Federal Anti-Kickback Statute
The Federal anti-kickback statute makes it a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce, or in return for, the referral of an individual to a person for the furnishing of, or arranging for the furnishing of, any item or service reimbursable under a Federal health care program. The statute’s prohibition also extends to remuneration to induce, or in return for, the purchasing, leasing, or ordering of, or arranging for or recommending the purchasing, leasing, or ordering of, any good, facility, service, or item reimbursable by a Federal health care program. For purposes of the Federal anti-kickback statute, “remuneration” includes the transfer of anything of value, directly or indirectly, overtly or covertly, in cash or in kind.
The statute has been interpreted to cover any arrangement where one purpose of the remuneration is to induce referrals for items or services reimbursable by a Federal health care program. Violation of the statute constitutes a felony punishable by a maximum fine of $100,000, imprisonment up to 10 years, or both. Conviction also will lead to exclusion from Federal health care programs, including Medicare and Medicaid. When a person commits an act
described in section 1128B(b) of the Act, OIG may initiate administrative proceedings to impose civil monetary penalties on such person under section 1128A(a)(7) of the Act. OIG also may initiate administrative proceedings to exclude such person from Federal health care programs under section 1128(b)(7) of the Act.
Exceptions – Safe Harbor Protection
Congress has developed several statutory exceptions to the Federal anti-kickback statute. In addition, the U.S. Department of Health and Human Services has promulgated safe harbor regulations that specify certain practices that are not treated as an offense under the Federal antikickback statute and do not serve as the basis for an exclusion. However, safe harbor protection is afforded only to those arrangements that precisely meet all of the conditions set forth in the safe harbor. Compliance with a safe harbor is voluntary. Arrangements that do not comply with a safe harbor are evaluated on a case-by-case basis.
OIG Advisory Opinion No. 23-07
In its Advisory Opinion posted on October 13, 2023, the U.S. Department of Health and Human Service Office of Inspector General stated: “Under the Proposed Arrangement, Requestor would offer and pay each Physician Employee
remuneration in the form of a quarterly bonus equal to 30 percent of Requestor’s net profits from Requestor’s ASC [ambulatory surgical centers] facility fee collections attributable to that physician’s procedures performed at either of Requestor’s ASCs for the preceding quarter (in addition to base employment compensation). When the relevant ASC procedures are referred by the Physician Employee and are reimbursable by a Federal health care program, the Federal anti-kickback statute would be implicated.”
“However, we conclude that the bonus compensation under the Proposed Arrangement would be protected by the statutory exception and regulatory safe harbor for employees because: (i) Requestor certified that the Physician Employees would be bona fide employees of Requestor in accordance with the definition of that term set forth at 26 U.S.C. § 3121(d)(2);13 and (ii) the bonus compensation would constitute an amount paid by an employer to an employee for employment in the furnishing of any item or service for which payment may be made in whole or in part under Medicare, Medicaid, or other Federal health care programs.”
“We note that a similar arrangement involving bonus payments to independent contractor physicians or other nonemployees or under a different corporate structure (in which, for example, the physicians were owners of the ASCs and paid themselves the bonuses contemplated by the Proposed Arrangement as ownership distributions) may raise fraud and abuse concerns under the Federal anti-kickback statute. Payment structures that tie compensation to profits
generated from services furnished to patients referred by the compensated party are suspect under the Federal anti-kickback statute. Here, however, because the Proposed Arrangement would satisfy the statutory exception and regulatory safe harbor for employees, the remuneration exchanged under the Proposed Arrangement would not constitute prohibited remuneration under the Federal anti-kickback statute despite the potential risks of fraud and abuse this type of compensation generally could present.”
“Finally, in issuing this advisory opinion, we rely on Requestor’s certification that the Proposed Arrangement would not implicate the physician self-referral law, section 1877 of the Act. Although we express no opinion with respect to the application of the physician self-referral law to the Proposed Arrangement, we note that if the Proposed Arrangement would violate that law, the request for this advisory opinion would pose a hypothetical situation and thus would not qualify as an advisory opinion request.”
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