What Criminal Penalty May There Be for Violating the AKS?
The Affordable Care Act (ACA), also known as Obamacare, was signed into law by President Barack Obama on March 23, 2010. One of the key provisions of the ACA is the Anti-Kickback Statute (AKS), which is intended to prevent healthcare fraud and abuse by prohibiting certain financial relationships between healthcare providers, suppliers, and manufacturers. The AKS makes it illegal for individuals and entities to knowingly and willfully solicit, receive, offer, or accept anything of value in exchange for referring patients or services to a healthcare provider or supplier.
What are the Criminal Penalties for Violating the AKS?
Violating the AKS can result in severe criminal penalties. The maximum criminal penalties for violating the AKS include:
- Fine: Up to $50,000 for each violation
- Imprisonment: Up to five years for each violation
- Both Fine and Imprisonment: The court may also order both a fine and imprisonment for each violation
Criminal Liability
Individuals and entities may be held criminally liable for violating the AKS, including:
- Healthcare providers, such as physicians, hospitals, and nursing homes
- Suppliers, such as medical equipment manufacturers and distributors
- Manufacturers, such as pharmaceutical and medical device companies
- Middlemen, such as marketers and consultants
- Referrers, such as patient brokers and travel agencies
Who Can Be Held Liable?
The AKS does not only apply to healthcare providers and suppliers, but also to individuals and entities who facilitate or participate in illegal kickback schemes. The following individuals and entities may be held liable:
- Employee or agent: Employees or agents of a healthcare provider or supplier who engage in illegal kickback activities can be held liable
- Contractor or subcontractor: Contractors or subcontractors who work with a healthcare provider or supplier can be held liable
- Middlemen: Middlemen, such as marketers and consultants, who facilitate or participate in illegal kickback schemes can be held liable
- Individuals: Individuals who are not employed by a healthcare provider or supplier but who engage in illegal kickback activities can be held liable
Examples of Criminal Penalties for Violating the AKS
- In 2019, a physician was sentenced to 18 months in prison and ordered to pay a $100,000 fine for soliciting and receiving kickbacks from a medical device manufacturer in exchange for referring patients to the manufacturer’s devices
- In 2018, a hospital was sentenced to $2 million in fines and a three-year probationary period for violating the AKS by soliciting and receiving kickbacks from a pharmaceutical company in exchange for promoting the company’s products to patients
- In 2017, a pharmaceutical company was sentenced to $2.5 million in fines and a three-year probationary period for violating the AKS by soliciting and receiving kickbacks from a physician in exchange for promoting the company’s products to patients
Prevention is the Best Defense
The best way to avoid criminal liability for violating the AKS is to ensure that your financial relationships with healthcare providers and suppliers are legitimate and transparent. Here are some best practices to follow:
- Clearly document all financial relationships: Ensure that all financial relationships with healthcare providers and suppliers are clearly documented and recorded
- Obtain fair market value: Ensure that all financial relationships are at fair market value and do not exceed the value of the goods or services being exchanged
- Obtain prior approval: Ensure that all financial relationships have been approved in advance by the relevant authorities
- Conduct regular compliance audits: Conduct regular compliance audits to ensure that your financial relationships are in compliance with the AKS and other relevant laws and regulations
Conclusion
Violating the AKS can result in severe criminal penalties, including fines and imprisonment. It is essential to understand the criminal penalties for violating the AKS and to take steps to prevent illegal kickback schemes from occurring. By following the best practices outlined in this article, you can ensure that your financial relationships with healthcare providers and suppliers are legitimate and transparent, and avoid criminal liability for violating the AKS.
