Updated October 22, 2026: The Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)) is a federal criminal law, passed in 1972, that makes it a felony to knowingly and willfully offer, pay, solicit, or receive anything of value to induce or reward patient referrals for services paid for by Medicare, Medicaid, or other federal health care programs. Each violation carries up to 10 years in prison and a $100,000 fine, and can also lead to civil penalties and exclusion from federal health care programs.
Congress added the Anti-Kickback Statute to the Social Security Act in 1972 to protect federal health care programs and the patients they serve. Kickbacks can lead to unnecessary tests and treatment, higher costs for taxpayers, and patients being steered to providers based on payments rather than on medical need.
The Anti-Kickback Statute is often discussed alongside the Stark Law, a separate civil law passed in 1989 that limits physician referrals to entities they have a financial relationship with. Below, our healthcare fraud defense lawyers explain what the Anti-Kickback Statute prohibits, how prosecutors prove intent, the safe harbors that protect common business arrangements, and the penalties providers face.
The Anti-Kickback Statute
The Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)) applies to anyone who offers, pays, solicits, or receives “remuneration,” meaning anything of value, directly or indirectly, in cash or in kind, in return for referring a patient or for ordering, arranging, or recommending any item or service paid for by a federal health care program.
The law reaches both sides of the arrangement and covers almost any type of healthcare business relationship, from physician contracts and leases to marketing agreements and patient incentives. To convict, the government must prove the defendant acted knowingly and willfully. Cases are investigated by HHS-OIG and the FBI and prosecuted by the Department of Justice, often alongside a civil False Claims Act case.
Are Kickbacks Illegal?
Yes. Paying or accepting a kickback for referrals of patients covered by Medicare, Medicaid, TRICARE, or another federal health care program is a federal felony under the Anti-Kickback Statute. Both sides are liable: the person who offers or pays the kickback and the person who requests or accepts it. Kickbacks involving labs, recovery homes, and treatment facilities can also be illegal when the patient has private insurance under a separate law called EKRA.
What Are Examples of Kickbacks in Healthcare?
A kickback is anything of value given to influence a referral, not just cash. Common examples include per-referral payments, sham medical directorships, below-market rent, lavish meals and trips, fake speaking or consulting fees, and commissions paid to marketers based on the number of patients they bring in. Here is how those arrangements typically look in practice:
- Cash for referrals: paying or receiving cash for every Medicare or Medicaid patient referred to a home health agency, lab, or clinic.
- Sham speaking fees: a drug company paying a physician large fees for a brief, poorly attended, or fake presentation as a reward for prescribing its drug.
- Bogus medical directorships: paying a doctor a “medical director” salary for little or no real work to secure their referrals.
- Sweetheart leases: renting office space or equipment to a referring physician for free or well below fair market value.
- Routine co-pay waivers: waiving Medicare co-payments to attract patients without a documented, individual assessment of financial need.
- Lavish gifts and entertainment: expensive meals, sports tickets, or trips given to influence which device, drug, or service a physician chooses.
- Fake research grants: a lab paying referring physicians for “clinical data” it never uses for research.
- Volume-based commissions: paying 1099 marketers or sales reps based on the number of Medicare or Medicaid referrals they generate.
- Inflated MSO fees: paying physicians excessive “management” fees or investment distributions that are really rewards for referrals to affiliated labs.
- Discount swapping: a lab giving steep discounts on private-pay work in exchange for a provider’s Medicare referrals.
Who Gets Charged Under the Anti-Kickback Statute?
The Anti-Kickback Statute applies to anyone, not just doctors. Prosecutors regularly charge everyone in the chain of a referral scheme, including:
- Physicians and other licensed providers who accept payments, perks, or investment returns tied to their referrals.
- Marketers and patient recruiters, including independent 1099 sales reps and lead-generation companies paid per patient, per test, or per order.
- Laboratories that pay for specimens or test orders. See our laboratory fraud defense page.
- Telehealth companies that pay doctors to approve orders for tests, braces, or prescriptions generated by telemarketing.
- Durable medical equipment (DME) suppliers and DME companies that buy doctors’ orders.
- Pharmacies and drug manufacturers that use co-pay assistance, meals, travel, or speaker fees to drive prescriptions.
- Hospices and home health agencies that pay for patient referrals. See our hospice fraud defense page.
- Executives and owners who designed or approved the arrangement, even if they never spoke to a referral source.
Patients can be involved too. Paying beneficiaries to sign up for services, or routinely waiving their co-pays to attract them, can violate both the Anti-Kickback Statute and the beneficiary inducement provisions of the Civil Monetary Penalties Law.
