The Anti-Kickback Statute and the Stark Law are not two versions of the same rule. They are different statutes, with different natures, reaching different people, and they are conflated on a very large share of the pages that mention them — including pages written by lawyers.
The Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), is a CRIMINAL statute. It is INTENT-BASED. It reaches ANYONE, and ANY remuneration, in connection with ANY federal health care program.
The Stark Law, 42 U.S.C. § 1395nn, is CIVIL. Its prohibition contains NO INTENT ELEMENT. It reaches ONLY PHYSICIANS making referrals for DESIGNATED HEALTH SERVICES.
And the difference that matters most in practice is one of drafting: failing to fit an AKS safe harbor is not, by itself, unlawful. Failing to fit a Stark exception IS a violation.
The two statutes, side by side
| Anti-Kickback Statute | Stark Law | |
|---|---|---|
| Citation | 42 U.S.C. § 1320a-7b(b) | 42 U.S.C. § 1395nn |
| Nature | Criminal — a felony | Civil — no criminal penalty |
| Mental state | “Knowingly and willfully” | None in the prohibition itself |
| Who can violate it | Anyone — the statute says “Whoever” | A physician (or an immediate family member) making the referral, and the entity that bills |
| Conduct reached | Soliciting, receiving, offering or paying any remuneration | Making a referral for a designated health service, and billing for it |
| “Remuneration” | “any kickback, bribe, or rebate … directly or indirectly, overtly or covertly, in cash or in kind” | Not a remuneration statute — it turns on the existence of a financial relationship |
| Program scope | Any Federal health care program | Medicare designated health services |
| Penalty | Felony: $100,000 fine, 10 years, or both | Payment denial; mandatory refund; CMP up to $15,000 per service; up to $100,000 per circumvention scheme |
| Relief mechanism | Safe harbors — 42 C.F.R. § 1001.952 | Exceptions — 42 C.F.R. §§ 411.355–411.357 |
| Effect of not fitting | Not itself unlawful. The regulation lists practices that “shall not be treated as a criminal offense”; it does not make everything else one | A violation. The prohibition applies “[e]xcept as provided in this subpart” — outside an exception, the referral is barred |
| FCA consequence | § 1320a-7b(g): a claim resulting from a violation “constitutes a false or fraudulent claim” | Payment denial and refund; FCA exposure arises through the false-claim analysis, not by an express statutory bridge |
Table: the Anti-Kickback Statute and the Stark Law compared. Every entry is drawn from the statutory or regulatory text cited, not from a characterisation of it.
The Anti-Kickback Statute
What it prohibits
Section 1320a-7b(b) has two symmetrical halves.
(b)(1) — receiving. “Whoever knowingly and willfully solicits or receives any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind —
(A) in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program, or (B) in return for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under a Federal health care program, shall be guilty of a felony and upon conviction thereof, shall be fined not more than $100,000 or imprisoned for not more than 10 years, or both.”
(b)(2) — paying. The same prohibition, applied to whoever “knowingly and willfully offers or pays any remuneration … to any person to induce such person” to refer or to purchase, lease or order.
Four features of that text do the work.
“Whoever.” Not physicians, not providers — anyone. Marketers, sales representatives, laboratory owners, device manufacturers, management companies, staffing agencies, and the people who run them.
“Any remuneration.” The parenthetical (“kickback, bribe, or rebate”) is illustrative, not limiting, and the qualifiers are exhaustive: “directly or indirectly, overtly or covertly, in cash or in kind.” Free rent below market, consulting fees, speaker fees, medical directorships, equipment loans, waived co-payments, staffing provided at no charge, and the value of business opportunities have all been treated as remuneration.
“In return for” and “to induce.” The link between the payment and the referral is the element, and it is where the case is fought.
“Any Federal health care program.” Not just Medicare. Medicaid, TRICARE, the VA, the federal employee program and others.
