1The AKS imposes criminal and civil penalties against any individual or entity that:
[K]nowingly and willfully offers or pays any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind to any person to induce such person
- To refer an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in Part under [Medicare or a state health care program],
- To purchase, lease, order or arrange for or recommend purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in Part under [Medicare or a state health care program]. 42 U.S.C. §1320a-7b; Social Security Act §1128B.
The AKS also contains a reciprocal provision making it illegal to solicit or receive remuneration in return for a prohibited referral or for purchasing, leasing, ordering or arranging for or recommending purchasing, leasing or ordering any good, facility, service or item for which payment may be made in whole or in Part under Medicare or a state health program.
56 Fed. Reg. 35,952 (1991); 42 C.F.R. § 1001.952 et seq.
2"Efforts to combat fraud were consolidated and strengthened under Public Law 104-191, the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The Act established a comprehensive program to combat fraud committed against all health plans, both public and private. The legislation required the establishment of a national Health Care Fraud and Abuse Control Program (HCFAC), under the joint direction of the Attorney General and the Secretary of the Department of Health and Human Services (HHS) acting through the Department's Inspector General (HHS/OIG). The HCFAC program is designed to coordinate Federal, State and local law enforcement activities with respect to health care fraud and abuse. The Act requires HHS and Department of Justice (DOJ) detail in an Annual Report the amounts deposited and appropriated to the Medicare Trust Fund, and the source of such deposits." Website of the Office of the Inspector General. Accessed on January 3, 2013.
3The OIG defines "discount" as a reduction in the amount a buyer (who buys either directly or through a wholesaler or a group purchasing organization) is charged for an item or service based on an arms-length transaction. The term discount does not include (and thus the safe harbor does not protect): (i) cash payments; (ii) furnishing one good or service without charge or at a reduced charge to induce the purchase of a different good or service; (iii) a reduction in price applicable to one payer but not to Medicare or a State health care program; (iv) a routine reduction or waiver of any coinsurance or deductible amount owned by a program beneficiary; (v) warranties; (vi) services provided in accordance with a personal or management services contract; or (vii) other remuneration, in cash or in kind, not explicitly described above. Rebates are defined as any discount which is not given at the time of sale.