Welcome to MD Ranger’s Compliance 101 series, where we break down the must-know concepts regarding physician compensation compliance. Last week we discussed Stark Law. This week, let’s tackle Stark Law’s scary older brother: the Anti-Kickback Statute, or AKS.
The Anti-Kickback Statute states that it is illegal to exchange or offer to exchange anything of value in an effort to entice or reward the referral of federal health care services or business. An obvious example is one where a hospital blatantly offers to pay physicians for referring their private practice patients to the hospital. However, even if those physicians refused the offer, the offer itself is illegal. This can happen the other way around, too. If a physician mentioned that she would send more patients from her private practice to the hospital if the hospital gave her salary a boost, that physician is violating AKS.
There are exceptions (or “safe harbors”), of course. Examples include Electronic Health Record items and services, ambulatory surgical centers, and space rentals. You can see a full list of safe harbors here.
AKS is a criminal statute – meaning violators can go to jail. But before we get into that, let’s go over a few key differences between AKS and Stark:
- Stark Law is a civil statute, so jail time is not a risk.
- Because AKS is a criminal offense, the government must prove that violators intended to break the law (i.e. were aware that their activity was illegal) to find an organization or individual guilty. When it comes to Stark Law, intent does not matter, although it can affect the severity of the fines.
- AKS forbids soliciting referrals of all federal health services from any clinician, not just doctors. Stark Law restricts physician self-referrals only. Non-physician clinicians are not restricted under Stark.
Let’s get to it! What are the penalties?
- A charge of up to $100,000 plus a prison term of up to ten years per violation
- If found guilty for additional civil penalties (such as Stark violations), fines up to $50,000 per violation plus payment of three times the assessed cost to the government
- Providers involved can be excluded from federal health programs
Okay, so repeat after me: It is illegal to solicit or reward referrals for any sort of compensation. Just don’t do it! In fact, under the False Claims Act, someone within your organization can report AKS violations to the government and even share in the settlement. So the risk of getting caught can be quite high. But how can you make sure you’re always within the lines?
Staying out of trouble is where your organization’s physician contracting procedures become very important. The stricter an organization is about defining, determining, and documenting fair market value for every arrangement, the better. If a healthcare organization is diligent about keeping a detailed contract describing every service a physician provides (even unpaid ones), tracking time sheets, ensuring accounts payable is paying physicians the amount defined in their contract, and performing regular internal audits, that organization is in a great place and is unlikely to run into many compliance roadblocks. If not? Honestly, it’s normal. To create such a streamlined physician contracting process takes a lot of work. But when you consider the costs of violating AKS, it’s worth it.
Do you have questions about compliance regulations and how they affect you? Do you think your organization could use a compliance check-up but don’t know where to start? We are here to help! Email us at info@mdranger.com to talk to one of our experts.
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