Up to date: A Survey of Well being Care Anti-Kickback Regulation on the State Degree – UPDATED June 2023 | Lowenstein Sandler LLP

The federal well being care Anti-Kickback Statute (Federal AKS) targets bribery and corruption within the well being care business. There are two core provisions of the Federal AKS: one focusing on the bribe recipient and one focusing on the bribe payer. Particularly, the statute prohibits receiving “any remuneration . . . in return for” well being care referrals or purchases reimbursable beneath a federal medical insurance program, reminiscent of Medicare.(1) And it prohibits paying any remuneration “to induce” well being care referrals or purchases reimbursable beneath such a federal program.(2)

The Federal AKS is an extremely far-reaching regulation giving federal enforcement businesses an arsenal of weapons to focus on questionable enterprise preparations within the well being care business. The time period “remuneration” is outlined open-endedly to imply “something of worth.”(3) And “something of worth” means simply that: There isn’t any de minimis remuneration beneath the Federal AKS.(4) To show a violation of the statute, the federal government want solely display that one of many many potential functions of paying remuneration was the inducement of the acquisition of the federally reimbursable items or providers.(5) Moreover, courts typically won’t interact in a “splitting of hairs” relating to discerning the which means of phrases reminiscent of “refer” and “advocate,” relying as an alternative on the broad, prophylactic functions of the statute.(6) Additionally, the plain language of the Federal AKS suggests {that a} quid professional quo is pointless for a payer of remuneration (i.e., a bribe payer) to violate the statute, elevating the chance {that a} well being care firm, supplier, or particular person may violate the statute just by paying cash to induce product utilization, even when the recipient has not agreed to make use of the product in return for the cash (i.e., even when the recipient of the “bribe” doesn’t know she or he is being bribed).(7)

Given the expansive attain of the Federal AKS, there are a variety of statutory and regulatory exceptions and “secure harbors” to the regulation. For instance, the statute’s restrictions don’t apply to “a reduction or different discount in value” if numerous necessities are met.(8) Likewise, “bona fide employment relationship(s)” are insulated from the statute’s prohibitions,(9) as are “private providers and administration contracts,”(10) in addition to formal “referral providers.”(11) However even these secure harbors sometimes have quite a few and cumbersome necessities, and if every such requirement will not be strictly met, the conduct is topic to prison prosecution or different enforcement measures.

Compliance with the Federal AKS is one thing of an business unto itself, however the federal statute represents solely a part of the chance for well being care firms, suppliers, and people. All however one of many 50 states, in addition to the District of Columbia, have analogous industrial bribery legal guidelines on the books that focus on corruption within the well being care business.(12) And of those 51 jurisdictions, 35 proscribe kickbacks and the like within the well being care business even when the products or providers are reimbursable solely by non-public medical insurance and contain no public cash in any respect. These extra state legal guidelines and rules thus usually attain far past their federal counterpart.  Accordingly, any full and fulsome evaluation of a person’s or entity’s anti-kickback publicity essentially requires separate consideration of those state regulation analogues.

Access the State Health Care Anti-Kickback Analogues survey.

*Chart displays updates as of June 12, 2023.

(1) 42 U.S.C. § 1320a-7b(b)(1).
(2) 42 U.S.C. § 1320a-7b(b)(2).
(3) E.g, United States v. Narco Freedom, Inc.95 F. Supp. 3d 747, 756 (S.D.N.Y. 2015) (citing Klaczak v. Consol. Med. Transp.458 F. Supp. 2nd 622, 678 (N.D. In poor health. 2006)).
(4) See Medicare and State Well being Care Packages: Fraud and Abuse; Revisions to the Secure Harbors Below the Anti-Kickback Statute and Civil Financial Penalty Guidelines Relating to Beneficiary Inducements, 81 Fed. Reg. 88368, 88379 (Dec. 7, 2016) (“(T)he anti-kickback statute doesn’t have any exceptions for objects or providers of nominal worth.”); Medicare and State Well being Care Packages: Fraud and Abuse; OIG Anti-Kickback Provisions, 56 Fed. Reg. 35952, 35954 (July 29, 1991) (rejecting commentators’ name for de minimis secure harbor).
(5) See, e.g., United States v. Nagelvoort856 F.3d 1117, 1130 (seventh Cir. 2017); United States v. Borrasi639 F.3d 774, 781-82 (seventh Cir. 2011); United States v. Kats871 F.2nd 105, 108 n.1 (ninth Cir. 1989); United States v. Greber760 F.2nd 68, 71-72 (3d Cir. 1985); Polk County v. Peters800 F. Supp. 1451, 1455-56 (E.D. Tex. 1992) (holding that an settlement by a hospital to present a health care provider an interest-free mortgage in alternate for the physician’s unique use of the hospital for his sufferers was unlawful and thus unenforceable, however that “the hospital might effectively have been motivated to a larger or lesser diploma by a reputable need to make higher medical providers accessible to the group”).
(6) United States v. Polin194 F.3d 863, 866 (seventh Cir. 1999) (upholding conviction of defendants working a pacemaker monitoring firm who supplied to pay a pacemaker gross sales consultant to direct sufferers to the corporate, though the gross sales consultant was not the last word decision-maker on which firm was chosen to observe the pacemaker); see additionally United States v. Patel778 F.3d 607, 612-16 (seventh Cir. 2015) (rejecting a doctor-defendant’s argument {that a} “referral” can’t by definition happen when a affected person “independently chooses a supplier” with none “enter from the doctor,” reasoning that the aim of the statute extends the which means of “referral” to the doctor-defendant’s certifications and recertifications of medical necessity for providers supplied by a house well being care service that was paying him kickbacks); cf. OIG Advisory Op. No. 99-8, July 13, 1999 (referring loosely to new sufferers of podiatrists obtained because of free screenings at shoe shops as “referrals”).
(7) See Hanlester Community v. Shalala51 F.3d 1390, 1397 (ninth Cir. 1995); Bathtub in. Vista Hosp. Sys., Inc.No. 233623, 1993 WL 597402, at *7 (Cal. Tremendous. Ct. Riverside Cty. Nov. 15, 1993) (discovering that an settlement might be illegal even when just one occasion has the improper intent).
(8) 42 U.S.C. § 1320a-7b(b)(3)(A); 42 C.F.R. § 1001.952(h).
(9) 42 U.S.C. § 1320a-7b(b)(3)(B); 42 C.F.R. § 1001.952(i).
(10) 42 C.F.R. § 1001.952(d).
(11) 42 C.F.R. § 1001.952(f).
(12) A few of these are arguably much more onerous than the federal regulation. E.gN.J. Admin. Code § 13:45J-1.3(c) (prohibiting a doctor from accepting from a pharmaceutical firm “any merchandise of worth that doesn’t advance illness or remedy schooling,” together with “pens, be aware pads, clipboards, mugs, or different objects with an organization or product brand, (in addition to) floral preparations”).