Parallel Civil and Criminal Proceedings in Kickback Cases

Parallel Civil and Criminal Proceedings in Kickback Cases at a Glance

Parallel civil and criminal proceedings in kickback cases often arise from the intersection of the Anti-Kickback Statute (AKS) and the False Claims Act (FCA). When a party is charged under the AKS, they may also face civil liability under the FCA, which allows for qui tam actions and significant financial penalties. These overlapping legal exposures create a complex enforcement landscape with potential for both criminal prosecution and civil litigation, often involving the same facts and evidence.

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 can lead to felony charges, with penalties including fines of up to $100,000 or imprisonment of up to 10 years, or both. This criminal statute forms the basis for many investigations and prosecutions by federal authorities, particularly the Department of Justice.

The False Claims Act, codified at 31 U.S.C. §§ 3729–3733, provides a civil enforcement mechanism through which individuals or entities may be held liable for submitting false or fraudulent claims to the government. A qui tam relator may receive a share of the proceeds from a successful action—15-25% if the government intervenes, 25-30% if it declines, and no more than 10% if the action is based primarily on public disclosures. This statute is instrumental in uncovering and penalizing fraudulent conduct, including kickbacks, through both government and private enforcement.

The tainted-claims rule under 42 U.S.C. § 1320a-7b(g) further links the criminal AKS with the FCA by stating that any claim containing items or services resulting from an AKS violation is considered a false or fraudulent claim under the FCA. This provision ensures that criminal conduct under the AKS can trigger parallel civil liability, enhancing the government’s ability to pursue multiple avenues of enforcement.

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.