What is the Anti-Kickback Statute?

 Manufacturers of pharmaceuticals, medical devices, and medical equipment have a vested interest in increasing the use of their product in the medical community. The targets of kickback schemes are often physicians because they have the ability to recommend and prescribe drugs and other products directly to patients. For example, a manufacturer or marketer of a particular antidepressant might offer illegal incentives to a physician to prescribe that drug over other similar medications or treatments.

The Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), is designed to ensure that healthcare providers such as physicians and hospitals make decisions based on the needs of their patients without influence from those who stand to profit from influencing their decisions. The Anti-Kickback Statute prohibits the offering and accepting of any sort of reward, payment, or other incentive intended to encourage the recommendation, use, or purchase of any good or service that could be covered under a government health program such as Medicare or Medicaid. This includes not only direct bribes, but also in-kind rewards such as:

  • Free vacations
  • Gifts
  • Free Meals
  • Paid contracts
  • Financial support of CME programs
  • Other indirect forms of remuneration

There are certain statutory exceptions that allow legal “safe harbor” for legitimate financial arrangements between manufacturers and purchasers, including equipment leases, space rental, and other contracts. However, all of the terms and conditions of these arrangements must be clearly documented and prices must be at fair market value for the good or service provided. If the arrangement is not clearly documented or the terms are not followed, it may constitute an illegal kickback.

If you have knowledge of improper kickbacks in the healthcare sector, your knowledge may provide the grounds for beginning a qui tam lawsuit under the Anti-Kickback Statute and the False Claims Act. In kickback schemes, claims for reimbursement under Medicare, Medicaid, TRICARE, and other federal healthcare programs tainted by the kickbacks are considered false claims that can be recovered through a qui tam action.

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