How Do State Anti-Kickback Laws Restrict Physicians?

How Do State Anti-Kickback Laws Restrict Physicians?

In today’s video, we’ll show you how pervasive anti-kickback laws are and when healthcare ventures and clinical practitioners need to worry about them.

Hi, I’m Michael H. Cohen, founding attorney of Cohen Healthcare Law Group. We help healthcare industry clients just like you, navigate the tricky legal and regulatory terrain so you can launch, grow, or scale your healthcare venture.

Recently, one of our physician clients said: “I don’t have a kickback issue, because I’m not using DHS, Designated Health Services.”  This response confuses anti-kickback law with the self-referral law, which on the federal side is known as “Stark.”

Self-referral and kickbacks are similar, in that both roughly involve referring a patient to an entity in which the physician has a financial interest.  The policy ideal is that medical doctors should refer patients for healthcare services they need, and not only to make a buck.  Prohibitions against self-referral, though, typically do only involve so-called “designated health services,” like labs or outpatient prescription drugs.  Kickbacks involve lots of other services, and sometimes even products.

Most physicians only worry about Medicare-related anti-kickback rules (or the federal AKS), but State law rules can also kick in, so to speak.

You might be surprised, for example, at how pervasive these rules can be in the law.  For example, consider this from New York’s Mental Hygiene Law, Section 32.06: “Prohibited practices by providers of substance use disorder services.”

The statute goes something like this: Subsection 2 – “No provider shall intentionally solicit, receive, accept or agree to receive or accept any payment, benefit or other consideration in any form to the extent such payment, benefit or other consideration is given for the referral of a person as a potential patient for substance use disorder services.”

And subsection 3 – “No provider providing or purporting to provide substance use disorder services pursuant to this chapter, shall intentionally make, offer, give, or agree to make, offer, or give any payment, benefit or other consideration in any form to the extent such payment, benefit or other consideration is given for the referral of a person as a potential patient for substance use disorder.”

Here you have a State law specifically addressed to substance abuse disorder services.  And on the federal side, in addition to the anti-kickback statute (or AKS), you also have EKRA, the Eliminating Kickbacks in Recovery Act, which adds anti-kickback provisions targeted at patient brokering associated with substance abuse and recovery services.  This includes referrals of patients to a recovery home, clinical treatment, facility, or laboratory.

Thanks for watching. Contact us with your questions. We helped lots of industry clients build their dream.  We look forward to working with you on the journey to your healthcare venture success!

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