Kickbacks And How They Can Affect Your Medical License

What Is A Kickback?

Medical Defense

Healthcare providers in the state of Texas may not make any payments of any kind to encourage or to solicit referrals for medical services that are paid by federal healthcare programs including Medicare, Medicaid, and any other healthcare program paid for with federal funds. If healthcare providers make any payment or any type of compensation to anyone to encourage a patient to come to their offices or to encourage other medical providers to refer patients to their offices, the payment is a kickback, and making as well as receiving the payment are federal crimes.

That’s been the law since the federal Medicare and Medicaid Patient Protection Act of 1987 (commonly called the “Anti-Kickback Act”) went into effect. Certain healthcare companies that were providing medical services to Medicare patients had been paying healthcare providers to send patients to them, whether or not those patients actually needed medical treatment, diagnosis, or testing.

If you are a healthcare provider in the state of Texas, and if you are accused of paying – or receiving – a medical kickback, you must consult at once with an experienced Dallas medical license defense attorney who also has extensive criminal defense experience. More than your medical license is at risk. The fines are substantial, and in some cases, healthcare providers who have been convicted of paying or receiving medical kickbacks have been sentenced to serve years in federal prison.


Under federal law, a “kickback” is defined as any type of payment, either in cash or “in kind,” that is paid in return for patient referrals. Medicare and Medicaid kickbacks are fraud committed by persons who bribe doctors with the intent of illegally getting something back in exchange. Kickbacks are also used to facilitate other types of medical fraud and are frequently prosecuted along with violations of the federal False Claims Act.

To determine if a payment to a healthcare provider is a kickback, federal courts use the “One Purpose” test: if even “one purpose” of a payment is to facilitate patient referrals, the payment is deemed a kickback. Even if the payment was compensating a healthcare provider for a service rendered, if one purpose of the payment was to induce referrals, the payment is a kickback.

If a doctor or a facility director is in a position to refer business to the medical provider making the payment, the payment and the relationship may raise suspicion. With federal courts so broadly defining what a kickback is, the legal risk to doctors and other healthcare providers is rising.

Any kind of “perk” or remuneration might be considered a kickback, including meals, vacations, transportation, and lodging. Payments made above the market value of the services provided, or payments for services that were never delivered, may become the basis for a kickback prosecution. Attorney General Jeff Sessions is expected to expand the Justice Department’s investigations and prosecutions of alleged Medicare and Medicaid fraud in the months ahead.


Medical kickbacks are a threat to the professionalism and integrity of healthcare in the United States, because kickbacks pressure doctors to make medical decisions based on their own personal interests and needs instead of the needs and the best interests of their patients.

Medical kickbacks have defrauded the taxpayers of billions of dollars, and they represent a genuine threat to the health of patients, who may end up being sent to substandard facilities, prescribed improper medications, or even subjected to unwarranted surgeries and unnecessary treatments.

Medical kickbacks also tend to foster the medical negligence that potentially can place patients in harm’s way. Medicare and Medicaid recipients are especially vulnerable, and they have become the predictable targets of most medical kickback schemes. These are patients who may have no means or wherewithal to take legal action or otherwise assert their rights if they become the victims of medical malpractice.


The criminal penalties that may be handed down for a violation of the Medicare and Medicaid Patient Protection Act of 1987 can be quite harsh. Penalties are imposed on both the medical providers who pay the kickbacks as well as those who receive the kickbacks. A conviction can be punished with criminal penalties as well as administrative sanctions. The criminal penalties include a fine of as much as $50,000 – plus three times the kickback amount – and up to five years in federal prison.

Additionally, a criminal kickback conviction may also be used to establish a defendant’s liability under the federal False Claims Act. Claims submitted in violation of the Medicare and Medicaid Patient Protection Act automatically constitute false claims for purposes of the False Claims Act.

Healthcare providers may not offer any type of financial incentive to Medicare and Medicaid recipients in return for patronage. They may not, for example, waive a recipient’s copay in return for that recipient’s use of the provider’s services or facilities.

The Physician Self-Referral Law, also known as the Stark Law, prohibits – with a number of exceptions – a physician from referring Medicare patients to a healthcare entity in which the physician has a personal financial interest, including an ownership and/or an investment interest.

Failure to comply with the Stark Law can mean denial of payments, mandatory refunds, exclusion from participation in federal health care programs, and monetary penalties. If a doctor is excluded from participation in federal health care programs, Medicaid, Medicare, Tricare, and the Veterans Health Administration will not pay for services rendered or items prescribed.

As the structure of the healthcare business evolves over time with acquisitions, mergers, and new legislative oversight, it may be wise for healthcare professionals to have a medical defense attorney review your corporate and business relationships and procedures – and particularly the way reimbursements are handled – to ensure that there is no violation of the law. Your attorney should be someone who has years of experience working with healthcare providers and a comprehensive understanding of the laws that govern the healthcare industry.

Medical fraud and bribery are rampant and costly – some would say out of control – in the United States. In fact, since 2007, more than 2,900 people have been charged by the federal Medicare Fraud Strike Force with more than $8.9 billion of bogus billings and fraud. In one month alone – June 2016 – the U.S. Justice Department filed charges against more than three hundred suspects for more than $900 million in fraudulent claims, embezzlement, and other violations of the Medicare and Medicaid Patient Protection Act.

If you are a healthcare provider in Texas and you are charged with or being investigated for kickbacks, fraud, or any violation of the law, contact an experienced Dallas medical license defense attorney who also has extensive criminal defense experience. The hard-working and committed men and women who offer healthcare services in the state of Texas deserve the best possible defense when their honesty and practices come under suspicion.

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