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Anti-Kickback Statute Explained by Experienced Anti-Kickback Fraud Defense Lawyers

The Federal Anti-Kickback Statute makes it a felony to knowingly and willfully offer, pay, solicit, or receive remuneration, directly or indirectly, in order to induce business that is reimbursable under any federal health care program, cf. 42 U.S.C. § 1320a-7b(b).

Violations of the Anti-Kickback Statute are among the most common allegations in governmental investigations, physician disciplinary proceedings, and board actions. Violations of the Anti-Kickback Statute require two elements: remuneration between the parties and illegal intent.

What the Government Has To Prove

The government must prove that the remuneration between the parties occurred and that such exchange of goods or services was done with bad intent. Specific intent to violate the law is no longer required.

(1) Renumeration Explained
Remuneration includes virtually anything of value. Thus, once any form of remuneration such as gifts, rebates, cash, donations, or consulting fees are offered between parties, the Anti-Kickback Statute is implicated. In fact, courts have taken an extremely broad interpretation of its scope, holding that the statute may be violated if merely one purpose of a payment arrangement is to induce referrals. U.S. v. Greber, 760 F.2d 68 (3rd Cir. 1985).

Because literally any form of payment or financial benefit to a physician constitutes “remuneration” and thus opens the application of the Anti-Kickback Statute, it is critical to disprove to the government and its agencies the existence of bad intent behind the remuneration.

(2) Intent Requirement
As stated, an illegal intent to induce or reward referrals or to purchase, lease, order, or arrange for, or recommend the purchasing, leasing, or ordering of any good, facility, or service that may be paid for by a government health care program must co-exist with remuneration in order for a violation to be found.

Importantly, under the new Patient Protection and Affordable Care Act (PPACA), the government is no longer required to show that a defendant specifically knew that the behavior was unlawful. See, United States v. Mathur, 2012 WL 4742833 (D. Nev. 2012). Thus, a person no longer needs actual knowledge of the Anti-Kickback Statute or a specific intent to commit a violation of the Anti-Kickback Law. See, 42 U.S.C. 1320a-7b(h). The purpose of the PPACA was to lower the intent standard to make it easier for the government to prove illegal intent. Whether or not intent actually existed is left to judge or jury, see U.S. v. Bradford Regional Medical Center, Civil No. 04-186 Erie, 2013 U.S. Dist. LEXIS 141835 (W.D. Penn. Sept. 30, 2013).

In light of these highly practical changes, it is imperative that the parties demonstrate clear and good intent since any form of knowledge and awareness of a wrongdoing can be held against the parties.

Civil or Criminal Charges?

One of the predominant questions clients ask us when they call the Oberheiden & McMurrey, LLP for help is to determine if the government investigation against them is civil or criminal; that is, whether the government is seeking monetary remedies or seeking criminal indictments and imprisonment. Health Care fraud statutes provide for both, making the issue of civil versus criminal a critical threshold question. About 1,400 individuals are indicted in federal court for Health Care fraud each year and more than 2,500 individuals are under Medicare criminal investigation.

How do we know? Often times, when we first talk to our new clients and hear their side of the story, we develop a good sense. Years of experience combined with the insight and knowledge of our former government officials allow us to catch certain details and nuances of the investigation that do not strike the general audience as relevant. For example, we pay close attention to how our clients had been notified about the investigation, by which government agency they were contacted, and which government official is in charge of the investigation. The mere involvement of a prosecutor or a federal agency does not mean that the case is a criminal investigation.

Call us today to discuss your case with our anti-kickback defense attorneys. All initial consultations are free and confidential. We want you to gain relief and to move on with your life. Let us handle your case.

Who is Under Investigation?

