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Michigan’s anti-kickback laws were implemented subsequent to Congress passing federal anti-kickback laws decades ago. The purpose of these laws is to protect patients from issues that might arise from illegal referrals made by physicians because they receive a kickback, as opposed to referrals being made based on medical necessity. A kickback can be a financial benefit or another type of incentive.
There are five statutes in Michigan that prohibit kickbacks and they apply to all providers of healthcare, including doctors, pharmacists and dentists, among others. They also encompass requirements for hospitals, pharmacies and long-term care facilities like nursing homes. The way a kickback often works is one party in the healthcare community pays another party to refer patients. The health practitioner that referred patients then receives money or some other incentive as a result of the financial gain received from the referrals.
The reason why practitioners must pay close attention to Michigan’s anti-kickback laws is because it’s easy to get into the habit of referring patients based on professional relationships developed with other healthcare providers. Sometimes this unwittingly results in unlawful practices that occur frequently. However, there are other occasions when financial gain is intentional, but there isn’t a true recognition of why the issue is problematic or that it’s likely violating Michigan’s anti-kickback laws.
Given the severity of non-compliance, healthcare providers should assess their referral processes closely to identify any problematic trends that exists. Some practitioners are unaware of the specific statutes involved in Michigan kickback laws and openly receive financial incentives for referrals. In other instances, the problem occurs because of misinterpretation. There are even doctors that receive special discounts for referring patients without realizing they are in violation of the law.
Several government agencies enforce state and federal anti-kickback laws, including the FBI. In cases where the parties involved intentionally accepted financial incentives, the penalties are stiff. For instance, there have been cases where owners of medical facilities paid their employees and healthcare providers to refer patients. Federal penalties for violating the law in this manner has in the past totaled millions of dollars.
In prior cases, the court has ruled against physicians that did not break the law intentionally, because they were at least aware of the financial gain. In other words, the doctor fully intended to accept money for referrals but didn’t know it was illegal. Given the complexities of Michigan’s anti-kickback laws, it’s prudent for physicians and medical groups to obtain legal counsel for the purpose of getting clarity on the laws. It’s also a good idea to receive training to ensure compliance.
Penalties in Michigan for violating anti-kickback laws can result in prison time and a fine. If this happens, there’s a chance that a health practitioner’s career would be forever affected as they would be prohibited from participating in certain programs. There’s also the issue of having a felony record that could change a person’s life.
It’s important to take both federal and Michigan’s anti-kickback laws seriously. One of the challenges that physicians have is that some of the language used to outline legal requirements is broad and open to interpretation. There are often scenarios where a physician is genuinely unaware that their actions do not comply with the law. If they get investigated, misunderstanding the statutes and ignorance of the law probably won’t change the outcome since it hasn’t in the past.
As a result of the potential financial burden, any physician that has been charged with violating anti-kickback laws in Michigan should work with their legal counsel to prepare a strong defense.