The intent standard, and what § 1320a-7b(h) does to it
The AKS requires that the defendant act “knowingly and willfully.” But subsection (h) narrows what that means: “With respect to violations of this section, a person need not have actual knowledge of this section or specific intent to commit a violation of this section.”
So the government need not prove that the defendant knew the Anti-Kickback Statute existed, or that they specifically intended to violate it. What remains is that the payment was made or received knowingly and willfully, and with the prohibited purpose.
That is a meaningful mental state — it excludes accident, mistake and genuine arm’s-length commercial dealing — but it is a good deal less than the “I did not know this was illegal” defense that practitioners often assume they have.
Greber and the “one purpose” test
The single most consequential judicial gloss on the AKS is the “one purpose” rule, and its source is United States v. Greber, 760 F.2d 68 (3d Cir. 1985).
The defendant argued that his payments to referring physicians were compensation for services those physicians actually performed. The Third Circuit rejected the argument: “we … hold that if one purpose of the payment was to induce future referrals, the medicare statute has been violated.”
The court grounded that in the statutory text. “The text refers to ‘any remuneration.’ That includes not only sums for which no actual service was performed but also those amounts for which some professional time was expended.”
The practical consequence is severe and it is what makes AKS compliance hard. A payment that is mostly legitimate is not saved by being mostly legitimate. A medical directorship that is genuinely performed, at a defensible rate, is still an AKS violation if one purpose of establishing it was to secure the director’s referrals. That is why documentation of the reason an arrangement exists — the business need, the selection process, the absence of any referral-volume consideration — matters as much as documentation of fair market value.
A citation caution. Greber carries a negative treatment flag, and the reason is not the “one purpose” holding. It is the opinion’s separate holding on 18 U.S.C. § 1001, that materiality is “a question of law to be decided by the trial judge rather than the jury.” That holding was superseded by United States v. Gaudin, 515 U.S. 506 (1995), which held that “[t]he trial judge’s refusal to allow the jury to pass on the ‘materiality’ of Gaudin’s false statements infringed that right.” Anyone citing Greber should cite it for the AKS proposition and be aware of what else is in the opinion.
Safe harbors: what they do, and what they do not
42 C.F.R. § 1001.952 sets out the safe harbors, and the operative sentence is the introductory one:
“The following payment practices shall not be treated as a criminal offense under section 1128B of the Act and shall not serve as the basis for an exclusion.”
Read it carefully. It confers protection on the listed practices. It says nothing at all about practices outside the list.
That is the asymmetry, and it is the single most important practical point on this page. An arrangement that fits a safe harbor, meeting every applicable standard, is protected absolutely. An arrangement that does not fit is not thereby unlawful — it is simply unprotected, and falls to be assessed under the statute on its own facts, with intent as the question.
Two corollaries follow.
Safe harbors are all-or-nothing. The regulation requires that “all of the applicable standards” be met within a category. Substantial compliance is not compliance, and a technical failure — a missing signature, an agreement of eleven months rather than a year, an aggregate schedule not set out in advance — takes the arrangement outside the protection entirely.
Being outside a safe harbor is a risk assessment, not a verdict. Many entirely legitimate arrangements do not fit any safe harbor, because the safe harbors were drafted narrowly and commerce is varied. The correct response to “this doesn’t fit a safe harbor” is to document why the arrangement exists, why the compensation is fair market value, and why it does not vary with referral volume — not to abandon the arrangement or to assume it is criminal.
The safe harbors cover, among other things, investment interests, space and equipment rental, personal services and management contracts, employees, group purchasing organizations, discounts, referral services, warranties, and a set of value-based arrangements added in the 2020 rulemaking to accommodate coordinated-care models. The regulation has been amended repeatedly — the version current as of this writing took effect 1 October 2025 — so the text must be checked rather than recalled.