Industries Facing the Most Anti-Kickback Scrutiny
| Medical Niche | Description & Key Risk Areas | Example of Prohibited Conduct |
| Clinical Laboratory Testing | Labs rely entirely on physician orders for services like bloodwork, genetic testing, and toxicology. Healthcare fraud enforcement targets how labs financially incentivize doctors to route patient specimens to their facilities. | Paying disguised “specimen processing fees” to referring physicians, or providing free in-office phlebotomists to a clinic in exchange for guaranteed testing volume. |
| Pharmaceuticals | Drug manufacturers compete fiercely for physician prescriptions. AKS risks revolve around disguised inducements used to influence prescribing behavior, particularly for high-cost or specialty medications. | Disguising kickbacks as lavish meals, excessive “speaker fees,” or sham consulting contracts given to high-prescribing doctors to boost drug sales. |
| Home Healthcare | Agencies depend on hospital discharge planners and primary care providers to refer post-acute patients. Scrutiny focuses on illegal arrangements used to “buy” these lucrative patient pipelines. | Giving medical directors inflated stipends for little to no actual work, or providing free administrative staff to a doctor’s office in return for Medicare home health referrals. |
| DME Suppliers | Durable Medical Equipment (DME) companies (supplying braces, wheelchairs, CPAP machines) require a physician’s prescription. DME suppliers are an historic target for fraud scrutiny by OIG for kickbacks paid to doctors or third-party lead generators. | Paying independent marketers, lead-generation companies, or doctors per-item “commissions” for ordering medically unnecessary orthotic braces for Medicare patients. |
| Hospice Services | Hospices rely on patient referrals from nursing homes, hospitals, and physicians. Hospice providers face AKS scrutiny for aggressive marketing and illegal financial ties used to secure lucrative Medicare daily rates for end-of-life care. | Paying a nursing home inflated room and board rates above fair market value, or offering referring physicians sham “medical director” titles to secure a steady stream of terminally ill patients. |
| Telemedicine | Telehealth has seen massive AKS enforcement in recent years. Risks typically involve complex networks where marketers, telehealth platforms, and pharmacies or labs collude to mass-generate federal healthcare claims. | Telemedicine platforms paying doctors to blindly sign off on genetic tests or prescriptions generated by aggressive telemarketing, and then routing those orders to specific partner labs for a cut of the profits. |
Intent Under the Anti-Kickback Statute: What Prosecutors Must Prove
The Anti-Kickback Statute is not a strict liability law. To convict, the government must prove that the defendant acted knowingly and willfully. In most cases, intent is the central fight, and it is where a strong defense is usually built.
What “Knowingly and Willfully” Means
Acting “knowingly” means acting voluntarily and deliberately, not by mistake or accident. Acting “willfully” means acting with the intent to do something the law forbids. Courts have generally held that the government must show the defendant knew the conduct was unlawful in a general sense, even if the defendant did not know which statute it violated.
The “One Purpose” Test: United States v. Greber
In United States v. Greber, 760 F.2d 68 (3d Cir. 1985), a cardiologist’s company paid referring physicians “interpretation fees” for heart monitoring tests. The court held that if one purpose of a payment is to induce referrals, the statute is violated, even if the payment was also compensation for real services. Most federal circuits have since adopted the one-purpose test.
This is why prosecutors focus on internal emails, text messages, and sales targets. A legitimate service agreement can still be charged as a kickback if the evidence shows referrals were one reason the money changed hands.
What the 2010 Affordable Care Act Changed
In 2010, Congress amended the statute to say that a person does not need actual knowledge of the Anti-Kickback Statute, or a specific intent to violate it, to be guilty (42 U.S.C. § 1320a-7b(h)). This overruled cases such as Hanlester Network v. Shalala (9th Cir. 1995), which had required proof that the defendant knew about the statute itself. Today, “I didn’t know this law existed” is not a defense. What still matters is whether the defendant knew the conduct was wrong and intended to pay or receive money for referrals.
How an Intent Defense Is Built
Because the government must prove intent beyond a reasonable doubt, the defense focuses on showing the payment had a legitimate purpose and that the client acted in good faith. Common strategies include:
- Fair market value evidence: independent valuations showing the compensation matched the services actually provided.
- Proof the services were real: time logs, work product, and witnesses showing the medical director, consultant, or employee actually did the work.
- No link to referral volume: showing pay was fixed in advance and did not rise or fall with the number of patients, tests, or prescriptions.
