California Anti-Kickback Statute Rules You’ll Want to Know

The Anti-Kickback Statute and the Stark Law are laws aimed at ensuring that medical decision-making is premised entirely upon what is best for the patient, rather than based on the influence of monetary gain. The laws impose harsh penalties for medical professionals who accept kickbacks, pay for referrals, or otherwise give providers reason for sending patients to receive services that they do not actually need. Below we discuss a few key provisions of the Anti-Kickback laws and the physician self-referral laws. If you are facing anti-kickback or self-referral allegations, call a zealous California anti-kickback defense lawyer for advice and representation.

The Anti-Kickback Statute

The Anti-Kickback Statute (AKS) prohibits “kickbacks” for medical referrals. There’s a federal AKS as well as a state analog. Broadly, the laws prohibit the offer of anything of value in exchange for a referral for a patient who participates in a federal or state health program. Federal courts have interpreted the AKS to prohibit any arrangement in which even one purpose of the payment or offer of payment is meant to induce the referral of services, even if the payments also serve other, legitimate purposes.

The Stark Law and the California Physician Ownership and Referral Act

The federal Stark Law, also known as the physician self-referral law, prohibits physicians from referring patients to other entities with which the physician or a family member has a financial relationship. The law applies to patients who receive services paid for by Medicare, Medicaid, or other federal health programs.

California’s Physician Ownership and Referral Act of 1993 (“PORA”) and California Labor Code Section 139.3 (relating to workers’ compensation) similarly prohibit physicians from self-referrals, meaning referrals to entities in which they have any financial interest (including “any … compensation,” whether direct or indirect). PORA applies more broadly than the federal Stark Law because it applies to designated health care services regardless of the payer; PORA applies to private insurers and cash payments as well as Medicare or Medi-Cal patients. PORA is, however, limited to designated health services.

Safe Harbors and Other Exceptions in the Anti-Kickback Laws

The federal and state AKS include exceptions and safe harbors for certain kinds of payments and business activities. These types of payments or activities might at first blush trigger the anti-kickback rules, but the laws explicitly clarify that certain kinds of conduct are permissible.

California recently passed an amendment to its anti-kickback rules to address healthcare provider directories and marketing services, an important issue in the internet era. As of January 1, 2022, internet-based services advertising clinicians, booking appointments with clinicians, and providing other information about doctors to prospective patients do not give rise to anti-kickback enforcement. The carve-out applies so long as the service provider does not recommend or endorse a specific medical care provider.

The federal AKS includes several safe harbors, including the following:

• The Employee Bona Fide Safe Harbor, which excludes “any amount paid by an employer to an employee (who has a bona fide employment relationship with such employer) for employment in the provision of covered items or services.”
• Practitioner Recruitment, which excludes rewards and other payments for a practitioner’s relocation
• Lease or Rental of Office Space or Equipment
• Referral Services
• Patient Engagement and Support
• Electronic Health Records

Talk to your healthcare law attorney if you have any concerns that your payments may trigger an AKS review.

Call a California Anti-Kickback Defense Attorney for Help Defending Against AKS, Stark, or Physician Self-Referral Allegations

For help responding to anti-kickback allegations or other regulatory compliance issues, assistance with building your medical practice, or advice and representation concerning internal investigations, auditing, employment matters, governance issues, business disputes, licensing, or any other California healthcare law matter, contact the Law Offices of Art Kalantar in Los Angeles or California statewide at 310-773-0001.