When dealing with white collar crime and fraud, federal sentencing guidelines largely reflect the amount of loss sustained. When it comes to the federal Anti-Kickback Statute (AKS)- which makes it a crime to seek, offer, give or receive any remuneration in exchange for the referral of a health care service- the loss is the amount of reimbursement from a federal healthcare program (Medicare, Medicaid, Tricare, etc.) for any service during the illicit referral/kickback relationship, or the aggregate amount of the kickback, whichever is greater. According to this methodology, a typical AKS loss calculation only involves insurance programs utilizing federal monies and does not involve any reimbursement from private insurers.
This calculus has now changed in the District of New Jersey. In the recently concluded case involving Biodiagnostics Laboratory Services, the Government in many individual prosecutions charged a violation of the Federal Travel Act in lieu of or in addition to the AKS, which makes it a crime to use the U.S. mail and facilities in interstate commerce with intent to commit certain specified “unlawful activities” (bribery under State laws is included in the definition of unlawful activities). The unlawful activity that was charged in these cases was a violation of the New Jersey Commercial Bribery statute, which makes it a crime for a physician to solicit, accept or agree to accept any benefit for knowingly violating or agreeing to violate a duty of fidelity. This resulted in including reimbursement by private insurers in the loss calculation, in some cases greatly increasing the potential term of imprisonment.
Charging the Travel Act in conjunction with a state commercial bribery statute is a “work around” of the Congressional intent behind, and limitations of, the AKS. As such, it greatly raises stakes (loss calculation) as well as legal concerns and potential legal challenges.
Healthcare providers should be aware of any arrangement that may give rise to an interpretation of a bribe or kickback being given in exchange for the referral of health care service. This includes, but is not limited to, leases, consulting agreements, and speaker fee arrangements. Frier Levitt advises providers on the intricacies of the AKS and its exceptions and Safe Harbors, as well as state commercial bribery statutes and state medical board regulations. Should you be on the receiving end of an investigation, do not respond to investigative inquiries without the benefit of counsel experienced in both health care and criminal law. Contact Frier Levitt to speak to an attorney for immediate defense representation.