- Reliance on legal or compliance advice: evidence the client fully disclosed the arrangement to counsel and followed the advice received, which can undercut willfulness.
- Safe harbor structure: even when an arrangement misses a technical requirement, showing it was designed to fit a safe harbor supports good faith.
- Limited knowledge of the scheme: showing an employee, physician, or executive did not know how others were paid or why.
In our United States v. R.M. case, presentations to agents and prosecutors focused on exactly these issues, and the government declined to prosecute our client. Learn more about our anti-kickback defense lawyers.
Anti-Kickback Statute Safe Harbors
The safe harbors are set out in OIG’s regulations at 42 C.F.R. § 1001.952. Meeting a safe harbor is voluntary. An arrangement that doesn’t fit one is not automatically illegal; it is judged on its facts, including the intent behind it. But every requirement must be met to get the protection, and a missing written agreement, an expired term, or pay that varies with referrals can take an arrangement outside the safe harbor.
| Safe Harbor / Statutory Exception | Description & Key Requirements |
| Bona Fide Employment | Protects any amount paid by an employer to a legitimate W-2 employee for providing covered healthcare items or services. |
| Personal Services & Management Contracts | Protects independent contractor relationships. Requires a signed, written agreement of at least one year that specifies all services. Compensation must be set in advance, at fair market value, and completely untied to the volume or value of referrals. |
| Space & Equipment Rental | Protects commercial leases. Requires a written agreement of at least one year specifying the exact premises or equipment. Rent must be set in advance at fair market value and cannot account for the volume of referrals generated between the parties. |
| Discounts & Rebates | Protects price reductions by sellers to buyers, provided the discount is properly disclosed and accurately reflected in the costs claimed or charges submitted to the federal healthcare program (e.g., Medicare or Medicaid). |
| Group Purchasing Organizations (GPOs) | Protects administrative fees paid by vendors to GPOs. Requires a written agreement stating the fee structure (typically a fixed amount or 3% or less of the purchase value) and proper written disclosure to the purchasing healthcare providers. |
| Value-Based Arrangements (2020 Final Rule) | Added by OIG in a final rule effective January 19, 2021. Three safe harbors protect arrangements within a value-based enterprise: care coordination arrangements (in-kind help only, with the recipient paying at least 15% of the cost), arrangements where the enterprise takes on substantial downside financial risk, and arrangements with full financial risk. None protect payments made to induce referrals outside the value-based arrangement. |
| Cybersecurity & Electronic Health Records (EHR) | Protects the donation of non-monetary remuneration (such as software and IT services) used predominantly to maintain EHR or enhance cybersecurity. For EHR, the recipient physician usually must pay at least 15% of the donor’s costs. |
| Warranties | Protects any remedy or price reduction provided by a manufacturer or supplier to a buyer as part of a product warranty, provided the terms are fully disclosed and accurately reported to the government upon request. |
| Waiver of Patient Copayments | Protects hospitals and clinics that waive Medicare inpatient copayments or deductibles, provided the waiver is not advertised, is not routinely offered, and is strictly based on a documented, individualized assessment of the patient’s financial need. |
What Are the Penalties for Anti-Kickback Statute Violations?
Anti-Kickback Statute Criminal Penalties
The Anti-Kickback Statute is a criminal law. Each violation of the AKS is a felony punishable by a fine of up to $100,000 and 10 years in prison.
Federal Healthcare Program Exclusion
A conviction for a program-related crime, including an Anti-Kickback violation, requires HHS-OIG to exclude the provider from Medicare, Medicaid, and all other federal health care programs for at least five years. OIG can also exclude providers for kickback conduct without a criminal conviction. Learn more in our guide to Medicare exclusion.
Civil Monetary Penalties
Under the Civil Monetary Penalties Law, HHS-OIG can impose penalties for each kickback, plus an assessment of up to three times the total remuneration offered, paid, solicited, or received. These penalties don’t require a criminal conviction, and the per-kickback amount is adjusted for inflation each year.
The Anti-Kickback Statute and the False Claims Act
Since 2010, any claim to Medicare or Medicaid that includes items or services resulting from a kickback is a false claim under the federal False Claims Act (42 U.S.C. § 1320a-7b(g)). That means a single kickback arrangement can lead to both a criminal case and a civil case, and every claim tied to the arrangement can carry its own penalty.
Under the False Claims Act, the government can recover:
- Three times its losses (treble damages), and
- A civil penalty for every false claim, currently $14,308 to $28,619 per claim, adjusted for inflation.
