Anti-Kickback Statute and The Stark Law

The Anti-Kickback Statute was enacted to protect patients and federally-sponsored healthcare programs, such as Medicare and Medicaid, from fraud and abuse by curtailing the corrupting influence of money on healthcare decisions. The primary purpose of the statute is to prevent kick-backs or payoffs to those who can influence healthcare decisions. In this regard, the statute removes potential economic incentives that could influence healthcare providers to refer or recommend medical goods and services that are medically inappropriate, medically unnecessary, of poor quality, or even harmful to a patient population. A violation of the Anti-Kickback Statute constitutes a false and fraudulent claim under the False Claims Act.

The Anti-Kickback Statute prohibits any person or entity from making or accepting payment to induce or reward any person for referring, recommending or arranging for the purchase of any item for which payment may be made under a federally-funded healthcare program. With some exceptions (both statutory and regulatory), the statute prohibits kickbacks, bribes, inducements, rewards, and other economic incentives and remuneration that induce physicians to refer patients for services or recommend purchase of medical supplies that will be reimbursable under government-funded healthcare programs, such as Medicare and Medicaid. Both sides of the kickback relationship are liable under the statute.

Compliance with the Anti-Kickback Statute is a precondition to participation as a healthcare provider under the Medicare, Medicaid, CHAMPUS/TRICARE, CHAMPVA, Federal Employee Health Benefit Program, and other federal healthcare programs. Accordingly, participating healthcare providers must certify that they have complied with the Anti-Kickback statute, in addition to other applicable laws, rules and regulations.

The Stark Law

The Stark Law was enacted to prevent physician self-referrals – that is, the referral of patients for designated health services that may be paid for by Medicare, Medicaid, or other state healthcare plans to any entity with which the referring physician has a financial interest or relationship. A violation of the Stark Law results in an overpayment, even if a party does not intend to engage in unlawful conduct. Although it is a separate statute, the Stark Law compliments the Anti-Kickback Statute – the Stark Law and the Anti-Kickback Statute refer to one another, and make compliance with one a requirement of complying with the other. Both are intended to prevent healthcare providers from taking actions for the purpose of financial benefit to themselves instead of for the patient’s benefit.

Through whistleblower lawsuits, private individuals have recovered substantial sums of money from healthcare providers who have violated the Anti-Kickback Statute. It is important, therefore, for whistleblowers to continue to expose those who take actions that benefit themselves at the expense of patients – actions that cost the government substantial sums of money. If you know or suspect that a healthcare provider doing business with a government-sponsored healthcare program, such as Medicare, Medicaid, CHAMPUS/TRICARE, CHAMPVA, and Federal Employee Health Benefit Program, is engaged in conduct that violates the Anti-Kickback Statute, please contact Michael S. Bigin or Laurence J. Hasson.