Fraud and Abuse
Fraud and abuse in health care is multi-faceted and complex. Medical practices considering a transaction with fraud and abuse implications are encouraged to seek the advice of legal counsel familiar with these laws and supporting regulations, advisories, policy statements, and fraud alerts.
The Fraud and Abuse Anti-Kickback law, 42 USC 1320a-7b, and the Stark Ethics-in-Patient Referral law, 42 USC 1395nn, are the most prominent pieces of fraud and abuse legislation. The Federal Civil False Claims Act, 31 USC 3829-3733, also is a significant fraud and abuse statute that physician practices should be aware of.
Both the Anti-Kickback statute and the Stark law must be examined to assure legality of an anticipated transaction; a legal transaction under the Anti-Kickback statute may be illegal under the Stark law and vice versa.
The definitions and exceptions under each of these statutes and their implementing regulations are critical. In addition to exceptions, enforcement regulations under the Anti-Kickback statute have identified certain "safe harbors." A "safe harbor" specifies various payment and business practices that potentially implicate otherwise prohibited inducements but are somewhat innocuous. To date the OIG has identified 22 safe harbors. 42 CFR 1001.952. The OIG has said that an arrangement that meets an applicable safe harbor generally is fully protected from both criminal and civil liability under the Anti-Kickback statute yet failure to come fully within a safe harbor
does not necessarily mean that the transaction is illegal.
The federal Department of Health and Human Services (HHS) enjoys enforcement authority for both of these laws; the Office of Inspector General (OIG), is the primary enforcement agency for violations of the Anti-Kickback statute and the Centers for Medicare and Medicaid Services (CMS) is the primary enforcement authority for Stark violations. The Department of Justice (DOJ) has enforcement authority for criminal violations of the fraud and abuse laws.
The False Claims law imposes liability upon anyone who knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the government.