By: Matt Fischer
Healthcare marketing arrangements that violate the Anti-Kickback Statute (AKS) can lead to serious financial and criminal consequences. Understanding the types of marketing arrangements that courts have found to be in violation of the statute and the potential implications are critical for marketers to know in order to operate in the healthcare industry.
Under the AKS, it is a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce referrals of items or services reimbursable by the Federal health care programs. Where remuneration is paid purposefully to induce referrals of items or services paid for by a Federal health care program, the AKS is violated. By its terms, the AKS ascribes criminal liability to parties on both sides of an impermissible transaction. An example of a highly scrutinized arrangement involves percentage compensation. For regulators, percentage compensation arrangements provide financial incentives that may encourage overutilization and increase program costs.
Here are 3 important things to know:
- Seek Safe Harbor Protection: Safe harbors are intended to provide some comfort that proposed arrangements may be immune from prosecution under the statute. For many, the pertinent regulatory safe harbor is the personal services and management contracts safe harbor. Even though safe harbor compliance is not mandatory, it creates a presumption of compliance and an affirmative defense if indicted.
- Lack of Specific Knowledge is Not a Defense: One of the elements for an AKS violation is the “knowingly and willfully” requirement. Through the years many individuals convicted have appealed convictions arguing that they did not have the requisite intent as they were not specifically aware of the AKS at the time. A lack of willfulness is definitely a defense; however, numerous Federal appellate courts have held that ignorance of this specific law is no excuse.
- A Violation Could Include Jail Time: If indicted, the charges may include not only violating the AKS (42 USC §1320a-7b(b)) but for defrauding a health care benefit program (18 USC §1347(a)(1)), aiding and abetting health care fraud (18 USC §1347(a)(2)), and/or conspiracy to commit or to defraud the United States (18 USC §371). Each of these charges carry significant penalties with the possibility of incarceration.
Before entering the healthcare marketing field, it is vital to contact an experienced attorney who can assist in structuring a compliant arrangement. While any other sector of business can focus on profits alone, healthcare businesses and marketers must also focus on patient care, which complicates things. Many times, an individual or business will seek counsel from a general practitioner with no healthcare experience that will lead them down the wrong path.