Federal Anti-Kickback Statute – 42 U.S.C. § 1320a-7b

Understanding the Federal Anti-Kickback Statute

The Federal Anti-Kickback Statute (AKS), codified at 42 U.S.C. § 1320a-7b, makes it a federal crime to knowingly and willfully offer, pay, solicit, or receive remuneration in exchange for referring patients or generating business reimbursed by federal healthcare programs.

Federal Anti-Kickback Statute – 42 U.S.C. § 1320a-7b

The statute was created to combat fraud and abuse within federally funded healthcare programs such as Medicare and Medicaid.

The law targets financial arrangements that improperly influence medical decision-making and lead to unnecessary services, inflated costs, or fraudulent billing.

Violations of the Anti-Kickback Statute frequently arise during federal healthcare fraud investigations and may be charged alongside other federal offenses such as conspiracy, false claims, or wire fraud.

If you are under investigation or have been charged with violating the Anti-Kickback Statute, you should speak with an experienced federal criminal defense lawyer immediately. These cases are complex and often involve extensive government investigations.

Medicaid investigations may take months or even years, depending on the case's complexity, the amount of evidence, and whether they are conducted at the state or federal level.

Your best chance for a favorable outcome is with a federal defense attorney at Eisner Gorin LLP. To schedule a consultation, call (818) 781-1570 or contact us here.

What Is the Federal Anti-Kickback Statute?

The Anti-Kickback Statute prohibits the exchange of anything of value intended to influence patient referrals or healthcare service decisions that are reimbursed by federal healthcare programs.

In simple terms, the law makes it illegal to:

offer or pay a bribe or kickback for patient referrals
solicit or receive compensation for referring patients
provide payments in exchange for recommending medical services or products paid by federal programs.

Remuneration under the statute can include many forms of compensation such as:

cash payments
commissions or referral fees
gifts or entertainment
excessive consulting fees
free rent or discounted services.

The key issue in most cases is whether the compensation was intended to induce patient referrals or healthcare purchases funded by federal programs.

Key Elements of an Anti-Kickback Violation

To prove a violation of the Anti-Kickback Statute, federal prosecutors generally must establish two critical elements:

Remuneration Between Parties

There must be some form of payment or valuable benefit exchanged between individuals or entities involved in the referral or healthcare transaction.

Intent to Influence Referrals

The government must show the defendant knowingly and willfully engaged in the arrangement with the intent to influence patient referrals or generate federally reimbursed business.

Intent is often the most heavily contested element in Anti-Kickback prosecutions.

How the Anti-Kickback Statute Is Prosecuted

Anti-Kickback cases are commonly investigated by federal agencies such as:

the Department of Justice (DOJ)
the Department of Health and Human Services Office of Inspector General (HHS-OIG)
the Federal Bureau of Investigation (FBI).

Investigations often begin after suspicious billing patterns, whistleblower complaints, or audits reveal potential healthcare fraud.

Example of an Anti-Kickback Scheme

A common example involves a physician paying a third party for each patient referred to their clinic for services reimbursed by Medicare or Medicaid.

In this scenario:

the physician receives additional business paid for by federal healthcare funds
the individual referring patients receives compensation for those referrals.

This arrangement may constitute an illegal kickback under federal law.

Federal hospice fraud offenses involve the misuse of hospice care programs—primarily funded by Medicare—for illegal financial gain.

Anti-Kickbacks Involving Healthcare Products

The Anti-Kickback Statute also applies to the referral or sale of healthcare goods.

For example, a pharmacist or medical supplier who pays referral fees to individuals providing patients with expensive medical devices or prescription drugs may face criminal charges if those products are reimbursed by federal healthcare programs.

Safe Harbor Exceptions

Not every financial arrangement within the healthcare industry violates the Anti-Kickback Statute. Federal law includes several safe harbor provisions that protect legitimate business relationships.

Examples of safe harbor arrangements include:

properly disclosed discounts or price reductions
legitimate employee compensation agreements
certain contractual relationships that meet regulatory requirements.

If a financial relationship meets the conditions of a safe harbor, it may be exempt from Anti-Kickback liability.

Related Federal Healthcare Fraud Laws

Anti-Kickback violations are often charged together with other federal healthcare fraud offenses.

False Claims Act – 18 U.S.C. § 287

The False Claims Act makes it illegal to submit false or fraudulent claims for payment to the federal government. Kickback schemes often lead to fraudulent claims submitted to Medicare or Medicaid.

The False Claims Act Guide explains how the federal government and private whistleblowers can pursue claims against individuals, healthcare providers, contractors, corporations, and organizations that knowingly submit false claims for government funds or payments.

The types of activities covered under the FCA include submitting false claims for government payment, using false statements to obtain government funds, concealing obligations owed to the government, and participating in fraudulent billing schemes.