Because the Anti-Kickback statute applies to professional health care providers (e.g. physicians, nurse practitioners, nurses, physician assistants) as well as non-licensed individuals (e.g. health care business owners), everyone involved in health care is subject to state or federal anti-kickback regulations. Under particular scrutiny are service arrangements in the following industries:

Industries:

  • Laboratories
  • X-Ray, MRI, Imaging Centers
  • Surgery Centers
  • Physician Owned Companies
  • Physicians
  • Compound Pharmacies
  • Medical Device Companies

Recent Examples:

  • Medicare Fraud Strike Force charges 90 individuals
  • Medicare Fraud Strike Force charges 89 individuals
  • Doctor Admits Taking Bribes in Test-Referral Scheme with Lab
  • Owner of Nursing Agency Convicted of Multi-Million Dollar Fraud Scheme
  • Principal in $28.3m Medicare Fraud Scheme Sentenced to 11 Years in Prison

(Published by U.S. Department of Justice at http://www.stopmedicarefraud.gov/newsroom/)

How Can I Avoid Government Scrutiny?

Clearly the best defense against Anti-Kickback charges is to confer with experienced counsel before entering a questionable arrangement. In addition to our experience with government investigation in health care matters, each member of the Health Care Practice Group at Oberheiden & McMurrey, LLP has handled a minimum of one hundred (100) health care matters. In a great number of those engagements we were asked to draft documents that meet state and federal scrutiny such as marketing agreements, service agreements, or joint ventures between physicians and health care service companies.

Specifically in the Anti-Kickback context, we routinely to construct business arrangements among health care providers within the constraints of the safe harbor provisions, which carve out certain behavior otherwise prohibited under the Anti-Kickback statute. For example, we demonstrate to our clients how to meet Safe Harbor requirements, how to evaluate fair market value, how to avoid personal liability, how to set up a corporate compliance program, how to show “good” v. “bad” intent in ventures to which the Anti-Kickback statute applies.

What Are Safe Harbors?

The Anti-kickback statute contains several so-called safe harbors whereby arrangements that appear to violate the Anti-Kickback Statute on its face would be exempt from sanction because the arrangements do not violate the spirit of the law after all. Put differently, the satisfaction of a safe harbor demonstrates “good intent.”

The U.S. Department of Health and Human Services (“HHS”) has promulgated a number of “safe harbor” regulations that outline lawful business arrangements between physicians and non-physicians. While strict compliance with a safe harbor provides comfort that an arrangement will not violate the law, compliance with the safe harbors is optional and failure to fit within a safe harbor does not per se mean an arrangement is illegal.

Recognized Safe Harbors Include:

  • Space rental agreements
  • Equipment rental contracts
  • Personal services and management contracts
  • Referral services
  • Compensation to legitimate employees
  • Group purchasing organizations
  • Price reductions offered to health plans
  • Ambulatory surgical centers
  • Electronic health records items and service

Among the most frequently used safe harbor provisions is the so-called safe harbor that allows physicians to make investments in facilities to which these physicians refer their patients. This so-called small investment safe harbor protects the return on an investment made to an investor as long as various standards are met. One such standard limits the investment so that no more than 40% of the value of each class of investment interests may be held by investors who are in a position to make or influence referrals to, or furnish items or services to, the entity and a requirement that not more than 40% of the entity’s gross revenues related to the furnishing of health care items and services come from referrals or business otherwise generated by investors, See 42 C.F.R. § 1001.952(a)(2).

Another standard requires that the terms on which an investment interest is offered to a passive investor who is in a position to make or influence referrals to, furnish items or services to, or otherwise generate business for the entity must be no different from the terms offered to other passive investors.

How Do I Protect Myself?

When you hire the attorneys and former government officials of Oberheiden & McMurrey, LLP, you will notice that we bring in three core accolades: industry knowledge, government experience, avoiding criminal charges. Our track record of successfully defending health care charges is clear.

Industry Knowledge. When you are under investigation, you do not want to waste time explaining the business you are in. You expect your lawyers to be familiar with the industry and be ready to plan defense strategy. Because few health care violations are obvious, having the right industry knowledge helps to demonstrate to the government that alleged misconduct was within the law, especially since the law itself is not even clear.

Government Experience. We have government experience. The anti-kickback lawyers and former government officials of Oberheiden & McMurrey, LLP have proven health care and law enforcement experience. Our attorneys have extensive knowledge and competence in handling serious health care matters. The difference between liability and human error is often a fine line that requires convincing negotiation skills and attention to details.