Because a lab, pharmacy, or practice may submit thousands of claims tied to one referral source, False Claims Act exposure can quickly exceed the criminal fines.
Qui Tam Whistleblowers
The False Claims Act allows private individuals, often current or former employees, billing staff, or competitors, to file a qui tam lawsuit on the government’s behalf. These cases are filed under seal, so the company often doesn’t know about them while the government investigates. Whistleblowers can receive 15% to 30% of the government’s recovery, which is why many Anti-Kickback cases start with an insider complaint rather than an audit.
If you receive a civil investigative demand, subpoena, or contact from an HHS-OIG agent, assume a whistleblower complaint may already be under seal. See our guide on what to do when HHS-OIG contacts you.
EKRA: Kickback Law for Labs, Recovery Homes, and Treatment Facilities
The Eliminating Kickbacks in Recovery Act (EKRA), 18 U.S.C. § 220, was passed in 2018 as part of the SUPPORT for Patients and Communities Act. It makes it a federal crime to knowingly and willfully pay or receive anything of value for referrals to a laboratory, recovery home, or clinical treatment facility.
EKRA matters because it reaches further than the Anti-Kickback Statute in key ways:
- It covers private insurance. EKRA applies to any “health care benefit program,” including commercial insurers, not just Medicare and Medicaid.
- Its exceptions are narrower. Some arrangements protected under an Anti-Kickback safe harbor are not protected under EKRA. In particular, EKRA’s employee exception does not cover pay that varies with the number of patients referred, tests performed, or amounts billed, which puts commission-based lab sales compensation at risk.
- Its penalties are steeper. Each violation is punishable by a fine of up to $200,000, up to 10 years in prison, or both.
Labs that pay marketers or sales staff on commission, or that work with sober living homes or addiction treatment centers, should have their compensation plans reviewed under both laws. Learn more about our laboratory fraud defense and kickback compliance services.
Anti-Kickback Statute vs. Stark Law
The Stark Law, also called the Physician Self-Referral Law (42 U.S.C. § 1395nn), prohibits physicians from referring Medicare patients for certain “designated health services,” such as lab testing, imaging, durable medical equipment, and hospital services, to an entity they or an immediate family member have a financial relationship with, unless an exception applies. CMS administers the law.
The biggest difference is intent. The Stark Law is a civil, strict liability law: a referral can violate it even if no one intended to break the rules. The Anti-Kickback Statute is a criminal law that requires proof of knowing and willful conduct. The chart below compares the two.
OIG Advisory Opinions and Self-Disclosure
Before a Problem: Request an Advisory Opinion
If you are planning an arrangement and aren’t sure it complies, you can ask HHS-OIG for an advisory opinion under 42 C.F.R. Part 1008. OIG reviews the specific facts you submit and states whether it would impose sanctions. An opinion is binding only for the parties who request it, but OIG publishes its opinions, and they are a useful guide to how the agency views similar arrangements.
After Finding a Problem: Self-Disclosure
When a provider discovers a potential kickback in its own operations, self-disclosure can significantly reduce the consequences. OIG’s Health Care Fraud Self-Disclosure Protocol generally resolves civil and administrative liability for less than the government would seek in litigation. The minimum settlement is $100,000 for kickback-related disclosures and $20,000 for other matters.
On October 15, 2026, the Justice Department and HHS-OIG announced a new policy for potentially criminal conduct. A company now needs to disclose only to the Health Care Fraud Section of DOJ’s Fraud Division to receive the benefits of both DOJ’s Corporate Enforcement Policy and OIG’s Self-Disclosure Protocol.
Self-disclosure is a major decision with criminal, civil, and licensing consequences. Before disclosing, work with experienced defense counsel to investigate the facts, measure the exposure, and decide how and where to report. See also our healthcare audit services.
What Steps Can Healthcare Providers Take to Avoid Violating the Anti-Kickback Statute?
A strong compliance program is the best protection against kickback allegations. Providers should:
- Keep a database of every contract with a referral source and review it against the safe harbor requirements.
- Document fair market value for every payment to a physician, marketer, or other referral source.
- Avoid paying marketers or sales staff based on the number of referrals, tests, or orders, especially under EKRA.
- Log gifts, meals, and other benefits given to referral sources, and set clear limits.
- Train staff on kickback rules and give them a way to report concerns internally.
- Have counsel review new arrangements before they start, and audit existing ones regularly.
Our kickback compliance team can review your arrangements before regulators do.
