Understanding the Anti-Kickback Statute

Enacted in 1972, the Anti-Kickback Statute protects both patients and federal healthcare programs from abuse, including fraud. The statute was a part of the Social Security Amendments of 1972, which were followed closely by the 1977 Medicare and Medicaid Anti-Fraud and Abuse Amendments. Fraud was no longer considered a misdemeanor but rather a felony with criminal penalties and severe fines. The Anti-Kickback Statute continues to outline one of the laws medical practices (as well as individuals) must follow to avoid these types of charges.

The Anti-Kickback Statute strictly prohibits the exchange, or offer thereof, of “anything of value” in the aim to encourage or reward the referral of federal health care programs. It was initially drafted very broadly to cover any number of potential transactions that might take place along these lines.

The penalty for the Anti-Kickback Statute, like that for medical fraud, can be severe. In fact, it can warrant a fine of up to $25,000 and five years in prison for any individual (medical representative or patient) involved. Even without a conviction, individuals can be excluded from federal healthcare programs purely at the discretion of the SHHS (Secretary of Health and Human Services). Additionally, the federal government may step in to charge additional civil penalties ($50,000 for each violation). And, like other fraud, the whistleblower precedent stands; any individual who sues a party for this indiscretion on the behalf of the government can receive a portion of the recovery settlement.

In 1999, the OIG issued regulations for the 1993 proposed safe harbors of the Anti-Kickback Statute. These safe harbors mingle alongside exceptions to the law, thus protecting certain rights of healthcare programs that would otherwise be restricted by an overextension of the regulations. Of course, the safe harbors only apply to businesses and financial institutions which fall within the parameters that minimize risk for potential corruption. Those transactions that do not fall under exclusion or the protection of a safe harbor are evaluated on a case-by-case basis by the OIG.

The healthcare system constantly changes, and it can be difficult to keep up on the specifics of regulations for everything from safeguarding the information to the Anti-Kickback Statute. The interpretations and applications are bound to change just as they have done since their infancy in the 1970’s. Fortunately, medical offices can minimize risk by outsourcing certain tasks to companies like Billing Advantage. We not only help you increase profitability and generate a higher rate of collection but also make it a priority to stay informed and efficient with all laws and codes. You don’t have to take our word for it; find out what our customers think!