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What is the Anti-Kickback Statute?

The Anti-Kickback Statute ("AKS") [1] is a federal criminal law that prohibits the knowing exchange of valued items, services, or payments for referrals of goods or services reimbursable by federally funded healthcare programs. Any claim submitted in violation of the AKS is false, and therefore not reimbursable by federally funded healthcare programs. Accordingly, the AKS seeks to ensure patient health considerations drive medical decision-making, rather than monetary or other valuable incentives offered to providers. Combined with the False Claims Act ("FCA"), [2] which allows individuals to sue parties who defraud the government, the two statutes provide a potent tool to combat health care fraud.

AKS applies to all exchanges of value, rather than simply monetary payments. For example, in U.S. ex rel. Nevyas v. Allergan, Inc., Allergan, a pharmaceutical company, provided sophisticated business consulting services free of charge to eye care providers in the Philadelphia area, allegedly in exchange for prescriptions of Allergan products.[3] While no money changed hands, Allergan's provision of services satisfied the exchange of value requirement of the AKS. As the Office of the Inspector General has recognized, "[a]ny time a pharmaceutical manufacturer provides anything of value to a physician who might prescribe the manufacturer’s product, the manufacturer should examine whether it is providing a valuable tangible benefit to the physician with the intent to induce or reward referrals."[4] Goldberg Kohn represented the whistleblower ophthalmologists in Nevyas, which settled for $13 million.

Other forms of remuneration that could potentially violate the AKS if implicitly or explicitly exchanged for referrals include excessive "speaker fees"; paid trips and "consulting fees"; offers to fund independent research; free or below market office space or administrative services; certain profit-sharing arrangements; and excessive payments for sham titles and salaries that are considerably above market and/or result in physician practice losses, among others.

Does the Anti-Kickback Statute prohibit doctors from making referrals altogether?

No. Increased specialization in the medical field has made the referral process a necessary part of the health care industry. Patients, either through their doctor or through word of mouth, are encouraged to see specialists for a variety of reasons. The AKS does not eliminate all patient referrals. Instead, the Statute eliminates referrals motivated by factors other than concern for patient care. As a result, the AKS includes "safe harbors," that outline business arrangements that are exempt from prosecution under the Statute. One safe harbor protects the exchange of goods, services, and payments that are "commercially reasonable and consistent with fair market value established in an arms-length transaction."[5] Take, for example, a doctor who receives a salary from a hospital, and refers patients to radiology services at the same hospital. If the doctor's salary is commercially reasonable, and within fair market value, the arrangement is likely protected by the AKS safe harbor.

In addition, the AKS requires that a defendant intentionally offer or receive a kickback for services. Most jurisdictions find the intent element satisfied where "one purpose" of the subject payment was to induce referrals for goods or services.[6] In addition, a plaintiff must show: (1) an exchange or receipt of (2) any type of good (including non-monetary benefit) to (3) induce referrals that are (4) reimbursable by any federal healthcare program.

What penalties can be incurred under the Anti-Kickback Statute?

Although the AKS is a criminal statute, it imposes both civil and criminal penalties. Criminal penalties include fines up to $25,000 and a 5-year prison term per violation. Civil penalties include liability under civil monetary penalties of Title XI of the Social Security Act,[7] the False Claims Act, and potential exclusion from federal health care programs.

How does a violation of the Anti-Kickback Statute translate to a false claim under the False Claims Act?

The Affordable Care Act, signed into law on March 23, 2010, amended the AKS and clarified that claims submitted in violation of the AKS are explicitly made "false" for purposes of the FCA.[8] Many federal courts have held that kickback-tainted claims for federal reimbursement are "false" under the FCA, and material to the government's payment decision.[9] The resulting damages are equal to the full amount of the tainted claims. Under the False Claims Act, damages are trebled, and each false claim submitted currently subjects a defendant to a penalty of between $11,181 and $22,363 per claim.

While the AKS does not allow individuals to bring claims for a violation of the Statute, individuals with knowledge of AKS violations can "blow the whistle" and bring claims in the name of the government under the FCA. Thus, the FCA and the AKS work together to monitor and enforce rules that require the responsible use of government funds, and that prohibit improper incentives in patient care.


The whistleblower attorneys at Goldberg Kohn are very familiar with cases brought under the False Claims Act and the Anti-Kickback Statute. Our experience speaks for itself—learn more about our landmark victories and settlements here.

If you are aware of a possible violation of the Anti-Kickback Statute or False Claims Act, call Goldberg Kohn at 312-284-3258 or contact us online. We are always willing to provide you with a free, confidential consultation to discuss a possible case.

[1] 42 U.S.C. §1320a-7b(b)

[2] 31 U.S.C. §§ 3729-33

[3] U.S. ex rel. Nevyas v. Allergan, Inc., 2015 WL 3429381, *1, No. 09-CV-00432 (E.D. Pa. May 25,2015).

[4] HHS-OIG Guidance to Pharmaceutical Manufacturers, issued April 2002, p. 28.

[5] 41 U.S.C. § 1001.952

[6] The "one purpose" test was initially established by United States v. Greber, 760 F.2d 68 (3d Cir.), cert denied, 474 U.S. 988 (1985).

[7] 42 U.S.C. §§ 1320a-7a

[8] 42 U.S.C. § 1320a-7(g)

[9] See, e.g., United States v. Rogan, 517 F.3d 449 (7th Cir. 2008); U.S. ex rel Emanuele v. Medicore Assocs., 242 D. Supp. 3d 409 (W.D. Pa 2017).