What You Should Do When You Are Under Investigation for Kickbacks

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Experienced Legal Defense for California Medicare Providers Under Investigation for Taking Kickbacks

If you are a Medicare provider in California and you are under investigation for paying or receiving kickbacks, you are at risk of facing felony charges. There are important steps you need to take to protect yourself, and they start with hiring an experienced defense attorney.

According to the Centers for Medicare and Medicaid Services (CMS), Medicare pays $60 billion in fraudulent claims every year. This is roughly 10 percent of the annual Medicare budget. As a result, it is understandable why combating Medicare fraud is a top federal law enforcement priority, and this includes taking action against providers suspected of violating the Anti-Kickback Statute.

Protecting Yourself in a kickback investigation can be difficult. The Anti-Kickback Statute employs a broad definition of “referrals,” and the agents from CMS, the Federal Bureau of Investigation (FBI), the Department of Justice (DOJ), the Office of Inspector General (OIG), and a variety of other federal agencies that investigate suspected kickbacks all have extensive experience using the law to hold unsuspecting providers accountable. But, there are defenses available. If you are under investigation for violating the Anti-Kickback Statute in California, you need to start building your defense today.

What Constitutes an Illegal Kickback?

Under the Anti-Kickback Statute (42 U.S.C. § 1320a-7b), it is a violation of federal law to pay or receive any form of compensation in connection with a patient referral when payment for services is to be reimbursed through Medicare or another federal healthcare benefit program.

Why Are Kickbacks Illegal?

Congress has outlawed kickbacks for patient referrals involving Medicare and another government spending for a couple of reasons: First, payment of kickbacks leads to a drain on Medicare spending. When kickbacks are paid with Medicare reimbursements, or when kickbacks are paid in connection with treatment, medications, or medical equipment billed to Medicare that is not medically necessary, this reduces the funds that are available to provide healthcare to those who are truly in need.

Second, kickback arrangements can, at least in theory, compromise a physician’s medical judgment. If a physician has two options for providing a referral, one to a more-experienced doctor and another to a doctor who is willing to pay a kickback in exchange for getting more patients, the possibility of receiving (easy money) may be enough to sway some physicians against providing the referral that is better for the patient.

What Constitutes “Compensation” (or Remuneration) for a Referral Under the Anti-Kickback Statute?

The Anti-Kickback Statute prohibits the payment or receipt of any form of compensation or remuneration in exchange for a patient referral. While a direct cash payment is the most obvious form of remuneration, it’s not the only type of remuneration that can lead to a Medicare kickback investigation. Forms of illegal remuneration under the Anti-Kickback Statute include:

  • Direct payments of financial compensation
  • Providing rebates or gifts
  • Providing favorable lease terms or purchase pricing
  • Offering employment opportunities
  • Other arrangements that involve any form of quid pro quo in connection with a patient referral

Who Is Covered Under the Anti-Kickback Statute?

While so far we have been discussing the Anti-Kickback Statute in the context of illegal physician referrals, it is important to understand that the law is much broader in its scope. In addition to patient referrals for Medicare-reimbursed services, the Anti-Kickback Statute also covers:

  • Referrals for diagnostic testing and prescriptions
  • Referrals for home healthcare services
  • Referrals for any other service, product, facility, or other item for which full or partial payment is to be made by Medicare or another federal healthcare benefit program

What Are the Penalties for Violating the Anti-Kickback Statute?

Simply put, the penalties for violating the Anti-Kickback Statute are severe. In a criminal case, you can be convicted of a felony carrying up to a five-year prison sentence and a $25,000 fine for each prohibited kickback transaction. In a civil case, you can face fines of $50,000 per transaction plus treble (triple) damages for any amounts illegally billed to Medicare.

In addition, the government can seek additional penalties under the False Claims Act, and you may also be excluded from future participation in Medicare and other federal benefit programs.

How Do I Know if My Investigation is Civil or Criminal in Nature?

