Long gone is the respect and deference given professionals like doctors. In a system racked with fraud and waste, the federal government is scrutinizing everyone involved in the ailing health care system, including physicians. From unnecessary testing to accepting kickbacks, doctors are commonly alleged to have played a vital role in health care fraud conspiracies.


Given the increasing complexity of billing requirements and state and federal regulations, innocent mistakes can look criminal. One lapse in professional judgment can result in a devastating, life-ruining situation.


It is therefore urgent that doctors, like others targeted in law enforcement investigations, obtain counsel before talking to fraud investigators, even if they believe they have done nothing wrong.


Codified in Section 1320a-7b(b) of Title 42, United States Code, the Federal “anti-kickback” statute (“AKS”) prohibits the knowing and willful payment of “remuneration” to induce or reward patient referrals, or the generation of business involving any item or service payable by the Federal health care programs.


Writing in the Boston Bar Journal, Ellen J. Janos and M. Daria Niewenhouse wrote that AKS is part of a “complex statutory and regulatory scheme providing for a wide range of criminal, civil, and administrative sanctions” for abuse or fraud in the Medicare and Medicaid programs. Violations of AKS can result in fines, jail terms, and exclusion from participation in the Federal health care programs.


The Office of Inspector General for the U.S. Department of Health and Human Services informs that “remuneration” includes anything of value and can take on many forms “such as free rent, expensive hotel stays and meals, and excessive compensation for medical directorships or consultancies.”


In the business world, it is a time-honored practice to reward those who refer business to you. Not anymore in the Federal health care programs. It’s a crime under AKS. Worse yet, it is a crime not only to pay for referrals, it is also crime to solicit and receive remuneration for such referrals. In effect, any remuneration is considered a “kickback” which, according to the Inspector General, can lead to: over-utilization, increased program costs, corruption of medical decision-making, patient steering, and unfair competition.


Physicians are “attractive targets” for kickback schemes, says the Inspector General. They have resources with fellow physicians and health care providers and suppliers. They decide the drugs patients will use, which specialists they will see, and what health care services and supplies they will need. All sorts of companies involved in the Federal health care industry see this as an opportunity to offer physicians money for a referral of their Medicare and Medicaid patients.


AKS does create “safe harbors” to protect what the Inspector General calls “certain payment and business practices.” However, the safe harbors are narrow—any payment or business arrangement must fit squarely in the safe harbor by satisfying all of its requirements. For example, physicians are required to collect copays for services rendered—routinely waiving this requirement could implicate AKS. However, it is legal to waive a copay if the physician determines the patient cannot afford the copay. It’s also legal for a physician to provide free or discounted services to uninsured patients without fear of AKS implications.


But these mild safe harbors do not disguise the severe intent of the AKS. A physician can be guilty of violating the AKS, according to the Inspector General, “even if the physician actually rendered the service and the service was medically necessary.” More importantly, accepting money or gifts from a drug or device company or a durable medical equipment supplier will not be excused with the argument that the physician would have prescribed the drug or ordered the device for the patient absent the kickback.


Physicians indeed daily tread murky waters with little room for error.