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Objectives
• What is the Anti-Kickback Statute
• Anti-Kickback vs. Stark Law
• Penalties for non-compliance
• Best practices
First thing’s first: call your attorney
• MD Ranger doesn’t give legal advice
• Kickbacks can be nuanced
• All matters regarding potential AKS or Stark
violations should go to your counsel under privilege
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The government needs to protect itself
from fraud and abuse
• Anti-Kickback Statute enacted
• Section 1877 of the Social Security Act, 42 U.S.C.
1320a-7b, 1972
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The law:
"Recipients and sub-recipients of Federal funds are subject to the strictures of
the Medicare and Medicaid anti-kickback statute (42 U.S.C. 1320a - 7b(b) and
should be cognizant of the risk of criminal and administrative liability under this
statute, specifically under 42 U.S.C. 1320 7b(b) 'Illegal remunerations' which
states, in part, that whoever knowingly and willfully: (1) solicits or receives (or
offers or pays) any remuneration (including kickback, bribe, or rebate) directly
or indirectly, overtly or covertly, in cash or in kind, in return for referring (or to
induce such person to refer) an individual to a person for the furnishing or
arranging for the furnishing of any item or service, OR (2) in return for
purchasing, leasing, ordering, or recommending purchasing, leasing, or
ordering, or to purchase, lease, or order, any good, facility, services or item
....for which payment may be made in whole or in part under subchapter XIII of
this chapter or a State 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."
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AKS in a “nutshell”
A criminal statute that forbids the exchange or offer to
exchange anything of value in an effort to entice or
reward the referral of federal health care services or
business.
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Tit for Tat…
• “If you send us patients from your cardiology private
practice, we’ll pay you $5,000 per patient.”
• “If you go ahead and add another zero to that
medical directorship annual stipend, you can expect
to see 25% more patients from my practice sent your
way.”
• “Thanks for signing on the dotted line. It would be
wonderful if we continued to see an increasing
amount of referrals our way.”
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Intent must be proven
• Intent to break the law must be proven in order to be
convicted
• Remember that even the OFFER to reward referrals
or offer to solicit referrals counts as violating AKS
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Referrals of…what?
• The law covers referrals of all federal health services
from any clinician, not just doctors
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Are there protections?
• Yes!
• Some activities may seem like they violate AKS but
are actually protected under “voluntary safe harbors”.
• Read all the safe harbors here:
http://www.gpo.gov/fdsys/pkg/CFR-2010-title42-
vol5/pdf/CFR-2010-title42-vol5-sec1001-952.pdf
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Safe harbors include…
• Ambulatory surgical centers
• Discounts
• EHR items and services
• Electronic prescribing items and services
• Equipment rental
• Health centers
• Investment interests
• Payments made to bona fide employees
• Personal services and management contracts
• Practitioner recruitment
• Referral services
• Space rental
• Warranties
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AKS vs. Stark
• Physician Self Referral Law, commonly referred to as
“Stark Law” enacted
• Section 1877 of the Social Security Act, 42 U.S.C.
1395.nn• Consists of original statute (Phase I, 1989)
• Phase II into effect in 1996
• Phase III throughout the 2000’s
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AKS vs. Stark
AKS
• Prohibits soliciting or offer
of anything of value for
referrals or to generate
Federal healthcare
program business
• Referrals from anyone
• Any service or item
• Criminal
• Intent must be proven
Stark
• Prohibits a physician from
referring Medicare/Medicaid
patients for DHS to an entity with
a financial relationship with that
physician
• Referrals from a physician
• DHS
• Civil
• Intent doesn’t have to be proven
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AKS and the False Claims Act
• Enacted during the Civil War, the law imposes liability
on people/organizations who defraud government
programs
• Payments to a hospital for services that violate AKS
could be subject to penalties because they defraud
the government
• Allows whistle-blowers to bring qui tam lawsuits and
sue on behalf of federal government for AKS
violations
• Yikes!
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Violating AKS is a serious crime.
Here’s what could happen:
• Criminal penalties are up to $25,000 plus up to a
five-year prison term per kickback violation
• Additional civil penalties are as much as $50,000
per kickback violation in addition to three times the
amount of damages sustained by the government
• Providers can be excluded from federal healthcare
programs
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Check out MD Ranger resources
• Compliance checklists
• Structuring physician contracting programs
• How to identify risky contracts
• And more
www.mdranger.com/resources
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Have a written and signed contract
• Have written contracts for physician services with
payment terms set in advance!
• Both the hospital and the physician must sign the
agreement
• Though this step is obvious, sometimes it can be
quite challenging to determine if a contract exists.
• No money exchanged for the service? STILL
CREATE A CONTRACT
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Document non-monetary
compensation
• Are you providing non-monetary payments to
independent physicians (that you aren’t providing to
the entire medical staff) that exceed the cap? • Parking spaces?
• Meals?
• Electronic health records?
• Overhead from charity events involving doctors?
• Joint marketing?
• Office artwork?
• Technology?
• Infrastructure?
• ….?22
Be specific about the service
• The services to be provided must be described in
detail in the contract.
• Don’t forget important details, like number of hours in
administrative agreements
• Record keeping for time and performance of duties
• Periodic ‘audits’ of time cards to see if they are
accurate, meetings attended, reports filed, etc.
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Set rates at fair market value
• Check the fair market value documentation with the agreement
to ensure that methods/data are sufficient
• If documentation or methods are questionable, look up market
data for the service
• If no documentation exists and payment rates were determined
by something other than fair market value, flag the contract for
follow up
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Don’t pay for referrals! Period.
• Paying for referrals or bribing physicians in any way
is illegal
• Due diligence is required when reviewing contracts to
ensure that the payments are not for referrals; lack of
documentation leaves you vulnerable
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Compliance is mandatory
• Ensure that the hospital is paying the appropriate
rates as per the agreement (AP is great for this)
• Check physician documentation is up to standard,
medical directorship hours especially
• Read through the description of the service and
ensure it is not only being adhered to, but also if the
service is still needed
• Check up on ‘special deals’ that didn’t follow standard
procedures or legacy contracts that haven’t changed
in years
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Audit your contracts
• Review the entire auditing process and document this
discussion or meeting in full
• Create a file or document to capture your internal
process. Include:• Memos written by responsible executive or leader
• Minutes from meetings
• Flags and notes
• List of follow up items in one place, as collected from above
documents, notes, memos, and emails
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