How Attorneys Can Help Clients Avoid Convictions for Healthcare Kickback Schemes

Healthcare kickback schemes are unfortunately common, but attorneys can provide valuable counsel to help clients avoid legal troubles. This article provides an overview of healthcare fraud laws, typical kickback schemes, methods for avoiding violations, and defenses if charged criminally.

What are Anti-Kickback and Healthcare Fraud Laws?

The main law prohibiting kickbacks is the Federal Anti-Kickback Statute, which makes it illegal to knowingly and willfully offer, pay, solicit or receive remuneration to induce or reward referrals or generate business reimbursable by federal healthcare programs. Violations are a felony with up to 5 years in prison and $25,000 in fines per kickback plus 3 times total damages^[1].

Other laws like the False Claims Act and the Stark Law also prohibit paying for patient referrals or recommendations. Simply put, it’s illegal in healthcare to pay for referrals or to self-refer patients^[2].

Common Kickback Schemes

Some typical kickback schemes include:

• Medical practices paying labs per test to refer patients for unnecessary testing. Over $2.8 million in fraudulent Medicare claims were filed in one recent case^[1].
• Home health agencies providing nurses and physicians with free lunches, gifts, cash or other benefits to refer or recruit more patients^[2].
• Pharmaceutical companies paying speaking fees or “consulting contracts” to doctors who prescribe their medications^[4].
• Hospitals providing surgeons with free or discounted office space and equipment in exchange for referrals^[3].

The government has been aggressively prosecuting healthcare fraud, with over $19 billion recovered from investigations since 2007^[1]. However, legal arrangements are possible if structured carefully.

How to Avoid Kickback Prosecutions

When considering financial relationships in healthcare, document legitimate purposes and fair market value compensation. Seek experienced legal counsel regarding fraud laws and contract review. Helpful tips include:

• Ensure all agreements have valid business rationales clearly articulated upfront, without reliance on referrals^[4].
• Pay fair market value rates only for items and services needed and actually provided. Carefully track hours worked or tasks completed^[4].
• Avoid lavish gifts, travel or entertainment that could appear improper. Modest meals may be acceptable^[4].
• Review OIG Alerts to avoid problematic practices government regulators have warned about^[5].
• Seek good faith legal guidance from attorneys well-versed in healthcare fraud laws when unsure if arrangements are compliant^[3].

Defenses If Charged Criminally

If charged criminally for healthcare kickbacks, possible defenses to explore with legal counsel include:

• Lack of intent – the government must prove defendants “knowingly and willfully” violated anti-kickback laws with intent to disobey or disregard the law^[1].
• Legal impossibility – defendants reasonably relied on counsel’s advice that arrangements were lawful^[3].
• Statutory safe harbors – demonstrating compliance with Anti-Kickback Statute safe harbors could negate intent to violate the law^[4].
• Government knowledge – showing the government had awareness of activities but didn’t intervene to stop them may indicate they didn’t view the conduct as unlawful^[3].

An experienced white-collar and healthcare attorney can assess the facts and determine if any defenses may apply. The complexity of fraud laws means even well-intentioned physicians and medical companies can become targets, so legal guidance is key^[3].