Update: An Investigation into the State-Level Anti-Rollback Healthcare Law | Lowenstein Sandler LLP


The Federal Anti-Recoil Healthcare Act (Federal AKS) targets bribery and corruption in the healthcare industry. There are two basic provisions of the federal AKS: one targeting the recipient of the bribe and the other targeting the bribe payer. More specifically, the law prohibits receiving “any remuneration.” . . in exchange for “referrals for health care or reimbursable purchases under a federal health insurance program, such as Medicare.”[1] And it prohibits paying any compensation “to induce” health care referrals or reimbursable purchases under such a federal program.[2]

The federal AKS is a law of incredible reach that gives federal law enforcement agencies an arsenal of weapons to target questionable trade deals in the healthcare industry. The term “remuneration” is defined in an unlimited manner to mean “anything of value”.[3] And “anything of value” simply means this: there is no de minimis remuneration under the federal AKS.[4] To prove a violation of the law, the government need only show that one of the many possible purposes of payment of remuneration was to induce the purchase of goods or services reimbursable by the federal government.[5] In addition, courts will generally not engage in a “haircut” when it comes to discerning the meaning of words such as “refer” and “recommend”, relying instead on general objectives. and prophylactics of the law.[6] Further, the plain language of the federal AKS suggests that consideration is not necessary for a pay payer (i.e. a bribe payer) to violate the law, raising the possibility that a healthcare company, supplier or individual could break the law by simply paying money to induce use of the product, even if the recipient has not agreed to use the product in exchange of money (ie even if the recipient of the “bribe” does not know it is corrupt).[7]

Given the broad scope of the federal AKS, there are a number of statutory and regulatory exceptions and “safe havens” to the law. For example, the legal restrictions do not apply to “a discount or other reduction in price” if a number of conditions are met.[8] Likewise, “a real working relationship[s]”Are protected from the prohibitions of the law,[9] just like “personal and management service contracts”,[10] as well as official “referral services”.[11] But even these safe areas usually have many and onerous requirements, and if each of these requirements is not strictly met, the conduct is subject to criminal prosecution or other enforcement action.

Compliance with the federal AKS is somewhat of an industry in itself, but federal law only represents part of the risk for healthcare companies, providers, and individuals. All but one of the 50 states, as well as the District of Columbia, have similar commercial bribery laws that target bribery in the health care sector.[12] And of those 51 jurisdictions, 35 prohibit bribes and the like in the healthcare sector, even though the goods or services are only reimbursable by private health insurance and involve no public money. These additional state laws and regulations therefore often go far beyond their federal counterparts. Accordingly, any full and comprehensive analysis of the anti-recoil exposure of an individual or entity necessarily requires a separate consideration of these analogues of state law.

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* The graph reflects updates as of December 11, 2021.

[1] 42 USC § 1320a-7b (b) (1).
[2] 42 USC § 1320a-7b (b) (2).
[3] For example, United States v Narco Freedom, Inc., 95 F. Supp. 3d 747, 756 (SDNY 2015) (citing Klaczak v. Consol. Med. Transp., 458 F. Supp. 2d 622, 678 (ND Ill. 2006)).
[4] See State Medicare and Health Care Programs: Fraud and Abuse; Safe Harbor Reviews under the Anti-Recoil Law and Civilian Monetary Penalty Rules for Beneficiary Incentives, 81 Fed. Reg. 88368, 88379 (December 7, 2016) (“[T]The anti-bribery law does not provide any exceptions for goods or services of nominal value. ”); State Medicare and Health Care Programs: Fraud and Abuse; OIG Anti-Recoil Provisions, 56 Fed. Reg. 35952, 35954 (July 29, 1991) (dismissing commentators’ appeal to de minimis safe port).
[5] See, for example, United States v. Nagelvoort, 856 F.3d 1117, 1130 (7th Cir. 2017); United States v. Borrasi, 639 F.3d 774, 781-82 (7th Cir. 2011); United States v. Kats, 871 F.2d 105, 108 n.1 (9th Cir. 1989); United States v. Greber, 760 F.2d 68, 71-72 (3d Cir. 1985); Polk County v. Peters, 800 F. Supp. 1451, 1455-56 (ED Tex. 1992) (holding that an agreement by a hospital to grant a doctor an interest-free loan in return for the exclusive use of the hospital doctor for his patients was illegal and therefore inapplicable, notwithstanding that “the hospital may well have been more or less motivated by a legitimate desire to make better medical services available to the community”).
[6] United States v. Polin, 194 F.3d 863, 866 (7th Cir. 1999) (upholding the conviction of the accused operating a pacemaker monitoring business who offered to pay a pacemaker sales representative to refer patients to the business, even though the sales representative was not the ultimate decision – manufacturer on which the company was selected to monitor the pacemaker); see also United States v. Patel, 778 F.3d 607, 612-16 (7th Cir. 2015) (rejecting the argument of a defendant physician that “referral” cannot, by definition, take place when a patient “independently chooses a provider ”without“ physician input ”, the reasoning that the purpose of the law extends the meaning of“ reference ”to the medical necessity certifications and recertifications of the respondent physician for services provided by a health care service to home that paid him bribes); cf. OIG Consultatif Op. N ° 99-8, July 13, 1999 (vaguely referring to new chiropodist patients obtained as a result of free screenings in shoe stores as “referrals”).
[7] See Hanlester Network v. Shalala, 51 F.3d 1390, 1397 (9th Cir. 1995); Vana vs. Vista Hosp. Sys., Inc., No. 233623, 1993 WL 597402, at * 7 (Cal. Super. Ct. Riverside Cty. November 15, 1993) (noting that an agreement may be illegal even if only one of the parties has the reprehensible intention).
[8] 42 USC § 1320a-7b (b) (3) (A); 42 CFR § 1001.952 (h).
[9] 42 USC § 1320a-7b (b) (3) (B); 42 CFR § 1001.952 (i).
[10] 42 CFR § 1001.952 (d).
[11] 42 CFR § 1001.952 (f).
[12] Some of them are arguably even more onerous than federal law. For example, NJ Admin. Code § 13: 45J-1.3 (c) (prohibiting a physician from accepting from a pharmaceutical company “any item of value which does not advance disease education or treatment”, including “pens, notepads, notepads, mugs or other items with a company or product logo, [as well as] floral arrangements’).


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