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The evolution of the AKS to charge labs with health care fraud

The federal Anti-Kickback Statute (AKS) is a key piece of legislation used by the government to prosecute healthcare businesses and practitioners for fraud. The law is broad, and applies to services billed by physicians, nurses and even diagnostic labs.

How did the AKS expand to include labs?

Originally, lawmakers wrote the AKS to make the payment of kickbacks illegal. The definition of the term "kickbacks" led to some confusion. As a result, the government expanded the term kickbacks to include remuneration in 1982.

What does this mean and how did it impact diagnostic laboratories?

The impact of this law on labs used for medical testing came into play in 1985 in the precedent case, United States v. Greber. In that case, a cardiologist started a diagnostic lab business to provide services throughout the local medical community. The government accused the business of illegal kickbacks, but the physician owner countered the payments were not illegal. Instead, he stated the payments compensatory.

Ultimately, the court decided that although the payments were a form of payment to physicians, the payment was excessive. The court further reasoned the excessive nature of the lab intended the excessive payment to serve as a means to encourage future referrals. As a result, the court held excessive remuneration is illegal if that payment is made with the intention of encouraging future referrals.

What does this mean for labs today?

The impact of the AKS on diagnostic labs today has evolved. Because it is continually changing, it is wise for those who faced allegations of health care fraud violations under the AKS to seek legal counsel. An attorney experienced in the nuances of the AKS and how it applies to labs can review the allegations and provide guidance.

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