Federal assisted living fraud cases are aggressively prosecuted and often involve complex financial investigations targeting facility owners, administrators, healthcare providers, and affiliated businesses.

Physician Self-Referral Law (Stark Law)

The Stark Law prohibits physicians from referring Medicare patients for designated health services to entities in which they have a financial interest.

Criminal Penalties for Anti-Kickback Violations

Violating the Anti-Kickback Statute carries severe criminal penalties.

A conviction under 42 U.S.C. § 1320a-7b may result in:

up to 10 years in federal prison
fines of up to $100,000 per violation
exclusion from participation in federal healthcare programs.

In addition to criminal penalties, individuals may face civil penalties, professional discipline, and loss of medical licenses.

Federal Sentencing for Anti-Kickback Cases

Federal sentencing for healthcare fraud offenses is governed by the United States Sentencing Guidelines and federal sentencing statutes such as 18 U.S.C. § 3553(a).

Sentencing outcomes can vary depending on factors such as:

the amount of financial loss involved
the number of patients affected
the defendant's role in the scheme
prior criminal history.

Because federal sentencing calculations can be complex, experienced legal representation is essential.

Common Defenses to Anti-Kickback Charges

The appropriate defense strategy will depend on the specific facts of each case. However, several common legal defenses may apply.

Safe Harbor Protection

If the financial arrangement falls within one of the statute's safe harbor provisions, it may not constitute an illegal kickback.

Legitimate Compensation for Services

Payments made for legitimate services or business arrangements may not qualify as kickbacks if they were not intended to influence patient referrals.

No Federal Healthcare Program Involvement

The Anti-Kickback Statute applies only when referrals involve federal healthcare programs. If the arrangement did not involve Medicare, Medicaid, or another federal program, the statute may not apply.

Lack of Criminal Intent

Prosecutors must prove the defendant knowingly and willfully violated the law. If the defendant lacked intent to induce referrals, criminal liability may not exist.

Why You Need a Federal Healthcare Fraud Defense Lawyer

Healthcare fraud cases involving alleged kickbacks are highly complex and often involve large volumes of financial records, regulatory compliance issues, and expert testimony.

An experienced federal criminal defense attorney can:

review financial transactions and contracts
challenge the government's interpretation of compensation arrangements
evaluate potential safe harbor protections
negotiate with federal prosecutors before indictment.

Early legal representation can significantly impact the outcome of a federal investigation.

Frequently Asked Questions

What is the Federal Anti-Kickback Statute?

Overview of 42 U.S.C. § 1320a-7b

The Federal Anti-Kickback Statute is a federal law that prohibits offering, paying, soliciting, or receiving remuneration in exchange for referring patients or generating business that will be paid for by a federal healthcare program such as Medicare or Medicaid.

The purpose of the statute is to prevent fraud and abuse in federally funded healthcare programs.

What qualifies as a kickback under federal law?

Definition of remuneration

A kickback under federal law is anything of value offered or received to influence healthcare referrals. Remuneration can include cash payments, referral fees, gifts, bonuses, free services, discounts, or other financial incentives intended to generate federally reimbursed healthcare business.

What penalties apply for violating the Anti-Kickback Statute?

Criminal and financial consequences

A conviction for violating the Anti-Kickback Statute can result in severe penalties, including up to 10 years in federal prison, substantial fines, and exclusion from participation in federal healthcare programs.

Can healthcare providers be prosecuted under the Anti-Kickback Statute?

Liability for medical professionals

Yes. Physicians, pharmacists, hospital administrators, medical suppliers, and other healthcare providers can be prosecuted if they knowingly participate in illegal referral or compensation arrangements involving federal healthcare programs.

What are safe harbor provisions under the Anti-Kickback Statute?

Exceptions for legitimate business arrangements

Safe harbor provisions are regulatory exceptions that protect certain legitimate financial arrangements from being treated as illegal kickbacks if they meet specific legal requirements set by federal regulations.

Examples include certain employment relationships and properly disclosed discounts.

Can Anti-Kickback charges be defended in court?

Potential defense strategies

Yes. Defendants may challenge Anti-Kickback allegations by showing that the financial arrangement qualified for a safe harbor exception, demonstrating that the payments were legitimate compensation for services, or arguing that there was no intent to induce patient referrals.

Contact a Federal Healthcare Fraud Defense Lawyer

If you are under investigation or facing charges related to the Federal Anti-Kickback Statute, the consequences can be severe. A conviction may lead to substantial prison time, financial penalties, and professional consequences.

An experienced federal criminal defense attorney can analyze the details of your case, identify potential defenses, and work toward the best possible outcome. Early legal intervention is often critical in federal healthcare fraud investigations.

Our law firm has experience defending healthcare professionals against Anti-Kickback charges to protect their medical careers.

Eisner Gorin LLP is here to help. Schedule your consultation by calling (818) 781-1570 or using the contact form. Our law firm is based in Los Angeles.

Anti-Kickback Statute