When is a Doctor’s Referral Fee a Crime?

It is unlawful for a doctor to receive any kind of payment or thing of value when the underlying services are payable by a Federal Health Care Program, including Medicare and Medicaid.  Services may include medical services, drugs or supplies.  The thing of value can include money, restaurant meals, event tickets, hotel rooms etc.  Less obvious might be additional and/or excessive compensation for a particular job, such as a consultancy.  In legal terms such compensation is called a “remuneration.”

Based on the Anti-Kickback Statute, found at 42 U.S.C. § 1320a-7b(b) it is a crime to either pay or receive such remuneration.  The law indicates as follows:

(b) Illegal remunerations

(1) Whoever knowingly and willfully solicits or receives any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind—

(A) in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program, or

(B) in return for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under a Federal health care program.

The sanctions for violating the Anti-Kickback Statute includes fines and possibly extensive terms of incarceration, along with future exclusion from participation in the Federal health care programs. Under the Civil Monetary Penalties Law (CMPL), doctors also face penalties of up to $50,000 per event plus three times the amount of the remuneration.

There are certain instances when what looks like a violation of the Anti-Kickback Statute is not actually a violation.  For example, the “safe harbor” regulations set forth in Office of Inspector General Advisory Opinions.  These Opinions describe various payment and business practices that are not unlawful even thought they may appear to otherwise violation the law.