Entrapment Defenses in Anti-Kickback Prosecutions

Entrapment Defenses in Anti-Kickback Prosecutions at a Glance

Entrapment defenses may arise in anti-kickback prosecutions when law enforcement uses undercover operations to solicit or induce unlawful conduct. While the Anti-Kickback Statute and related sentencing guidelines impose strict liability for certain actions, entrapment can serve as a potential defense if the defendant was induced by government agents to commit an offense they would not otherwise have committed. This research page outlines the legal framework, enforcement context, and federal statutory and regulatory context relevant to such defenses.

The Legal Framework

The Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), criminalizes the knowing and willful offer, payment, solicitation, or receipt of remuneration to induce or reward referrals of items or services payable by a federal health care program. Violations are punishable by a fine of up to $100,000 or imprisonment of up to 10 years, or both. The statute is enforced rigorously, and the government often relies on undercover operations to gather evidence of potential violations.

The sentencing guidelines further amplify the penalties. Under U.S.S.G. § 2B4.1, the commercial bribery and kickbacks guideline is applied to Anti-Kickback Statute violations and Medicare/Medicaid referral kickback offenses. This guideline establishes a base offense level of 8, which is then increased based on the greater of the bribe’s value or the improper benefit conferred, as determined by the table in § 2B1.1.

Enforcement and Cases

Undercover solicitations of referral payments in Anti-Kickback Statute stings have raised entrapment questions. While the government has broad authority to investigate and prosecute violations of the statute, defendants may assert entrapment defenses if the government's conduct was so coercive or persuasive that it induced the defendant to commit an offense they would not otherwise have committed. Courts have occasionally considered such defenses in the context of sting operations, though the high burden of proof required for entrapment makes such defenses rare and difficult to sustain.

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 anti-kickback defense strategies, see our practice areas overview, our statute explainer, safe-harbor research note, AKS/Stark overlap analysis, recent decisions, and our FAQ page.