Civil, not Criminal. We want to keep investigations civil, not criminal. Our attorneys are able to persuade the government that errors, if they exist, were not done intentionally and willfully, but by accident and human error. Doing so is critical because in each fraud investigation the government has two choices: to investigate you to seek recoupments or to prosecute and indict you and seek imprisonment. The law provides for both.

Talk to an Experienced Health Care Fraud Defense Lawyer Today

If you are being investigated for health care fraud or anti-kickback statute violations call us today. Our fraud defense attorneys have the experience and expertise to defend you against any charges.

Our Track Record

  • Defense of nationally operating health care company against an investigation by the Department of Defense for alleged Tricare fraud.
    Result: No civil or criminal liability, case dismissed.
  • Defense of health care marketing company against an investigation by the Office of Inspector General for alleged False Claims Act and Medicare violations
    Result: No civil or criminal liability, case dismissed.
  • Defense of Medicare laboratory against investigations by the Department of Health and Human Services and the Office of Inspector General for alleged Health Care Fraud.
    Result: No civil or criminal liability, case dismissed.
  • Defense of a health care services company against an investigation by the Office of Inspector General, the Department of Justice, and the Department of Health and Human Services for alleged False Claims Act and Stark Law violations
    Result: No civil or criminal liability, case dismissed.
  • Defense of Medicare laboratory against investigations by the Department of Health and Human Services and the Office of Inspector General for alleged Health Care Fraud.
    Result: No civil or criminal liability, case dismissed.
  • Defense of a laboratory against an investigation by various branches of the federal government for alleged fraud.
    Result: No civil or criminal liability, case dismissed.
  • Defense of a physician owned entity against an investigation by the Department of Justice for alleged fraud.
    Result: No civil or criminal liability, case dismissed.
  • Defense of physician owned entity against an investigation by the Department of Health and Human Services for alleged Stark Law violations.
    Result: No civil or criminal liability, case dismissed.
  • Defense of a physician owned entity against an investigation by the Office of Inspector General for alleged False Claims Act violations.
    Result: No civil or criminal liability, case dismissed.
  • Defense of a physician owned entity against an investigation by various branches of the federal government for alleged False Claims Act, Stark Law, and Medicare violations.
    Result: No civil or criminal liability, case dismissed.
  • Defense of a physician owned entity against an investigation by the Office of Inspector General for alleged fraud.
    Result: No civil or criminal liability, case dismissed.
  • Defense of a physician owned entity against an investigation by the Department of Defense for alleged Tricare fraud.
    Result: No civil or criminal liability, case dismissed.
  • Defense of a physician owned entity against an investigation by the Department of Justice for alleged Medicare Fraud.
    Result: No civil or criminal liability, case dismissed.
  • Defense of physician owned entity against an investigation by the Department of Health and Human Services for alleged Stark Law violations.
    Result: No civil or criminal liability, case dismissed.
  • Defense of health care management organization against an investigation by the Office of Inspector General, the Department of Justice, and the Department of Health and Human Services for alleged Medicare Fraud.
    Result: No civil or criminal liability, case dismissed.
  • Defense of nationally operating laboratory against an investigation by the Office of Inspector General for alleged fraud.
    Result: No civil or criminal liability, case dismissed.

Anti-Kickback Statute Information / Anti-Kickback Fraud Defense Attorneys

Who Will Handle Your Case

When you hire us, you will not work with paralegals or junior lawyers. Each lawyer in our Healthcare Practice Group has handled at least one hundred (100) matters in the healthcare industry. So, when you call, you can expect a lawyer that immediately connects with your concerns and who brings in a wealth of experience and competence. For example, you need someone like Lynette S. Byrd, a former federal prosecutor in healthcare matters, who recently left the government and who is now sharing the valuable insights she gained as a healthcare prosecutor with our clients.

Bill C. McMurrey

Bill C.
McMURREY

Dr. Nick Oberheiden

Dr. Nick
OBERHEIDEN

Lynette S. Byrd

Lynette S.
BYRD

Glenn A. Harrison

Glenn A.
HARRISON

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