Kickbacks are arrangements made between providers in which one party refers patients to another through services, goods or medicines.
Kickbacks to doctors or other healthcare providers are prohibited by two federal laws: the Anti-Kickback Statute [42 U.S. Code § 1320a–7b(b)] and the Stark Law (42 U.S.C. 1395nn).
Healthcare providers are supposed to offer tests and treatments based on their knowledge of and experience, not because of financial incentives from other providers or companies. When they are motivated by kickbacks, providers make decisions that are not in the best interest of patients. That is the motivation behind our country’s anti-kickback laws.
Two U.S. laws prohibit kickbacks in the healthcare industry – the Anti-Kickback Statute and the Stark Law. According to the Office of the Inspector General, the AKS prohibits the “knowing and willful payment of ‘remuneration’ to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal health care programs.”
The Stark Law is the nickname for the Physician Self-Referral Law. The OIS says that the Stark Law prohibits “physicians from referring patients to receive ‘designated health services’ payable by Medicare or Medicaid from entities with which the physician or an immediate family member has a financial relationship, unless an exception applies.”