The Grand Jury Process in Kickback Investigations

The Grand Jury Process in Kickback Investigations at a Glance

The grand jury process plays a critical role in kickback investigations, particularly under the federal Anti-Kickback Statute. This process allows prosecutors to gather evidence and obtain indictments without a trial, often serving as the initial step in criminal enforcement actions. Grand juries may be convened to review allegations of illegal remuneration aimed at inducing referrals of items or services payable by federal health care programs. The process is governed by federal statutes and procedural rules, and it is often used in conjunction with qui tam actions and other enforcement mechanisms.

The Legal Framework

The Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), 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. Violations are criminal offenses punishable by fines of up to $100,000 or imprisonment of up to 10 years, or both. These criminal charges are subject to the five-year statute of limitations for non-capital federal offenses, as outlined in 18 U.S.C. § 3282.

Qui tam actions, which allow private individuals to bring lawsuits on behalf of the government, are governed by 31 U.S.C. §§ 3729–3733. Under this framework, a relator may receive between 15 and 25 percent of the proceeds if the government proceeds with the action, and between 25 and 30 percent if the government declines to intervene. If the action is based primarily on public disclosures, the relator is entitled to no more than 10 percent of the proceeds.

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, refer to the following pages: /practice-areas/ (the AKS Defense Research Topics desk), /the-anti-kickback-statute-explained-why-referral-payments-trigger-scrutiny/ (the statute explainer), /safe-harbors-under-the-anti-kickback-statute-and-where-providers-get-tripped-up/ (the safe-harbor research note), /aks-and-stark-law-how-the-two-regimes-overlap-in-healthcare-investigations/ (the AKS/Stark overlap analysis), /recent-antikickback-statute-decisions/ (recent decisions), and /faq/ (the FAQ).