Determining whether your investigation is civil or criminal is critically important, and at The Criminal Defense Firm it is one of the first things we seek to do when representing clients in Medicare kickback investigations. Why is this so important? Because, (i) there are different defense strategies that we employ in civil and criminal cases, and (ii) if your investigation is civil in nature, we want to make sure it remains civil so that you are not at risk for going to prison. In order to determine the nature of your investigation, we will make contact with the investigators involved, and seek to obtain answers to questions like:

  • Which agency(ies) are involved in the investigation?
  • Which prosecutor(s) are evaluating the allegations against you?
  • What demands are being made by the government?
  • What has happened in the investigation to date?
  • How were you made aware that you were under investigation?

What Are Some Potential Defenses to Violations of the Anti-Kickback Statute?

The good news is that there are numerous potential defenses to violations of the Anti-Kickback Statute, from lack of knowledge to violations of your Constitutional rights. The Anti-Kickback Statute provides for a number of safe harbors as well.

1. Lack of Knowledge or Willfulness

Remember, the government has the burden of proof in all civil and criminal investigations. In order to establish civil or criminal liability for a violation of the Anti-Kickback Statute, prosecutors must be able to prove that you knowingly and willfully gave, received, or solicited remuneration in exchange for a referral. If your attorneys can cast doubt on these elements of the government’s case (for example, if there is no evidence to suggest that you willfully received compensation in exchange for a referral), this is one way to build a successful defense.

2. Violations of Your Constitutional Rights

In any case, the government must respect your constitutional rights. This includes the right to be free from unreasonable searches and seizures. The law around searches and seizures is highly complex, and you will need an attorney who can carefully analyze the government’s conduct in the investigation to determine whether you may have a Constitutional defense.

3. Anti-Kickback Safe Harbors

There are two primary categories of safe harbors that exist under the Anti-Kickback Statute. These are: (i) the Practitioner-to-Practitioner Safe Harbor, and (ii) the Practitioner-to-Other-Entity Safe Harbor.

The Practitioner-to-Practitioner Safe Harbor

Under the Practitioner-to-Practitioner, Safe Harbor, certain payments of remuneration in connection with patient referrals are exempted from liability under the Anti-Kickback Statute, even where they might lead to civil or criminal liability under other circumstances. In order for the Practitioner-to-Practitioner Safe Harbor to apply:

  • The referrals and payment of remuneration must be made in connection with the sale of practice from one practitioner to another;
  • The sale must be completed within one year of the date of the first agreement pertaining to the purchase; and,
  • After the sale, the selling physician must retire, cease practicing, or relocate to another area where he or she is not in a position to make referrals or otherwise generate business from the purchasing practitioner.

The Practitioner-to-Other-Entity Safe Harbor

In certain circumstances, payments of remuneration between practitioners and other healthcare providers (such as hospitals) in connection with the sale of a practice can qualify for safe harbor, as well. These payments will not lead to Anti-Kickback Statute liability if:

  • The period between the first agreement to purchase and the date of the sale is less than three years;
  • The practitioner selling his or her practice will not be in a position to make referrals or otherwise generate business from the purchasing entity;
  • The practice being sold is located in a health professional shortage area (HPSA); and,
  • The purchasing entity must promptly make diligent and good-faith efforts to recruit a new practitioner to take over the purchased practice in accordance with the requirements of?42 C.F.R.§ 1001.952(n).

What Should I Do to Start Building My Defense?

In order to start building your defense, there are a number of steps you need to take right away. At the The Criminal Defense Firm, we have developed a nationally recognized Emergency Defense Package that our clients can use to take proactive measures in order to limit their chances of facing civil or criminal charges. In addition to deploying our Emergency Defense Package, you should also:

  • Avoid talking to investigators without your attorney present
  • Make sure your employees do not talk to investigators without legal representation
  • Make sure you know the deadlines for responding to any subpoenas (but do not respond until you speak with an attorney)
  • Make sure your employees do not destroy any records that may be relevant to the investigation
  • Collect any records or other evidence that you think may aid your attorneys in building your defense

Get Started with a Free Consultation at The Criminal Defense Firm

If you are facing a Medicare kickback investigation in California, contact The Criminal Defense Firm now to schedule a free case evaluation with our defense team. You do not have time to waste, so call 866-603-4540 or inquire online today.

Not all attorneys of The Criminal Defense Firm are licensed in California and nothing contained in here is meant to constitute the unauthorized practice of law.
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