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Whistleblowers can Report Violations of the Anti-Kickback Statute and Stark Law Using the False Claims Act
The Anti-Kickback Statute and Stark Law prohibit medical providers from paying or receiving kickbacks, remuneration, or anything of value in exchange for referrals of patients who will receive treatment paid for by government healthcare programs such as Medicare and Medicaid, and from entering into certain kinds of financial relationships.
Both the Anti-Kickback Statute and the Stark Law are designed to keep medical treatment decisions free from the influence of potential monetary gain. Kickbacks and other unlawful financial arrangements give providers reasons to send patients for services they might not actually need. They can lead to:
As the Department of Justice has explained, “[p]atients are entitled to be sure that the care they receive is based on their actual medical needs rather than the financial interests of their physician.”
While both laws cover unlawful financial arrangements, there are important distinctions between them.
The Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), covers a broader range of activity than the Stark Law, and extends to all medical providers in a position to arrange or recommend medical services. “Referrals” under the Anti-Kickback Statute include “any item or service for which payment may be made in whole or in part under a Federal health care program.”
While the Anti-Kickback Statute covers a broad range of activity, it also requires a showing of an “intent to induce referrals.” The criminal provisions of the Anti-Kickback Statute are violated where something of value is “knowingly and willfully” provided with a purpose to induce referrals.
Claims for payment submitted to Medicare or Medicaid that include items or services resulting from a violation of the Anti-Kickback Statute are deemed to be false claims under the False Claims Act, even if the defendant did not have the specific intent to commit a violation of the Anti-Kickback Statute.
Therefore, providers may not argue that they did not know they were violating the FCA because they were not aware the Anti-Kickback Statute existed.
Under the Stark Law, 42 U.S.C. § 1395nn, “referrals” are limited to certain types of medical services, such as lab testing, hospital services, prescription drugs, and durable medical equipment, defined as “designated health services.” In addition, the Stark Law applies only to relationships with physicians.
The Stark Law, unlike the Anti-Kickback Statute, flatly prohibits a broad range of financial relationships, and does not require proof of an intent to induce referrals. Determining whether a particular financial relationship runs afoul of the Stark Law, however, can be more technically complicated.
There are differences between the Anti-Kickback Statute and Stark Law, and regulations provide “safe harbors” permitting certain arrangements.
Significant experience with the statutes and regulations is often required to to understand, analyze, and develop a False Claims Act case based on violations of them.
Typically, however, the core analysis looks at the a fundamental question: was something of value provided to induce health care referrals?
This “thing of value” can be as simple as cash, or as complex as a carefully constructed physician employment agreement or the right to invest in a profitable joint venture. Basically, anything of value to a person in a position to refer, such as cheap office space, patients referrals, a free employee, or a fat bonus, can classify as an illegal inducement under the Anti-Kickback and Stark laws.
Classic examples of violations of Anti-kickback and Stark laws include:
You can review additional examples of government enforcement actions to stop unlawful kickbacks in our related posts.
We can’t list every way that people have tried to cheat the healthcare system, and people are always finding new ways. Whistleblowers have played a critical role in exposing violations of the Anti-Kickback Statue and Stark laws, maintaining the integrity of the system, protecting patients, and saving taxpayer money.
Unlawful kickbacks and financial arrangements are planned and carried out at many different levels of the healthcare system – from individual medical offices to the executive offices of global pharmaceutical companies – and the government has long viewed enforcement of the Anti-Kickback and Stark laws as material to preventing healthcare fraud, waste, and abuse.
If you would like more information, or would like to speak to a member of the Constantine Cannon’s whistleblower lawyer team, please Contact us for a Confidential Consultation.