Ileana Hernandez of Manatt Explains the Anti-Kickback Statute in Healthcare Fraud

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The Anti-Kickback Statute is a legal provision under the Social Security Act. The Anti-Kickback Statute prevents any person or entity from knowingly and willfully soliciting, offering, receiving, or providing remuneration in exchange for referrals for the Medicare and Medicaid Program.

In a sense, it’s kind of like an antitrust law in that the Anti-Kickback Statute prohibits any agreement between two or more persons to set prices at which services will be reimbursed under Federal health care programs. In addition, the statute prohibits all financial arrangements between medical care providers and their actual or potential referral sources that might influence federal health care business referral.

According to Ileana Hernandez of Manatt, Phelps & Phillips Law Firm, it is also essential to understand what activities are prohibited by the statute.

First, providers may give their referral sources promotional items or free services so long as they are not cash or anything else whose value can be used either directly or indirectly for referrals. Payment is any remuneration that the provider has reason to believe has a value connected with providing services under Federal health care programs.

Hernandez also found no monetary limits on promotional items or free services, so long as they do not violate the anti-kickback statute.

Also, providers cannot offer employment to their referral sources if that would depend upon whether they made a referral under Federal health care programs. The Anti-Kickback Statute applies to inducements provided directly or indirectly, which could include anything of value, including cash, meals, trips, and discounts on future services.

Further, providers cannot enter into a partnership with a referral source if doing so would violate the Anti-Kickback Statute. When there is a partnership, the prohibition will not apply to anything of value transferred between the parties in further collaboration if such things are reasonably priced. It does not violate any other state or federal laws.

The healthcare litigation attorney added that providers should be aware of several exceptions:

1) The Anti-Kickback Statute contains exceptions for items or services only available to Federal health care program beneficiaries. For example, many states require Medicaid recipients to pay co-payments when they receive medical services. As a result, providers may give their Medicaid patients discounts on co-payments so long as no additional payment is required from them by the patient or anyone else in exchange for the discount.

2) There is an exception for items or services paid for by Federal health care programs under the Part C Medicare Advantage Program. Under this provision, providers may give referral sources specific incentives, including reduced premiums and lower cost-sharing amounts under Medicare, so long as these incentives are not offered to the general public.

3) Providers can offer goods and services to referral sources as long as the goods or services are only available to Federal health care program beneficiaries. For example, providers can offer free samples and inexpensive products that would be traditional giveaways at medical conferences without violating the Anti-Kickback Statute.

4) Providers may give noncash remuneration in the form of reduced health care professional fees to their referral sources if such arrangements are set out in a written agreement and HHS deemed the rates as reasonable and not determined in violation of any other state or federal laws.

In closing, Hernandez said that it is crucial to know that providers can offer incentives or other remuneration as long as they do not violate the Anti-Kickback Statute.

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