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Anti-Kickback Statute (AKS) Explained

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A complete understanding of the Anti-Kickback Statute (AKS) is essential for healthcare business owners and medical professionals like you. Violating these laws can lead to dire consequences, harming your business or career. These adverse consequences include civil fines, criminal penalties, federal health care program exclusions, and even the loss of your medical license.

Read on to learn what the federal Anti-Kickback Statute (AKS) is and what exactly it prohibits. Find out the difference between AKS and the physician self-referral laws (Stark Laws). Discover how you can ensure that you and your healthcare staff can consistently follow the AKS with the guidance of a law firm that specializes in healthcare businesses.

What Is the Anti-Kickback Statute (AKS)?

The Anti-Kickback Statute (AKS) is defined as an anti-corruption statute that prohibits financial transactions that reward referrals for products and services reimbursed by healthcare programs sponsored by the federal government of the U.S.

According to the American Bar Association, this criminal statute was created to protect the beneficiaries of these programs from being affected by the influence of monetary offers on referral decisions. Its goal is to prevent an increase in medical expenses and a decrease in the quality of medical services. While the AKS is a prohibitive measure, it can also have a remedial function.

The federal Anti-Kickback Statute (AKS) is one of the country’s most well-known federal fraud and abuse statutes, having a significant impact on business relationships in the healthcare, medical device, and pharmaceutical industries. Illegal financial arrangements can lead to distrust among healthcare providers, medical professionals, manufacturers, and patients.

The U.S. Department of Health and Human Services Office of Inspector General (OIG) considers the AKS one of the five most important anti-corruption statutes applying to physicians and other professionals involved in the healthcare field. The other four statutes are the False Claims Act (FCA), Physician Self-Referral Laws (Stark Laws), Civil Monetary Penalties Law (CMPL), and Exclusion Authorities.

Aside from the OIG, the Centers for Medicare & Medicaid Services (CMS) and other government agencies are also responsible for enforcing AKS.

What Exactly Does the Anti-Kickback Statute (AKS) Prohibit?

The Anti-Kickback Statute (AKS) prohibits people, organizations, and companies from intentionally making, receiving, offering, or soliciting financial payments in exchange for the following:

  1. Making a referral for a person towards another individual or organization for the provision of a service or item that a federal healthcare program may reimburse
  2. Making a recommendation or arrangement for the order of service that a federal healthcare program may reimburse

Aside from monetary payments, these are examples of other incentives that may be considered kickbacks:

  • Free medical equipment and devices
  • Free appliances and gadgets
  • Free or extremely low rental fees for office space
  • Free workshops or seminars at luxury hotels and resorts
  • Extremely high compensation for medical directorships
  • Investor shares in businesses or properties
  • Waiving of copayments
  • Calling kickbacks other terms, such as speakers’ fees, grants, or rebates

Kickbacks in all forms, whether direct or indirect, are strictly prohibited by the AKS, so you should avoid paying or receiving them.

What Is the Difference Between the Anti-Kickback Statute (AKS) and Physician Self-Referral Laws (Stark Laws)?

The Anti-Kickback Statute (AKS) and Physician Self-Referral Laws (Stark Laws) share similarities, making it easy to mix up the two statutes. However, there are significant differences between AKS and Stark Laws, which you need to know.

As explained earlier, the AKS is a criminal statute prohibiting the actual exchange or offer to exchange anything of value for referring services and items reimbursable by federal healthcare programs.

These are some of the potential penalties for individuals or organizations who violate AKS:

  • Jail time for up to five years
  • Fines for up to $25,000
  • Exclusion from Medicare and Medicaid care programs

In contrast, the Stark Laws are considered civil statutes, not criminal statutes. According to the American Society of Anesthesiologists (ASA), this set of federal civil laws prohibits the self-referral of physicians. The physicians of Medicare or Medicaid patients cannot refer others to a business that provides designated health services (DHS) if they or their family members have a financial connection to that business.

These are the possible consequences for individuals and organizations who violate the Stark Laws:

  • Civil penalties up to $100,000 for each circumvention scheme
  • Civil penalties up to $15,000 for every service provided in violation of the laws
  • Denial of DHS payments
  • Refund of payments received by physicians and healthcare facilities
  • Triple the amount of the improper payment which the business received from the Medical program
  • Exclusion from the Medicare program and/or state healthcare programs, including Medicaid

While the financial penalties may be higher for violations of Stark Laws compared to AKS violations, these charges are considered non-criminal.

Gain Understanding of the Anti-Kickback Statute (AKS) Through Expert Legal Guidance

You must consistently follow the federal Anti-Kickback Statute (AKS) and other similar laws to protect your healthcare business or profession and preserve the integrity of the healthcare industry. Given the complexities of the healthcare business, it’s understandable if you and your team feel overwhelmed by this criminal statute.

If you need further assistance understanding the Anti-Kickback Statute, reach out to our experienced legal team at Fenton Jurkowitz Law Group. We specialize in legal services for healthcare businesses and can help you answer any questions you may have. With our guidance, you can confidently remain on the right side of the law as you provide medical services to your patients.