What Are Kickback Schemes in Healthcare Fraud?

Below, False Claims Act and healthcare fraud attorney Tony Munter discusses kickback schemes in regard to healthcare fraud including examples. For more information on this or another whistleblower topic, call today to set up a free consultation.

What Are Kickbacks?

Well, that’s interesting. Under both the anti-kickback statute which applies to healthcare and the stark anti-self-referral law, a kickback can be cash or can be anything of value essentially. It doesn’t have to be money. It can be something of value to whoever is receiving the kickback. As long as that kickback is provided with the intent of inducing the doctor or the healthcare provider to do something, it can possibly be a kickback and therefore illegal, under at least one if not two laws with respect to healthcare.

Kickback Violations

Well, there have been kickback cases in healthcare for almost every kind of service that you could really think of to direct patients from one facility to another, or there’s an incorrect financial inducement or interest. There have been kickbacks used to promote pharmaceuticals and medical devices. There are all kinds of kickbacks involved in healthcare.

The point here is that you, as a healthcare consumer, are supposed to be able to go to your doctor and get unfettered advice from them, based on what the medical status of your case presents to the doctor. All of that could go out of the window because of kickbacks to a big hospital or from a big company or something like that because of financial pressure as a result of kickbacks. It would very hard to see how anyone could get the appropriate medical advice if kickbacks were involved.

That’s really what’s at stake here with a kickback. It is the business interference in the judgment of the medical professionals as to what kind of care you should get. So that’s why kickbacks become a very big deal in the False Claims Act.

Under What Circumstances May an FCA Case be Brought Due to Kickbacks?

If there are kickbacks in healthcare under the anti-kickback statute and under the Stark anti-self-referral law, a kickback is considered to be a false claim. So, kickbacks are a big deal in the False Claims Act world. It makes it easier to prove liability under the False Claims Act. Usually, when there are kickbacks involved, it’s relatively big business so it’s likely to be a big case as well.

Why Are Kickbacks An Issue Within the Healthcare Industry?

There’s just so much money in healthcare and so much money in directing a patient to one service provider or another, selling one medical device or another, or selling a prescription one kind or another. The temptation to induce wrongful practices is very high. Sometimes, kickbacks are obvious and sometimes they are more subtle, but there’s just an awful lot of money to be made if one can direct a lot of people to one kind of healthcare product or another.

As a result, unfortunately, some companies have succumbed to the temptation of illegal inducements and that’s really why kickbacks have become an issue. Nobody wants these companies to interfere with or unduly influence the advice that doctors and medical professionals give patients. So as a result, some very tough laws are out there to prevent kickbacks within the healthcare industry.

Unique Aspects of Kickback Cases

I think the fact that if you can show that there were kickbacks, then you have a direct line to liability under the False Claims Act. That’s what makes them unique. It’s hard. You can show liability very directly if you can show that there was a kickback. Now, somebody has to actually do a kickback, but it can make for a strong case out of the False Claims Act.

What Should Someone be Prepared For if They’re Going Through the FCA Process With Regards to Kickbacks?

They should be prepared to demonstrate and explain what was illegal about the inducement, why it was wrongful inducement, why it was a kickback, and what services were expected in exchange for the kickback.

Healthcare Fraud Kickback Schemes