On this page
The Stark Law
What it prohibits
Section 1395nn(a)(1) states the prohibition in two parts:
“Except as provided in subsection (b), if a physician (or an immediate family member of such physician) has a financial relationship with an entity specified in paragraph (2), then — (A) the physician may not make a referral to the entity for the furnishing of designated health services for which payment otherwise may be made under this subchapter, and (B) the entity may not present or cause to be presented a claim … or bill to any individual, third party payor, or other entity for designated health services furnished pursuant to a referral prohibited under subparagraph (A).”
Note what is absent: any requirement of intent, agreement, inducement or purpose. If the financial relationship exists and no exception applies, the referral is prohibited and the claim may not be billed. That is what “strict liability” means in this context — the prohibition operates on the existence of the relationship, not on anyone’s state of mind.
Financial relationship
Section 1395nn(a)(2) defines it as either “an ownership or investment interest in the entity” or “a compensation arrangement … between the physician (or an immediate family member of such physician) and the entity.” An ownership interest “may be through equity, debt, or other means and includes an interest in an entity that holds an ownership or investment interest in any entity providing the designated health service” — so indirect ownership counts.
Designated health services
Section 1395nn(h)(6) lists them, and the list is closed:
- Clinical laboratory services
- Physical therapy services
- Occupational therapy services
- Radiology services, “including magnetic resonance imaging, computerized axial tomography scans, and ultrasound services”
- Radiation therapy services and supplies
- Durable medical equipment and supplies
- Parenteral and enteral nutrients, equipment, and supplies
- Prosthetics, orthotics, and prosthetic devices and supplies
- Home health services
- Outpatient prescription drugs
- Inpatient and outpatient hospital services
- Outpatient speech-language pathology services
If the service is not on that list, Stark does not apply. That is a genuine threshold defense and it is checked less often than it should be.
Referral
Section 1395nn(h)(5) defines it functionally: for Part B items and services, “the request by a physician for the item or service, including the request by a physician for a consultation with another physician (and any test or procedure ordered by, or to be performed by (or under the supervision of) that other physician)”; and otherwise, “[t]he request or establishment of a plan of care by a physician which includes the provision of the designated health service.”
The consequences
Section 1395nn(g) sets them out:
- Denial of payment. “No payment may be made under this subchapter for a designated health service which is provided in violation of subsection (a)(1).”
- Mandatory refund. “If a person collects any amounts that were billed in violation of subsection (a)(1), the person shall be liable to the individual for, and shall refund on a timely basis to the individual, any amounts so collected.”
- Civil money penalty for improper claims. Up to $15,000 for each such service where a person “knows or should know” the claim is for a service for which payment may not be made or for which a refund has not been made.
- Circumvention schemes. Up to $100,000 for each arrangement or scheme “(such as a cross-referral arrangement) which the physician or entity knows or should know has a principal purpose of assuring referrals by the physician to a particular entity which, if the physician directly made referrals to such entity, would be in violation of this section.”
Note where intent re-enters: the prohibition has none, but the civil money penalties require that the person “knows or should know.” So a wholly innocent Stark violation produces payment denial and a refund obligation, but not a penalty. That distinction is worth preserving in any negotiation, because the difference between a refund obligation and a penalty is also the difference between a compliance problem and an enforcement matter — and where the claims were submitted electronically, the same conduct supports wire fraud counts.
Exceptions are mandatory, not optional
The regulatory prohibition, 42 C.F.R. § 411.353(a), reads: “Except as provided in this subpart, a physician who has a direct or indirect financial relationship with an entity, or who has an immediate family member who has a direct or indirect financial relationship with the entity, may not make a referral to that entity for the furnishing of DHS for which payment otherwise may be made under Medicare.”
Compare that with the AKS safe-harbor formulation quoted above. The Stark regulation states a prohibition and carves exceptions out of it. The AKS regulation states protections and says nothing about what lies outside them. That is the asymmetry, and it comes from the drafting, not from a policy gloss.
The exceptions live at 42 C.F.R. §§ 411.355 (exceptions applicable to both ownership and compensation), 411.356 (ownership or investment interests) and 411.357 (compensation arrangements), and like the safe harbors they must be met in full.
