Phantom Billing and False Claims Under the AKS

Phantom Billing and False Claims Under the AKS at a Glance

Phantom billing and false claims under the Anti-Kickback Statute (AKS) involve submitting claims for services that were never rendered or were improperly induced through kickbacks, leading to violations of both the AKS and the False Claims Act (FCA). These violations are serious offenses under federal law, with significant criminal and civil penalties, including fines, imprisonment, and the potential for qui tam lawsuits by private relators.

The Legal Framework

The Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), prohibits the offering, paying, soliciting, or receiving of remuneration to induce or reward referrals of items or services payable by a federal health care program. Violations of this statute are considered felony offenses, punishable by a fine of up to $100,000 or imprisonment of up to 10 years, or both.

Under 42 U.S.C. § 1320a-7b(g), any claim that includes items or services resulting from an AKS violation is automatically considered a false or fraudulent claim under the False Claims Act (31 U.S.C. ch. 37, subch. III). This provision significantly expands the scope of liability, as it transforms AKS violations into FCA violations without the need for additional proof of fraud.

The False Claims Act (31 U.S.C. §§ 3729–3733) provides for civil penalties and allows for qui tam actions by private relators. Relators may receive a portion of the proceeds from the government’s recovery, with the percentage varying depending on whether the government intervenes in the case. Specifically, a relator receives 15–25% if the government proceeds with the action, 25–30% if the government declines, and no more than 10% if the action is based primarily on public disclosures.

The statute of limitations for False Claims Act actions is governed by 31 U.S.C. § 3731(b), which requires that a civil action be brought within the later of six years from the violation or three years after the responsible U.S. official knew or should have known of the material facts. This period is capped at 10 years from the date of the violation.

Under the U.S. Sentencing Guidelines (U.S.S.G. § 2B4.1), violations of the AKS that involve commercial bribery or kickbacks are subject to a base offense level of 8, with additional enhancements based on the value of the bribe or the improper benefit conferred.

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 exploration of related topics, visit the AKS Defense Research Topics desk, the statute explainer, the safe-harbor research note, the AKS/Stark overlap analysis, recent decisions, and the FAQ pages.