Anti-Kickback Statute & Stark Law in Healthcare

If you work in the medical industry, you need to know the meaning and consequences of accepting kickbacks.

If your employer is taking kickbacks, you may need to blow the whistle to protect consumers or the government from fraud.

This guide will help you understand what kickbacks are, what laws cover them, and when to speak to a lawyer about blowing the whistle.

The law defines kickbacks broadly.

Any type of remuneration for referrals may be investigated as a violation of the law.

Practices that have been prosecuted for violating kickbacks in the past include:

• Consulting fees paid to doctors: When health services, including hospitals, nursing homes, or dialysis centers, offer salaries or fees to doctors who can refer patients to their services, it may be considered a kickback. This is especially true in cases where the doctors are not expected to do much for their salaries or fees.
• Investment opportunities offered to doctors: When doctors are offered the chance to invest in a health service (especially with the understanding that they’ll provide referrals), their participation may be considered an illegal kickback.
• “Performance” bonuses offered to doctors: When doctors are rewarded with bonuses that are based on the number of services they order for their patients (For example, lab tests, x-rays), the bonus may be considered a kickback.
• Below-market rent offered to doctors: When hospitals offer heavily discounted office space or free access to administrative support staff to doctors who expect the doctor to provide more referrals, the rent may be considered a kickback.
• Favorable contracts offered to nursing homes: When nursing homes are offered favorable contracts by drug companies or therapists, with the expectation that they’ll prefer those partners for services, it may be considered a kickback.
• Payments offered to patients: When patients are targeted with cash payments or rebates by drug companies to pressure doctors to prescribe certain medications, it may be considered a kickback.

Kickbacks are considered to be serious violations because of the effect that they have on the medical practice. The following implications are part of why they are taken so seriously.

• Overutilization: Kickbacks can lead to the overutilization of treatments and services that should be used sparingly. This can lead to shortages in emergencies or danger to patients that who should have been prescribed less-invasive options.
• Increased program costs: Kickbacks can lead to less efficient operations as patients are encouraged to undertake tests, procedures, or rounds of drugs that may not be necessary for them.
• Corruption: The presence of kickbacks can make any medical environment significantly more corrupt. This can come with increased costs for patients and the government programs that pay for care.
• Unfair competition: Kickbacks can lead to unfair competition as less cost-efficient medicines and treatments are preferred because of illegal incentives.

Anyone can play a role in preventing these abuses. Whistleblowers are often needed to reveal these schemes. They may be rewarded with a portion of funds that are recovered from a successful prosecution.