Three provisions that soften the edges
The regulation contains relief that is frequently overlooked.
The entity’s lack of knowledge. Under § 411.353(e), payment may be made where “[t]he entity did not have actual knowledge of, and did not act in reckless disregard or deliberate ignorance of, the identity of the physician who made the referral,” and the claim otherwise complies with law.
Temporary non-compliance. Under § 411.353(f), an entity may bill notwithstanding non-compliance where the relationship “fully complied with an applicable exception under § 411.355, 411.356, or 411.357 for at least 180 consecutive calendar days immediately preceding” the failure, the failure was “for reasons beyond the control of the entity,” and the entity “promptly takes steps to rectify” it — for a period “which must not exceed 90 consecutive calendar days.”
Reconciliation of payment discrepancies. Under § 411.353(h), an entity may bill where, “[n]o later than 90 consecutive calendar days following the expiration or termination of a compensation arrangement,” the parties “reconcile all discrepancies in payments under the arrangement” so that the full amount owed has been paid as the arrangement required, and the arrangement otherwise fully complies with an exception.
Those three provisions are the reason a technical Stark problem is often fixable, and why the timing of discovery matters so much.
The same facts, under both statutes
The clearest way to see the difference is to run one arrangement through both analyses.
The facts. A hospital pays a cardiologist $8,000 a month as medical director of its cardiac catheterisation service. The cardiologist refers patients to the hospital for catheterisation. There is a written agreement. The duties are real and are performed. The rate was not benchmarked against anything.
Under Stark. The hospital furnishes designated health services — inpatient and outpatient hospital services are item (11) on the § 1395nn(h)(6) list. A compensation arrangement exists. The cardiologist refers for those services. The prohibition in § 1395nn(a)(1) therefore applies unless an exception is met. The relevant exception (personal service arrangements) requires, among other things, that the compensation be set in advance, not exceed fair market value, and not be determined in a manner that takes into account the volume or value of referrals. Because the rate was never benchmarked, fair market value cannot be demonstrated — so the exception is not met, and the referrals are prohibited and the claims not billable. No intent inquiry occurs at any point. Payment denial and a refund obligation follow; a civil money penalty follows only if the hospital “knows or should know.”
Under the AKS. The same facts produce a different question: was one purpose of the $8,000 to induce referrals? Failing to fit the personal-services safe harbor does not answer it — the safe harbor confers protection, not a verdict. The analysis is factual: why was the directorship created, how was the director selected, did anyone discuss referrals, does the compensation vary with them, is the rate defensible against market data obtained afterwards, and were the duties actually performed and documented? If the honest answer is that the arrangement existed to reward a referrer, Greber makes it a felony even though the work was done. If it existed because the service needed a director and this cardiologist was the right one, an unbenchmarked rate is a compliance failure and an evidentiary problem — not necessarily a crime.
And under the FCA. If the AKS was violated, § 1320a-7b(g) makes every claim “resulting from” the violation a false claim, with treble damages and per-claim penalties. If only Stark was violated, the exposure runs through payment denial, refund and the false-claim analysis rather than through that express statutory bridge.
The lesson. Stark is answered by documents. The AKS is answered by evidence about why. The two require different files, assembled at different times, and a compliance program that only produces the first will not answer the second.
The arrangements that actually get investigated
Six recur, and knowing which is at issue tells you which analysis to run first.
Medical directorships and administrative roles. The most common. The questions are whether the role was needed, whether the duties were performed and recorded contemporaneously, whether the rate reflects fair market value for the hours actually worked, and whether the number of directorships a facility has bears any relation to the number of directors it needs.
Space and equipment leases. Below-market rent from a facility to a referring physician — or above-market rent paid to one — is remuneration. So is charging for less space than is used, or failing to charge for use at all. Both statutes have provisions addressing leases, and both require a written, signed agreement of at least a year, at fair market value, with the rate set in advance and not varying with referrals.
