Anti-Kickback Statute (AKS) Whistleblowers

The AKS is a criminal law with broad reach that prohibits the payment of “remuneration”
to induce or reward patient referrals or the generation of business.

“Remuneration” is defined expansively to include:

• Cash payments
• Gifts or entertainment
• Free or discounted rent or office space
• Sham consulting agreements or inflated speaking fees
• Improper discounts, rebates, or incentives

Even if an action has multiple purposes, if one purpose is to induce referrals,
the arrangement may be unlawful.

AKS violations often appear disguised as legitimate business arrangements. Some common schemes include:

• Pharmaceutical and device manufacturer payments: rewarding doctors for prescribing specific drugs or devices;
• Sham consulting or speaking engagements: paying healthcare providers for little or no work as a means of rewarding them for referrals;
• Improper discount or rebate programs: using financial arrangements to conceal illegal incentives;
• Free staff, services, or office space: providing benefits in exchange for referrals;
• Hospital–physician referral deals: contracts structured to funnel patients improperly.

Whistleblowers who report AKS violations may bring claims under the FCA, and may receive:

• 15% to 30% of the government’s recovery as a whistleblower reward;
• Protection against retaliation, including reinstatement, double back pay, and special damages; and
• Confidentiality during the government’s initial investigation.

To allow for legitimate business practices, the AKS provides limited safe harbors for:

• Fair market value employment arrangements
• Bona fide service contracts
• Group purchasing agreements
• Certain investment interests

These exceptions are narrow, and many arrangements fall outside safe harbors,
exposing participants to liability.

The Department of Justice (“DOJ”) and Office of Inspector General (“OIG”) continue to aggressively pursue AKS violations.

Enforcement trends show:

• Pharmaceutical companies paying billions to resolve AKS-related allegations;
• Court rulings affirming that even indirect or disguised payments may constitute unlawful kickbacks; and
• Whistleblowers driving enforcement, providing the evidence that leads to government action.

Miller Shah LLP has represented whistleblowers in significant AKS enforcement actions, including, among others:

Novartis Pharmaceutical Corporation – $642 million settlement

In 2020, Novartis paid $642M to settle FCA and AKS claims over sham speaker fees and using charities to cover Medicare copays for its drugs.

Teva Pharmaceuticals – $54 million settlement

A $54 million resolution was obtained in an FCA case involving AKS violations, one of the largest recoveries tied to kickback allegations in the Philadelphia region.

Miller Shah LLP’s representation of whistleblowers includes:

• Evaluating potential AKS violations and determining if they create FCA liability;
• Filing qui tam complaints under seal in federal court;
• Coordinating with the DOJ and other government agencies during investigations;
• Pursuing the maximum financial award available;
• Protecting whistleblowers from retaliation;

Individuals with knowledge of illegal kickbacks in the healthcare industry may have grounds to bring an FCA case. These matters can result in substantial government recoveries along with significant rewards and protections for whistleblowers.

Miller Shah LLP is a nationally recognized whistleblower law firm with a proven record in AKS litigation. Contact the firm today for a confidential consultation with an attorney.