CAMLAW: Complementary and Alternative Medicine Law Blog

Anti-kickback intent changed by health reform bill

The Patient Protection and Affordable Health Care Act makes it easier for the government to prosecute under the federal anti-kickback statute.

This is an excellent write-up from attorney Greg Piche of Holland & Hart through his health care blog.  The anti-kickback statute ("AKS") formerly read: 

(b)(1) Whoever knowingly and willfully solicits or receives any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind—

(A) in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program, or

(B) in return for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under Federal health care program,

shall be guilty of a felony and upon conviction thereof, shall be fined not more than $25,000 or imprisoned for not more than five years, or both.

(2) Whoever knowingly and willfully offers or pays any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind to any person to induce such person—

(A) to refer an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program, or

(B) to purchase, lease, order, or arrange for or recommend purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under a Federal health care program,

shall be guilty of a felony and upon conviction thereof, shall be fined not more than $25,000 or imprisoned for not more than five years, or both.    

 

Mr. Piche notes:

The Act adds the following to the AKS: 

 

[W]ith respect to violations of this section, a  person need not have actual knowledge of this section or specific intent to commit a violation of this section.

 

    Under existing case law, the AKS has an elevated standard of proof with respect to mens rea or intent to violate the statute, requiring knowing and willful violation, including the specific intent to violate the AKS.  “Willfully”’ means unjustifiably and wrongly and known to be be such by the Defendant. U.S. v. Jain, 93 F. 3rd 436 8th Cir. 1996) (“good faith” is a defense to the charge of violation of the AKS, if defendant believed that he was being paid for promotion, not for referring patients). Scienter under the AKS requires 1) that the defendant know that the AKS prohibits offering or paying remuneration to induce referrals and 2) that the defendant engage in the prohibited conduct with the specific intent to violate the law. Hanlester Network, v. Shalala 51 F. 3rd 1390, 1398 (9th Cir. 1995). supra.  See U.S. v. James, 2007 WL 2174650 (W.D. KY) (payments for medical equipment referrals not a violation of AKS where defendant didn’t believe that non-physicians could give referrals and receive kickbacks under the statute).

The Act strips health care providers of an important protective barrier under the AKS and substantially tips the playing field in favor of the government by effectively eliminating the good faith defense to the AKS.

What more need be said? With the requirement of "intent" watered away, health care providers and institutions need to be ever-more careful of how they structure their compensation arrangements to as to avoid kickback penalties.

 

Our attorneys help clients structure their arrangements so as to properly manage thorny and complex legal arenas.  For more information on our Stark and anti-kickback / fee-splitting practice, please contact our office and/or read our additional post:

Creating Legally Successful, Multidisciplinary Health Care Practices: Fee-Splitting, Kickbacks, Stark Analysis, Corporate Practice of Medicine, Unlicensed Practice, Employment, and Other Issues

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Our law office has attorneys with legal experience  in FDA matters, including guiding  clients involved in health care  delivery, group medical and private  medical practice, who are concerned  about issues at the interface of  federal and state law, concerned  about medical board discipline or  medical malpractice liability  issues.  We also review and draft informed  consent forms and guide  clients concerning a variety of health care law  issues.

If you have legal questions concerning self-referral, kickbacks and fee-splitting or patient brokering in New York, California, Massachusetts, Washington DC, and other states, contact  a lawyer who knows the rules.

Consult an experienced  health care law attorney who knows complementary medicine and integrative  medicine for legal advice pertaining to any project involving allied health or CAM     professionals.

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Healthcare & FDA attorney Michael H. Cohen is a thought leader in healthcare law & FDA law, pioneering legal strategies in healthcare. wellness, and lifestyle markets. As a corporate and transactional lawyer, FDA regulatory attorney who also handles healthcare litigation, healthcare mediation and healthcare arbitration, and international healthcare & wellness law speaker, Los Angeles / Bay Area healthcare & FDA lawyer Michael H. Cohen represents conscious business leaders in a transformational era. Clients seek healthcare & FDA attorney Michael H. Cohen's legal savvy on all aspects of business law, healthcare law, and FDA law, including:

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