Marketing, consulting and speaker arrangements. Payments to physicians for speaking, advisory boards or consulting. The recurring problem is that the compensation is per-engagement, the engagements are unlimited, the audience is small, and the attendees are themselves referral sources.
Laboratory, imaging and DME arrangements. Process-and-handling fees, in-office phlebotomy support, free supplies, and staff provided at no charge to a referring practice. These are the classic “in kind” cases, and they are prosecuted heavily.
Physician-owned entities. Distributorships, surgical hospitals, imaging centers, and ancillary service lines in which referring physicians hold equity. Both the AKS investment-interest safe harbor and the Stark ownership exceptions are narrow, and returns that track a physician-owner’s own referrals are the recurring problem. Where the entity raised outside capital on projected referral volumes, the same facts can generate securities fraud and investment fraud exposure, and where distributions were not reported, tax counts.
Waiver of patient obligations. Routine waiver of co-payments and deductibles is remuneration to the patient, and it also has its own civil money penalty regime under 42 U.S.C. § 1320a-7a for inducements to beneficiaries. Where the waived amounts were nonetheless billed as collected, the claims themselves become the Medicare billing case.
Self-disclosure
Both agencies operate self-disclosure processes, and they lead to different places.
CMS’s Self-Referral Disclosure Protocol handles actual or potential Stark violations. Because Stark violations produce an overpayment, disclosing engages the 42 U.S.C. § 1320a-7k(d) reporting-and-return obligation, and the protocol is the route by which a Stark overpayment is resolved with CMS rather than simply refunded.
HHS-OIG’s Self-Disclosure Protocol handles conduct that may violate the AKS or that involves other fraud, and it is the route to a settlement that resolves OIG’s civil monetary penalty and exclusion authority.
The choice between them matters, and so does the decision whether to disclose at all. Disclosure is an admission of the conduct disclosed. It engages the 60-day clock. And — this is the point most often missed — a resolution with a civil agency does not resolve criminal exposure. The Anti-Kickback Statute is a felony, and settling with CMS or OIG does not bind the Department of Justice. That is why a disclosure decision in a kickback matter needs criminal-defense input before the decision is made, not after.
What disclosure can buy is real: reduced multipliers, resolution without exclusion, and the credit that comes from having come forward. What it costs is certainty about liability for the conduct disclosed. Both sides of that need to be assessed on the specific file.
Where the two statutes meet the False Claims Act
The bridge is statutory and it is one sentence. Section 1320a-7b(g) provides:
“In addition to the penalties provided for in this section or section 1320a–7a of this title, a claim that includes items or services resulting from a violation of this section constitutes a false or fraudulent claim for purposes of subchapter III of chapter 37 of title 31.”
That converts an AKS violation into False Claims Act liability on every downstream claim, with treble damages and a per-claim penalty currently running from $14,308 to $28,619 for penalties assessed after 3 July 2025 (28 C.F.R. § 85.5; the figures are adjusted for inflation annually, so confirm the current range).
It is why a single arrangement — one medical directorship, one marketing agreement — can produce liability measured against years of otherwise ordinary billing. The FCA analysis, including Escobar materiality and the SuperValu scienter standard, is on our false claims act attorney page.
Where these cases are actually defended
The intent question, under the AKS. Greber means an arrangement is not saved by being partly legitimate. It also means the government must prove that one purpose was inducement — which is a factual proposition about why the arrangement was created. Contemporaneous evidence of a genuine business need, of a selection process that did not turn on referral volume, of a fair-market-value analysis obtained before the arrangement started, and of compensation that did not vary with referrals, is what answers it.
Fair market value and commercial reasonableness. These are the twin pillars of nearly every compensation-arrangement defense. Both are supportable by valuation evidence, and both are far more persuasive when the analysis was done at the time rather than reconstructed afterwards.
Whether the service is a designated health service. A closed statutory list, and a genuine threshold question under Stark.
Whether a financial relationship exists at all. Indirect relationships, family members, and interests held through intermediate entities are where this is contested.
