Anti-Kickback Statute
Fraud within the healthcare industry remains one of the largest areas of recovery under the False Claims Act (“FCA”). Indeed, of the $2.9 billion dollars recovered through FCA settlements and judgements in fiscal year 2024, the second highest annual amount to date, $1.67 billion, or about 58%, came from the healthcare industry. Many of these recoveries involved violations of the Anti-Kickback Statute (“AKS”).
Kickbacks and illicit remuneration in the healthcare industry are one of the primary targets for the government in its fight against fraud. The reason kickbacks remain a primary enforcement target for the Government is because they may have a corrupting influence over healthcare providers’ medical treatment decisions, compromise patient care, and adversely affect competition in the healthcare industry.
The federal healthcare AKS is a law that criminalizes the knowing and willful payment of “remuneration” (a term encompassing transfers of anything of value including kickbacks, bribes and other payments) where at least one purpose of the remuneration is to induce or reward patient referrals involving any item or service that is paid for by federal healthcare programs such as Medicare or Medicaid. Not only is there potential criminal liability for violations of the AKS, but a claim for payment made to the federal government that is a result of an illegal kickback is a ‘false claim’ under the False Claims Act (“FCA”).
The AKS has an intent element and an action element. The intent element, knowingly or willfully, is satisfied if the provider acts with knowledge of the wrongfulness of their conduct and if at one purpose of the kickback is to induce a referral or a purchase. The AKS’ action element depends on what side of the transaction the law-breaking party is on, but it is illegal both to solicit and receive remuneration for a referral and to offer and pay remuneration for a referral. Remuneration is a broad term, encompassing anything of value, which includes traditional stores of value such as money, as well as goods and services. Free dinners, travel expenses, and speaking fees can all be considered remunerations if the purpose of the payments is to induce a referral or a purchase. Referrals include recommendations by physicians to their patients, as well as certifications and authorizations of patient ability to receive government-reimbursed care. There are several safe-harbors that provide protection for arrangements that may otherwise violate the AKS, however, the safe harbor requirements must be strictly adhered to for there to be protection.
Kickback schemes can be complex, and many demonstrate creative thinking as the perpetrators of fraud seek to circumvent the law. For example, AKS may be implicated when drug companies pay physicians to promote their drugs or devices, and to prohibit physicians from paying others for patient referrals.
Whistleblowers play a pivotal role in AKS litigation, as they can bring civil False Claims Act claims for violations of the AKS. For instance, the case against Athenahealth that ultimately resulted in the significant settlement was initiated by two whistleblowers. A party who submits a claim to a federal agency which is the product of a kickback is submitting a false claim and therefore subject to the penalties stipulated in the FCA. A whistleblower who has firsthand knowledge of the kickback scheme can bring a qui tam claim on behalf of the U.S. government and, if the case results in a settlement or successful verdict, the whistleblower can share in the government’s recovery.
Kessler Topaz Meltzer & Check has extensive experience guiding whistleblowers through AKS litigation. The firm represented the whistleblowers in a successfully resolved case involving violation of the AKS by a specialty pharmacy that was alleged to have routinely waived the copayments of Medicare patients to induce the patients to buy their drugs and services.
Kessler Topaz also litigated an FCA case involving AKS violations against Bayer Corporation, which ultimately resulted in a $40 million settlement with Bayer, after engaging in many years of litigation. As alleged in the case, Bayer paid kickbacks to doctors and hospitals to promote several of their drug products, in the form of free trips to resort locations, honoraria, speaker fees, and unrestricted educational grants. It was ultimately the whistleblower’s bravery and persistence which resulted in the successful resolution of this case. is a prime example of how whistleblowers, through the FCA, can bring action and recover a portion of the recovery against those who violate the AKS.
Kessler Topaz, as one of the largest plaintiff’s firms in the nation, has a long track record of successfully fighting healthcare fraud. Our whistleblower team is comprised of experienced attorneys who have dedicated their careers to representing whistleblowers against some of the largest healthcare companies in the world. Stepping forward and presenting knowledge of such schemes takes courage. The experienced team of whistleblower attorneys at Kessler Topaz can assist potential whistleblowers throughout the process. Consultations are free and confidential.
If you would like to advance an AKS whistleblower claim, please fill out our whistleblower consultation form, found here.