceutical company paid $678 million to settle FCA cases involving alleged kickbacks in the form of lavish events intended to induce doctors to prescribe the company’s drugs. 

To learn more about the False Claims Act and other whistleblower programs, go to www.mololamken.com and follow us on LinkedIn.  “Brilliant lawyers with courtroom savvy” — Benchmark Litigation.  Copyright MoloLamken LLP 2023.