Kusserow on Compliance: Understanding the Anti-Kickback Statute (AKS)

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Almost daily, I am contacted about the Anti-Kickback Statute (AKS) and how it can be applied to different fact situations. This suggests there is still a lot of confusion about this and a brief overview of the topic may prove helpful to many. To begin understanding of AKS and how it is applied is to relate it to the U.S. Code and related provisions.

  1. The Federal Crimes and Procedures are under Title 18 of the U.S. Code, whereas both the criminal and civil provisions are under Title 42 of the Code for Public Health and Welfare with the investigative jurisdiction assigned exclusively to the HHS.
  2. The False Claims Act (FCA) is under Title 31, Money and Finance of the U.S. Code. The vast majority of FCA cases in the health care sector are based upon the AKS. It is the government’s position that all claims arising from a corrupt arrangement (one violating the AKS) are considered false and fraudulent. This, in turn, has resulted in the AKS becoming a predicate for FCA cases, especially those initiated by “whistleblowers” under the qui tam provisions of the FCA. Over the last decade, there have been hundreds of cases investigated by the HHS Office of Inspector General (OIG) involving corrupt arrangements with physicians and other referral sources.


The AKS was enacted in 1972 and was designed to address improper inducements to influence the referral of items and services paid for by federal health care programs. For many years, there were few cases brought under the statute for a variety of reasons, including the challenging evidentiary burden. During my watch as Inspector General (IG), a landmark case (United States v Greber, 760 F.2d 68 (3d Cir. 1985)) broke the ice and gave encouragement to the Department of Justice (DOJ). In that case, the court held that “if one purpose of the payment is to induce future referrals, the Medicare statute has been violated.” This also had the effect of alarming the provider community that the statute was so broad that it was difficult to know whether a violation may be occurring. As the IG, I sought authority from the Congress for an administrative alternative to the AKS that would permit developing rules that would define the kind of behaviour that would NOT invite an investigation under the AKS. This authority was provided under the Medicare and Medicaid Patient Protection Act of 1987. This resulted in my issuing a number of “Safe Harbor Rules” that specified certain exceptions to the AKS. Additional such rules have followed over the years. To date, the greatest number of actions has involved hospitals and other health care providers, however a number of recent major AKS settlements also involved device and pharmaceutical manufacturers.

Common Types of Arrangements Implicating the AKS

  1. Provision of free services or staff to a practice of physicians, including administrative assistants, physicians’ assistants, athletic trainers, or information technology.
  2. Paying for services not really needed (e.g., for unnecessary medical directorships or part-time employment).
  3. Physicians paying below fair market value for leased space in return for referring patients.
  4. Providing discounts on things such as insurance or other items.
  5. Paying physicians under contract different amounts than are contracted.
  6. Recruitment arrangements which are not structured to fully comply with recruitment exceptions in the Stark statute or found to have improper intent in regards to the Anti-Kickback Statute.

Tom Herrmann, who served for a number of years in the OIG Counsel’s office, suggests that in order to understand the factual situations that give rise to enforcement action, it is useful to review the Corporate Integrity Agreements (CIAs) posted on the OIG website as they often summarize the details of AKS violations. He noted that “the CIAs demonstrate the range of misconduct that may violate the AKS.” More importantly, the CIAs “highlight the remedial measures that the OIG believes are necessary for a health care provider, supplier, or manufacturer to continue doing business with federal health care programs.”

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2015 Strategic Management Services, LLC. Published with permission.