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Fraud and Abuse Enforcement- Anti Kickback and Stark Laws

2012-2013 was a big year for fraud and abuse enforcement, as the Justice Department set a new record for healthcare fraud recoveries with the $4.9 billion it collected in settlements and judgments.

This record of high recoveries is on track to continue through 2013. Healthcare Journals and news articles alike, all report similar findings. Intense healthcare fraud and abuse investigations are on the rise; an increase in funding to this area of government keeps it growing by leaps and bounds. In the past months, the following headlines are just a sample of what is making the news:

  • Manhattan Hospital CEO Faces 2-3 Years in prison for pleading guilty on July 11 to charges stemming from kickbacks he extracted from an employee in exchange for arranging a bonus.
  • Philadelphia physician accused of receiving kickbacks from a provider in exchange for referring Medicare and Medicaid patients.  This nursing home doctor faces up to 25 years in jail after kickback conviction.
  • Government Intervenes in physician compensation case, alleging compensation for referrals in Alabama.

Passed by Congress in 1972, the federal anti-kickback law's main purpose is to protect patients and federal health-care programs from fraud and abuse by eliminating the corrupting
influence of money. Straightforward but broad, the law states that anyone who knowingly and willfully receives or pays anything of value to influence the referral of federal health-care program business, including Medicare and Medicaid, can be held accountable for a felony. Bribery statues also make it a violation to receive compensation or non-cash gifts in exchange for steering business or service contracts. Violations of the law are punishable by up to five years in prison, fines up to $25,000, administrative civil money penalties up to $50,000, and exclusion from participation in federal health programs.

There had been some judicial decisions regarding the “knowingly and willfully” portion of the law that made prosecutions more difficult – proving “intent” can be tricky.  The Patient Protection and Affordable Care Act (PPACA) clarified the knowledge standard under the Anti-Kickback Statute.  The new law provides that a person need not have actual knowledge that the alleged activity violates the Anti-Kickback Statute or that there be a specific intent to commit a violation of the Anti-Kickback Statute. 

This “softened” definition, will make it much easier for the government
to bring prosecutions under the statute. It will take away much of the uncertainty that had been created over the need to prove intent.

Tags: nursing home operations, skilled nursing facility, medicare