Anti-Kickback Statute (AKS)

At Barrett Johnston, we often hear from healthcare professionals who are confused about what exactly counts as an illegal kickback. The Anti-Kickback Statute (AKS) is the federal law that makes it a crime to exchange anything of value in order to generate referrals for healthcare services paid for by federal programs like Medicare or Medicaid.

The AKS is broad and covers both sides of the transaction — those who offer kickbacks and those who accept them. Kickbacks can take many forms, including cash, gifts, free rent, steep discounts, or even paid vacations. The idea behind the statute is straightforward: healthcare decisions should be made based on what is best for the patient, not financial incentives that distort medical judgment.

Violating the AKS can lead to criminal penalties, civil fines, exclusion from federal health programs, and liability under the False Claims Act. For example, if a hospital pays physicians bonuses tied to Medicare referrals, those claims could be deemed fraudulent, triggering both FCA liability and AKS prosecution.

Congress first passed the statute in 1972, with amendments in the 1980s and beyond expanding its reach. To balance enforcement with legitimate business arrangements, the law recognizes certain “safe harbors” — specific types of relationships, such as properly structured employment contracts, that are not treated as violations.

The AKS is one of the primary safeguards of healthcare integrity. It ensures patients receive care based on need, not profit-driven schemes.