What are The Basics of the Anti-Kickback Statute?

The healthcare industry is highly demanding of insurance providers, requiring each of them not only to develop years of extensive training to meet the standard when treating their patients but also to comply with lawful medical regulations.

While competent care is vital, insurance providers also should consider the importance of honesty and compliance, since federal regulations such as the Anti-Kickback Statute and Stark Law pose severe penalties.

The Anti-Kickback Statute is among the government’s most essential tools for fighting healthcare insurance fraud because it concerns payment from improper referrals. For any multi-specialty practice and medical group operating in the healthcare industry, understanding the main elements of the anti-kickback statute is vital in waging efforts that help them ensure regulatory compliance.

The US government is very aggressive in pursuing those people who are suspected of violating the Anti-Kickback Statute. And furthermore, the prosecution for this type of violation often results in harsh penalties. 


The Anti-Kickback Statute is a ‘healthcare fraud and abuse statute.’ It prohibits the process of remuneration for any referrals for services. Anti-Kickback violations are also a form of a False Claims Act. It means that an Anti-Kickback investigation is more likely to become a fraud liability. Moreover, the number of criminal prosecutions to physicians under the Anti-Kickback Statute is higher than the False Claims Act.


The Anti-Kickback Statute is considered a criminal statute. Usually, criminal penalties include five years’ imprisonment and penalty of up to $25,000. Moreover, the OIG or the Office of the Inspector General for the HHS or Department of Health and Human Services can also file civil penalties of up to $50,000, and these penalties can be served on both parties involved in the illegal kickback activity. Also, penalties for any Anti-Kickback statute violations include removal or a period of debarment in all federal programs and plans that provide any health benefits and, worse, potential loss of their medical license.


There are also some referrals that do not violate the Anti-Kickback Statute, which is called “safe harbors.” It is a provision for the  Anti-Kickback statute that is deemed not violating the rule. However, Anti-Kickback violations also use this statute in an effort to avoid being investigated by the authorities. But the legal requirements for “safe harbors” are usually complex and very technical, so if one wishes to use it, we highly suggest seeking legal advice before any payment arrangement is made to determine if it potentially violates the Anti-Kickback Statute or falls within a “safe harbor.”


The Anti-Kickback Statute is one of the 2 main federal statutes that deal from accepting payments to improper referrals, while the other one is called the Stark Law. Although these two laws are quite similar from one to another, there are some vital distinctions between the Anti-Kickback Statute versus the Stark Law. First, unlike the Anti-Kickback Statute, which includes criminal and civil penalties, the Stark Law is an exclusive civil enforcement statute. Second, the Stark Law is limited compared to the Anti-Kickback Statute, whereas it applies to any federal healthcare program. Also, the Stark Law is only limited to some Designate Health Services paid for by Medicare. Third, there should be an element of intent for a violation of the Anti-Kickback Statute compared to the Stark Law, which is a strict liability statute. And fourth, the Anti-Kickback Statute applies to any referral source and not only to physicians alone. While a violation of the Stark Law should involve a referral relationship between an entity and the physician


While even if a person did really require medical services, the Anti-kickback penalties might still apply. However, not all referral transactions fall under the Anti-kickback statue’s jurisdiction. For example, if the government has proved that the physician truthfully acted with intent because he or she has knowingly and willfully accepted any payment for referrals, the physician will then be convicted of the crime. However, if the payment is classified as a recruitment fee just to attract new medical professionals in a rural area or to an underserved community, then the Federal law will recognize it as an exception to the Anti-kickback statute. But to make sure nothing is violated, as we have mentioned earlier, it is better to seek legal advice first.


With so much at stake, both professionally and financially, medical practitioners who receive notice or subpoena for an Anti-Kickback Statute investigation should immediately seek legal advice for an attorney who has an Anti-Kickback Statute experience. Moreover, to avoid Anti-Kickback Statute violations in the future, make sure that all your transactions for kickbacks are within the scope of “safe harbor.” Both the anti kickback statute and the Stark Law are a serious matter that could devastate your medical career and if you can avoid them at all costs.