Operating a medical practice is no small feat.
You have patients’ lives to worry about, but you also need to stay on top of confusing federal laws. Make one mistake with your financial arrangements and your practice could face serious legal jeopardy.
Fortunately, you can avoid making those mistakes.
If you know when to reach out to a healthcare attorney, you can protect your hard work and everything you have built.
What you’ll learn:
- Healthcare Kickback Laws Explained
- Signs You Need Legal Help
- Penalties for Kickback Law Violations
- Avoiding Legal Headaches Down the Road
Healthcare Kickback Laws Explained
Welcome to the world of the Anti-Kickback Statute.
Federal criminal law prohibits providing or receiving “anything of value” in exchange for patient referrals covered by Medicare, Medicaid, and other federal healthcare programs.
Let’s be clear…
This law is intentionally broad. It applies to both the giver and receiver of the kickback. And “anything of value” literally means anything of value. Cash payments, discounted rent, fancy dinners, and over-inflated consulting fees all qualify.
There is also something called the Stark Law. This particular law deals with physician self-referrals for certain medical services.
You will want a skilled Healthcare Kickback Lawyer on your side if your practice is ever investigated for criminal behavior involving these laws. Healthcare providers frequently violate these laws unknowingly.
Signs You Need Legal Help
Intent to commit a crime is rarely the case with healthcare providers.
However, there are certain business practices that could be put in place without realizing they meet the definition of illegal kickbacks. Pay attention if your practice:
- Gets compensated based on referrals
- Receives below-market rent from a potential referral source
- Gets paid consulting fees significantly above market value to simply “look the other way”
- Accepts free rent, equipment, etc. from labs, device companies, or other vendors
- Receives payments in exchange for “marketing services” that are actually referral fees
See what I mean?
Any of the above practices could be interpreted as kickbacks by the government. The challenge is they may not be “illegal” in other industries.
Penalties for Kickback Law Violations
Did you know it’s a felony to violate the Anti-Kickback Statute?
Criminal penalties include up to ten years in prison per violation and fines up to $100,000. There are civil penalties as well. Violators may be assessed an additional $50,000 per kickback and triple the amount of compensation they received.
Wait, there’s more…
Submitting claims to Medicare or Medicaid that are associated with illegal kickbacks is a violation of the False Claims Act. Penalties under this statue reach $27,894 per claim.
Needless to say, the government takes violations seriously. The DOJ reported collecting $1.67 billion through healthcare-related False Claims Act settlements in 2024. Prosecutors are also cracking down on more cases every year.
Not only can you face jail time and fines, your practice could be excluded from participating in federal healthcare programs. For most medical practices, that is essentially a death sentence.
Avoiding Legal Headaches Down the Road
You should consult with an attorney if…
Your practice is entering into any new financial arrangements that involve referrals to another medical practice or compensation from a third-party. Don’t wait until you are being investigated for criminal conduct. Pay a lawyer now to save on defense costs later.
You receive a letter from the government. Every healthcare provider should panic when they receive an official document from the Office of Inspector General (OIG), Department of Justice (DOJ), or another law enforcement agency. Seriously. Get a lawyer before you talk to them.
Someone files a whistleblower complaint against your practice. Healthcare kickback laws are often enforced through qui tam lawsuits by insiders familiar with the illegal practices. According to the DOJ, employees filed suits that led to charges against 193 defendants in Health Care Fraud Enforcement Action Week in 2024. Protection from retaliation is one of the many reasons you should have an attorney-client relationship with a kickback lawyer before you need one.
You want to review your current practices. Just because you have been doing something for years does not mean it will pass legal muster today. Hire an attorney to review your financial arrangements and help you spot potential issues.
You are selling your practice. If you are purchasing or selling a medical practice, bring in outside counsel to review current arrangements. You would be shocked to learn how often the previous owner keeps “secret” how healthcare funds are being managed. If something is wrong, you will own those problems when you close.
How You Can Prevent Violations
Okay, so now what?
You know the law, you know when to get help. Here are some tips to keep your practice compliant:
- Create written policies. If there is a procedure, put it in writing. Prosecutors love to go after doctors who “just went along with what everyone else was doing.” Documentation of a sound compliance policy can help you demonstrate good faith.
- Understand fair market value. Any transactions between your practice and a referral source should be based on fair market value. Get independent assessments to prove it.
- Train your employees. All staff should understand what they can and cannot accept from vendors. Provide a yearly refresher to new and existing employees.
- Stay in a safe harbor. The government has laid out certain “safe harbors” in the law. Designed to protect innocent parties, these safe harbors can protect your practice if structured properly. Talk to an attorney about those protections.
- Audit your financial arrangements every year. Healthcare laws and regulations change constantly. What may have been compliant 10 years ago could land you in jail today. Regular audits keep you ahead of potential exposure.
Compliance should be part of your practice’s culture.
Let me say that again…
Somewhere out there is a healthcare provider that purposely set out to violate Anti-Kickback Statute and Stark laws. For the rest of us, violations occur because we don’t know any better or we don’t think our particular arrangement is that serious.
Wrapping Up
Federal healthcare fraud laws were created to protect patients and tax payers.
Albeit well-intentioned, these laws can put your practice in jeopardy if you’re not careful. The AKS and Stark laws make seemingly innocent business arrangements federal crimes. You can be fined, imprisoned, and shut down.
Don’t let that happen to you.
Contact a healthcare attorney today to schedule a no obligation consultation. A knowledgeable attorney can review your financial arrangements and alert you to potential liability. Then work with counsel to build a compliance plan to protect your practice.
Your practice did not become successful overnight. Don’t risk it all because you tried to save a few dollars on legal fees.
