Physician Anti-Kickback Defense Attorneys - Oberheiden, P.C.
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When Does a Physician Joint Venture Arrangement Violate the Anti-Kickback Statute?

anti-kickback statute


Oberheiden, P.C.
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It has become commonplace for healthcare providers to affiliate with ancillary services companies, often through an investment into laboratories, medical equipment suppliers, or physical therapy clinics.  While such investments are not illegal, healthcare providers and healthcare businesses must ensure compliance with important laws that govern referrals in joint ventures. Of critical importance is the joint venture’s compliance with the Anti-Kickback Statute.

Control Questions

When evaluating the relationship between a referring physician and an external health services company, federal prosecutors consider the following questions:

  • Did the parties to the joint venture have an intent to generate referrals?
  • Will the joint venture have a customer base that extends beyond referrals from provider investors?
  • Is compensation between the parties set at fair market value and not based upon the volume or value of patient referrals or other business generated between parties to the joint venture?
  • Is there a business plan? Does the joint venture have its own employees, assets, and liabilities?
  • A joint venture should should not be evaluated based on patient referrals and volume but on the adequacy of the capital investment and distributions made in proportion to these ownership interests. The proposed arrangement should not include compensation or ownership interests based upon referral opportunities.

See, Healthcare Compliance Professional’s Manual (2012), Sections 51,460-51,520.

Put our highly experienced team on your side

Dr. Nick Oberheiden
Dr. Nick Oberheiden



John W. Sellers
John W. Sellers

Former Senior Trial Attorney
U.S. Department of Justice

Local Counsel

Joanne Fine DeLena
Joanne Fine DeLena

Former Assistant U.S. Attorney

Local Counsel

Joe Brown
Joe Brown

Former U.S. Attorney & Former District Attorney

Local Trial & Defense Counsel

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Aaron L. Wiley
Aaron L. Wiley

Former Federal Prosecutor

Local Counsel

Roger Bach
Roger Bach

Former Special Agent (OIG)

Michael Koslow
Michael Koslow

Former Supervisory Special Agent (FBI)

Chris Quick
Chris Quick

Former Special Agent (FBI & IRS-CI)

Kevin M. Sheridan
Kevin M. Sheridan

Former Special Agent (FBI)

Ray Yuen
Ray Yuen

Former Supervisory Special Agent (FBI)

Dennis A. Wichern
Dennis A. Wichern

Former Special Agent-in-Charge (DEA)

Medical Marketing Commissions

Sometimes instead of, or in addition to, having a direct financial relationship with the health services company, a physician will have a relationship with a medical marketing company representing the health services company which serves as an intermediary. Government prosecutors closely examine such relationships for evidence that the marketing company provides improper compensation to referring physicians. The following factors are identified when it comes to marketing commissions in the context of federally-funded patients:

  • Percentage-based commission
  • Use of healthcare professionals as sales agents
  • Direct marketing to beneficiaries of federal healthcare programs
  • Interference with the physician’s professional independence
  • Implementation of paid-for support staff (e.g. tox collectors)
  • Direct billing of a federal healthcare program by the seller for the items or services sold by a sales agent

If you are a physician that has a relationship with a medical marketing company that reflects any of the above-mentioned characteristics, you should contact the team at Oberheiden, P.C. to advise you as to whether your relationship may be in violation of the Anti-Kickback Statute.

State Anti-Kickback Statutes

In addition to the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)), most states have enacted their own anti-kickback laws. The difference between federal and state anti-kickback laws is twofold: first, state laws do not cover transactions involving federally-funded patients; they only apply to state healthcare programs and commercial insurance payors. Second, because the federal government lacks jurisdiction over state affairs and typically does not assist in enforcing state laws, alleged anti-kickback violations on the state level are not investigated and prosecuted by federal agencies, such as the FBI or the Department of Justice, but by state law enforcement agencies.  Additionally, as with all laws, in the case of a conflict between state and federal anti-kickback laws, the federal Anti-Kickback Statute prevails.

Texas, like most states, has enacted statutes prohibiting kickbacks, fee splitting, patient brokering and self-referrals. For example, Texas Occ. Code Sect. 102.001(a) provides in pertinent part:

A person commits an offense if the person knowingly offers to pay or agrees to pay or agrees to accept, directly or indirectly, overtly or covertly any remuneration in cash or in kind to or from another securing or soliciting a patient or patronage for or from a person licensed, certified, or registered by a state healthcare regulatory agency.

However, the Texas state statute expressly subordinates its purview to the federal Anti-Kickback Statute, as stated in Texas Occ. Code Sect. 102.003, which provides:

Section 102.001 permits any payment, business arrangement, or payment practice permitted by 42 U.S.C. Section 1320a-7(b) or any regulation adopted under the law.

Moreover, the Texas Anti-Kickback Statute has adopted the exceptions and safe harbors to the federal anti-kickback statute.

A Team You Can Trust

The attorneys of Oberheiden, P.C. have successfully defended clients against Medicare Fraud, Medicaid Fraud, Tricare Fraud, Anti-Kickback, and False Claims Act accusations and concluded a large number of healthcare fraud cases with no civil or criminal liability on behalf of their clients. See for yourself, our healthcare defense track record is impeccable. We are a team of former federal prosecutors and experienced defense attorneys that are committed and dedicated to assist you when you need help. We have helped nurses, physicians, business owners, hospitals, laboratories, pharmacies in healthcare investigations across the country.

This information has been prepared for informational purposes only and does not constitute legal advice. This information may constitute attorney advertising in some jurisdictions. Reading of this information does not create an attorney-client relationship. Prior results do not guarantee similar future outcomes. Oberheiden, P.C. is a Texas PC with headquarters in Dallas. Mr. Oberheiden limits his practice to federal law.

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Nick Oberheiden is the absolute best federal litigation attorney. Nick gives you the immediate comfort of feeling 100% protected. He is polite, respectful— and extremely compelling. His legal strategy turned out to be brilliant.

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