Revenue Cycle Insider

Learning the legalities of remuneration could protect you in the long run.

Robert Saltaformaggio’s, JD, CPC-A, HEALTHCON 2025 presentation, “What is Your Potential Legal Liability if Your Practice is Investigated,” contained valuable information related to the anti-kickback statute to keep your office safe from legal action while conducting your day-to-day business.

Keep reading to gain knowledge you need.

Anti-Kickback Statute Defined

The anti-kickback statute (AKS) is a federal regulation that forbids the giving or accepting of payments as a way to encourage or compensate for the recommendation of business related to services or goods that are covered by Medicare, Medicaid, or other federal healthcare programs including TRICARE, Children’s Health Insurance Program (CHIP), and CHAMPVA. Any breach of the AKS is considered a serious crime and is subject to penalties including monetary fines and jail time. This includes any form of remuneration or referrals.

Penalties for violating the AKS can include the following:

• A 10-year prison sentence
• Fines up to $100,000
• Exclusion from participating in federal or state healthcare benefit programs
• Civil monetary penalties (CMPs) up to $50,000 per violation and assessments equal to not more than three times the amount of remuneration paid under the arrangement.

Remuneration defined: Anything of value or something considered transactional. This can be offered directly or indirectly to a client or a provider. Some examples given by Saltaformaggio included cash, discounts, low rent on office spaces, luxury hotel stays, meals and expensive gifts.

Referrals are also included in the AKS. Referrals include recommendations that patients receive particular items or services along with any essential authorizations and certifications that are required for the patient to access that item or service.

Understand What Counts as a Safe Harbor

Due to the broad scope of the AKS, Congress authorized the Department of Health and Human Services (HHS) and Office of Inspector General (OIG) to issue “safe harbors” for certain practices and businesses. This refers to a collection of rules that clearly outline certain financial and business activities which, despite potentially falling under the scope of the AKS, are not classified as kickbacks, bribes, or rebates.

These safe harbors offer a level of immunity from criminal and civil repercussions under the statute, provided that the practices strictly follow the conditions detailed in these rules.

Keep in mind that all of these safe harbors are complex and require extensive legal assessment to understand whether a proposed arrangement qualifies for a specific safe harbor. Also, safe harbors are not mandatory, they are voluntary and subject to change.

Navigate Safe Harbors and Personal Services

Saltaformaggio explained that the personal services and management contract safe harbor is going to be helpful if you have a 1099 independent contractor (e.g. an individual or marketing company) in your office and you want to make sure you are covered for any payments you make to that individual for referring healthcare services.

There are a few things to remember when writing up a contract with them. “You want to make sure agreements are in writing and signed by all the parties involved, and that it specifies the scope and terms of the work to be completed,” he said.

Keep in mind that remuneration paid by a principal to an agent for their services is not considered remuneration if the following criteria are fulfilled:

• The agreement is in writing and both parties have signed.
• The agreement covers all the services the agent provides to the principal for the entire term of the contract and specifies the services to be provided by the agent.
• The term of the agreement is not less than one year.
• The methodology for determining the compensation paid to the agent is:
  • Set in advance;
  • Consistent with fair market value; and  
  • Not determined in a manner that takes into account the value or volume of any referrals or business otherwise generated between the parties for which payment is made by Medicare, Medicaid, or another federal healthcare program.
• The aggregate services contracted do not exceed those that are reasonably necessary to accomplish the reasonable purpose of the services.

Protect Yourself and Your Practice

A few things Saltaformaggio wanted to emphasize included exercising extreme caution when engaging in business deals with someone who can direct business to your practice or company. Also, keep in mind that lease agreements with those who can potentially refer business to your practice are often scrutinized by the government. Be aware that if you are a medical practitioner for a hospice or home health agency, they are frequently investigated by law enforcement.

Food and dining, something that may seem to be an innocent gesture or a nice offer, can also prove problematic in the eyes of the law. Saltaformaggio warned the audience to beware of simple things like gifts being left by salespeople. Due to the AKS, you need to be cautious that your favor isn’t being “bought” through gifts like food, gift cards, tickets to events, etc.

“Donuts or some nice food or a fruit basket — all of these are technically a violation of the AKS because if you’re referring business to them and they’re giving you any remuneration or anything of value, that’s going to be a violation,” said Saltaformaggio.

Keep in mind that offering any type of financial incentive like cash, gift cards, or any type of remuneration in exchange for signing up or recommending your office’s services may violate the AKS and put you or your office in hot water.

Lindsey Bush, BA, MA, CPC, Production Editor, AAPC