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

Federal Anti-Kickback Statute under 42 U.S.C. § 1320a-7b
The Anti-Kickback Statute makes it a federal offense for anyone to solicit or receive remuneration in exchange for referring a patient for services.

The Anti-Kickback Statute under 42 U.S.C. § 1320a-7b prohibits anyone from soliciting or receiving remuneration of any type in exchange for referring a patient for services where a federal healthcare program pays or for purchasing an item or service for which a federal healthcare program pays.

Violations of the Anti-Kickback Statute are one of the most common health care fraud accusations in a federal government investigation -  physician disciplinary proceeding – and medical board actions.

These federal crime violations require two crucial elements; remuneration between parties and illegal intent.

Federal law provides for criminal penalties for any individual who:

  • knowingly and willfully solicits, meaning requests, or receives any remuneration, meaning payment, whether called a kickback, bribe, rebate, etc. in return for referring a person for treatment which is compensated by a federal health care program. 

The False Claims Act under 18 U.S.C. § 287 makes it a crime to submit false, fictitious, or fraudulent claims.

Under 42 U.S.C. § 1320a-7b(b), an individual is guilty of a felony under federal law if they either receive, or pays, a bribe or kickback either in exchange for referring someone for treatment under a federal health care benefits program, or for purchasing, leasing, ordering, or recommending or arranging for the purchase of any good or service which is compensable under a federal healthcare program.

To give readers useful information about the Anti-Kickback Statute, our federal criminal defense lawyers are providing an overview below.

Anti-Kickback Prosecutions

In practical terms, 42 U.S.C. § 1320a-7b kickback prosecutions are brought against individuals who are making money by signing up patients for federally-reimbursed healthcare. 

In the most common scenario, a doctor might pay a third-party a per-patient fee for referring business to the doctor's office. The doctor profits by having more patients whose treatment can be reimbursed, likely at generous rates, by the federal taxpayer.

The referral source benefits directly through a bribe or kickback from the doctor's office. 

This provision also applies to the sales of healthcare related goods and facilities, not just services.

For example, if a pharmacist pays kickbacks to a referral source who supplies patients in need of an expensive medical device or drug which will then be reimbursed by a federal benefits program, that conduct would also be chargeable under 42 U.S.C. § 1320a-7b.

Of course, not all compensation received in connection with federally reimbursable healthcare gives rise to an anti-kickback prosecution.

The statute specifically exempts discounts or reductions in price obtained by the provider or services provided that the discount is disclosed properly and reflected in the claims for reimbursement submitted to the federal government. 

Similarly, employee compensation, assuming the employee has a legitimate business relationship with the service provider, does not qualify as a kickback or bribe.

Other provisions exist which also exempt very specific business relationships from the coverage of the statute. 

At bottom, the provisions of 42 U.S.C. § 1320a-7b are directed at the patient referral and kickback activity described above, and not at legitimate healthcare providers who provide services which are compensated by federal tax dollars.

What Federal Prosecutors Must Prove

Federal prosecutors must be able to prove the remuneration between the parties occurred and that the exchange of goods or services occurred with bad intent.

Specific intent to violate federal law is not required.

Remuneration can include anything of value, such as cash, donations, gifts, or even consulting fees.

Federal courts have taken a broad interpretation – concluding the statue could be violated - if just one purpose of a payment arrangement is intended to induce a referral.

Any type of payment or financial benefit to a physician will be considered “remuneration” and open to prosecution under the Anti-Kickback Statute.

This means it's crucial for a criminal lawyer to challenge the allegation of bad intent behind the remuneration.

Also, federal prosecutors must prove an illegal intent to induce or reward referrals, or to purchase, lease, arrange, or recommend purchasing, leasing, or ordering of any goods or services that might be paid for by a government health care program.

This intent requirement has to co-exist with remuneration to be found guilty of the Anti-Kickback Statute.

 It should be noted that under the Patient Protection and Affordable Care Act, the prosecutor is no longer required to prove you specifically knew the behavior was unlawful.

Penalties for Violation of Anti-Kickback Statute

The anti-kickback statute provides for severe criminal penalties, even for first offenders. The maximum punishment available under 42 U.S.C. § 1320a-7b for healthcare kickback crimes is:

  • 10 years in federal prison,
  • a $100,000 fine, or both.

Federal sentencing is a complex topic which involves the application of the Federal Sentencing Guidelines, the equitable considerations contained in Title 18, Section 3553(a) of the United States Code, and other discretionary determinations of the sentencing judge.

For that reason, the final sentence imposed in a given defendant's case will vary more significantly than in most California state prosecutions, where sentencing ranges are largely established by statute through the state's determinative sentencing provisions. 

Effective advocacy at sentencing, even when the defendant pleas guilty, is therefore crucial to achieving the best possible outcome.

Fighting Anti-Kickback Statute Charges

Our federal criminal lawyers can use a variety of defenses on your behalf to obtain the best possible outcome.

Defenses to an anti-kickback prosecution will vary on a case-by-case basis, but some common defenses are worth noting.

Payments Don't Fall Within Coverage of Statute 

First, as noted above, many types of payment to various organizations or individuals do not fall within the coverage of the statute.

Depending on the precise contractual relationship between the individual defendants, it may be able to be established that the payments at issue do not qualify as kickbacks or bribes, but simply legitimate payments for services. 

Payments Don't Relate to Healthcare Benefit Program

Second, the payments at issue must relate to a federally administered healthcare benefit program. 

Leaving aside potential liability under state law or possible administrative consequences to a doctor's license to practice medicine, if a kickback is paid to a patient referral source for services or goods which have no connection to a federal benefits program, these payments, though possible illegal under a different provision, would not fall within the provisions of 42 U.S.C. 1320a-7b.

Federal healthcare fraud cases, particularly involving doctors accused of paying or receiving kickbacks, are complex criminal matters which expose the defendant or defendants to significant punishment in federal prison.

If you or a family member is under investigation for one of these serious federal criminal charges or has already been indicted in federal court, contact our experienced federal criminal defense attorneys immediately for an initial consultation. 

We can negotiate with the government on your behalf before the case goes to court to help secure the most advantageous outcome.

 Plea agreements are a formal deal between defendant and federal prosecutor where the defendant will plead guilty in exchange for reduced charges, or to receive a lighter sentence.

Eisner Gorin LLP is a top-ranked criminal defense law firm located at 1875 Century Park E #705, Los Angeles, CA 90067. Call us at 310-328-3776 to review your case.

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