Elements of a Referral Kickback Under 42 U.S.C. § 1320a-7b(b)

Elements of a Referral Kickback Under 42 U.S.C. § 1320a-7b(b) at a Glance

The Anti-Kickback Statute (AKS) prohibits 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. This prohibition applies regardless of the size of the payment or the nature of the remuneration. The statute imposes significant penalties, including fines of up to $100,000 or imprisonment of up to 10 years, or both.

The Legal Framework

42 U.S.C. § 1320a-7b(b) is the core provision of the AKS. It 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. This statute applies broadly, covering any remuneration that could be used to influence a referral, regardless of whether the payment is direct or indirect.

42 C.F.R. § 1001.952 provides safe harbor regulations that outline specific circumstances under which certain types of remuneration may be permissible. These safe harbors include categories such as investment interests, space rental, equipment rental, personal services and management contracts, referral services, group purchasing organizations, and electronic health records items and services. Compliance with these safe harbors can shield otherwise impermissible payments from AKS liability.

Enforcement and Cases

Court decisions such as United States v. Greber, 760 F.2d 68 (3d Cir. 1985) and United States v. McClatchey, 217 F.3d 823 (10th Cir. 2000) have reinforced the one-purpose test, which holds that a violation of the AKS occurs if even one purpose of the payment is to induce referrals. The Greber case established that payments intended to induce a physician to use a payor's services violate the AKS even if they also compensate for legitimate professional services. Similarly, the McClatchey case confirmed that the Tenth Circuit adopted the one-purpose test, rejecting the use of a primary-purpose jury instruction. Recent enforcement actions, such as the 2024 resolution involving Precision Toxicology, demonstrate that the AKS continues to be actively enforced, with significant 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 exploration of related topics, see practice areas, the AKS explained, safe harbors research, AKS and Stark overlap, recent decisions, and FAQ.