Anti-Kickback Statute FAQs
Who does the Anti-Kickback Statute apply to?
The statute applies to anyone involved in federal healthcare programs, including physicians, hospitals, pharmacies, medical device companies, pharmaceutical manufacturers, laboratories, nursing homes, and other healthcare providers or suppliers. It also extends to individuals and entities that refer patients or arrange for services covered by federal healthcare programs.
What should I do if I find a possible kickback in my practice?
Stop the arrangement, preserve all related records, and speak with a healthcare fraud defense lawyer before taking any other step. Counsel can investigate, measure your exposure, and advise whether to self-disclose to HHS-OIG or the Department of Justice. Disclosing without a plan, or continuing the arrangement, can make your position worse.
What are the penalties for violating the Anti-Kickback Statute?
Violations can result in criminal fines of up to $100,000 per violation, up to 10 years in prison, civil monetary penalties for each kickback, and exclusion from federal healthcare programs. Claims tainted by a kickback can also lead to False Claims Act liability of three times the government’s losses, plus a penalty for each claim.
Can discounts be considered kickbacks?
Not necessarily. Discounts can be permissible under the Anti-Kickback Statute if they meet the discount safe harbor requirements. This generally means the discount must be properly disclosed and accurately reflected in costs claimed or charges made to federal healthcare programs.
The discount must also be given at the time of sale or in a fixed amount before the buyer submits claims.
Are free samples or meals for doctors considered kickbacks?
It depends on the circumstances and value. Pharmaceutical company representatives providing free drug samples that comply with FDA regulations and safe harbor provisions are generally permissible.
However, lavish meals, entertainment, or other valuable items given to induce prescriptions or referrals can violate the statute. Many healthcare organizations have strict policies limiting such gifts.
Recent Anti-Kickback Enforcement Examples
Federal enforcement of kickback schemes remains aggressive in 2026. Recent Justice Department actions include:
- 2026 National Health Care Fraud Takedown (June 2026): DOJ charged 455 defendants, including 90 doctors and other licensed medical professionals, in schemes involving more than $6.5 billion in alleged false claims. In one case, a company’s vice president of sales was charged in an alleged nationwide kickback scheme involving wound-care allografts, with marketers and providers allegedly receiving about 40% of the billed amount. Read the DOJ release.
- Veloxis Pharmaceuticals, $46 million+ (August 2026): The drug maker entered a deferred prosecution agreement on a charge of conspiracy to violate the Anti-Kickback Statute and agreed to pay more than $46 million to resolve criminal and civil allegations. DOJ alleged the company used lavish meals, alcohol, and luxury resort stays to induce prescriptions of a kidney transplant drug. Read the DOJ release.
- Dompé U.S., $32 million (September 2026): After self-disclosing, the drug maker agreed to pay $32 million to resolve allegations that it paid Medicare patients’ co-pays through two patient assistance foundations to induce purchases of its drug. Read the DOJ release.
- Laboratory executives, marketers, and a physician, $2 million+ (June 2026): A former lab CEO, a sales executive, six marketers and marketing companies, and a physician agreed to pay more than $2 million to settle False Claims Act allegations that doctors were paid for lab referrals. The payments were allegedly disguised as investment distributions from a management services organization (MSO). DOJ says it has recovered over $61 million since 2019 in similar MSO kickback cases, including from more than 50 physicians. Read the DOJ release.
Charges are allegations, and every defendant is presumed innocent unless proven guilty. Civil settlements are not admissions of liability unless stated.
United States v. R.M., et al., Anti-Kickback Case Defense
Our results in Anti-Kickback defense cases include United States v. R.M., et al., during which HHS-OIG investigated our client for Health Care Fraud and Aggravated Identity Theft based on the client’s alleged participation in a telemedicine kickback scheme that defrauded Medicare of approximately $30 million in reimbursements for unnecessary durable medical equipment and genetic testing.
After conducting our investigation and making several presentations to the investigating agents and prosecutors, we convinced the government not to prosecute our client.
Lowther | Walker – Anti-Kickback Defense Lawyers Serving Clients Nationwide
Lowther | Walker’s seasoned healthcare fraud defense lawyers have decades of experience defending healthcare providers facing Stark Law and Anti-Kickback Statute cases. Our criminal defense team defended our client in the largest healthcare fraud case the DOJ has ever prosecuted.
For proactive, skilled legal defense with proven experience in anti-kickback cases, request a free consultation with Lowther | Walker by calling (404) 806-7997 or booking your consultation online.
