How the AKS and Stark Law Overlap in Healthcare Investigations

How the AKS and Stark Law Overlap in Healthcare Investigations at a Glance

The Anti-Kickback Statute (AKS) and the Stark Law both address improper financial relationships in healthcare, particularly those involving referrals. While the AKS is a criminal statute that prohibits offering or receiving remuneration to induce referrals payable by federal healthcare programs, the Stark Law is a civil statute that focuses on physician self-referrals for designated health services. These two regimes frequently overlap in investigations, especially when financial arrangements involve both federal program payments and physician referrals.

The Legal Framework

The Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), criminalizes the knowing and willful offering, paying, soliciting, or receiving of remuneration to induce or reward referrals of items or services payable by a federal healthcare program. Violations can result in criminal penalties, including fines of up to $100,000 and imprisonment of up to 10 years. The statute is enforced by the Department of Justice and is a felony offense.

In contrast, the Stark Law, 42 U.S.C. § 1395nn, is a civil, strict-liability statute administered by the Centers for Medicare & Medicaid Services (CMS). It prohibits physician self-referrals for designated health services to entities with which the physician has a financial relationship, unless an exception applies. The Stark Law imposes civil money penalties, including up to $15,000 per service and up to $100,000 for each circumvention scheme, as outlined in 42 U.S.C. § 1395nn(g)(3)–(4).

Both statutes provide safe harbors and exceptions to protect certain legal financial arrangements. For the AKS, these safe harbors are detailed in 42 C.F.R. § 1001.952, which includes provisions for investment interests, space and equipment rentals, personal services, referral services, and electronic health records. The Stark Law also includes exceptions, though its focus is primarily on physician self-referrals and their financial implications.

Importantly, the AKS now has a direct link to the False Claims Act (FCA), as established by 42 U.S.C. § 1320a-7b(g). This provision means that any claim that includes items or services resulting from an AKS violation is considered a false or fraudulent claim under the FCA, significantly increasing the potential penalties for violations.

The Federal Overlay

The federal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), makes it a felony to knowingly and willfully offer, pay, solicit, or receive remuneration to induce or reward referrals of items or services payable by a federal health care program. The Stark Law, 42 U.S.C. § 1395nn, separately prohibits physician self-referrals for designated health services payable by Medicare or Medicaid, on strict-liability terms. Both regimes carry safe harbors and exceptions published at 42 C.F.R. § 1001.952. State referral and fee-splitting statutes operate alongside these federal prohibitions and can apply even where no federal program payment is involved.

Reading the Research Desk

For further reading, explore related topics on our site, including our practice areas, an in-depth explanation of the Anti-Kickback Statute, a review of safe harbors, and a broader analysis of AKS and Stark Law overlap. Additionally, find answers to common questions in our FAQ section.