Whether an exception or safe harbor applies — and, where it does not, whether the arrangement is nonetheless lawful under the AKS on its facts. Those are different questions and should not be run together.
The § 411.353 relief provisions. Lack of knowledge, temporary non-compliance, and the 90-day reconciliation window.
Advisory opinions. HHS-OIG issues advisory opinions on specific arrangements. They bind the agency only as to the requesting party, but a favorable opinion on a materially identical arrangement is meaningful evidence on intent.
The company-counsel problem. In nearly every one of these investigations the entity retains counsel and interviews the individuals. Company counsel does not represent the physician or the manager being interviewed, and the memorandum of that interview belongs to the entity. Anyone asked to sit for one should have independent counsel first — the same warning that appears on our embezzlement page, for the same reason.
Our healthcare fraud attorney hub sets out the three-track framework — criminal, civil and administrative — within which these cases resolve, and the billing-side theories are on our medicare fraud attorney page. Where a conviction has been entered, review runs through federal appeals and, for claims outside the record, a § 2255 motion. Sentencing is addressed in our federal sentencing pages, and the wider federal fraud framework on the white collar crime lawyer hub. Elizabeth Franklin-Best, P.C. is a federal criminal defense attorney practice representing providers and health care businesses nationwide.
Frequently Asked Questions About Anti-Kickback and Stark Law
What is the difference between the Anti-Kickback Statute and the Stark Law?
The AKS (42 U.S.C. § 1320a-7b(b)) is criminal and intent-based. It reaches anyone — “Whoever” — who “knowingly and willfully” solicits, receives, offers or pays “any remuneration … directly or indirectly, overtly or covertly, in cash or in kind” to induce referrals or purchases payable by any federal health care program. Ten years and a $100,000 fine. Stark (42 U.S.C. § 1395nn) is civil, its prohibition has no intent element, and it reaches only physicians referring for designated health services and the entities that bill them. Its consequences are payment denial, mandatory refund and civil money penalties.
Is the Stark Law really strict liability?
The prohibition in § 1395nn(a)(1) contains no intent element: if a financial relationship exists and no exception applies, the referral is barred and the claim may not be billed, regardless of anyone’s state of mind. Intent re-enters only at the penalty stage — the civil money penalties under § 1395nn(g)(3) and (4) require that the person “knows or should know.” So an innocent violation still produces payment denial and a refund obligation, but not a penalty.
If my arrangement doesn’t fit a safe harbor, is it illegal?
No. That is the most common and most costly misunderstanding in this area. 42 C.F.R. § 1001.952 provides that “[t]he following payment practices shall not be treated as a criminal offense … and shall not serve as the basis for an exclusion.” It confers protection on what is listed; it says nothing about what is not. An arrangement outside a safe harbor is unprotected, not unlawful, and falls to be assessed on its facts with intent as the question.
What counts as “remuneration”?
Almost anything of value. The statute reaches “any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind.” The parenthetical is illustrative rather than limiting, and the qualifiers close the obvious routes around it. Below-market rent, rent-free space, equipment provided at no cost, staff seconded without charge, waived fees, free supplies, consulting and speaker payments, medical directorships, and the value of a business opportunity have all been treated as remuneration. The safer working assumption is that anything of value moving toward a source of referrals requires analysis rather than a judgment that it is too small to matter.
Is it different for Stark exceptions?
Yes, and this is the asymmetry. The Stark regulation, 42 C.F.R. § 411.353(a), prohibits the referral “[e]xcept as provided in this subpart.” Outside an exception, the referral is prohibited and the claim may not be billed. Safe harbors are optional protection; Stark exceptions are mandatory compliance.
What is the “one purpose” test?
From United States v. Greber, 760 F.2d 68, 69 (3d Cir. 1985): “if one purpose of the payment was to induce future referrals, the medicare statute has been violated.” The court reasoned that “any remuneration” includes “not only sums for which no actual service was performed but also those amounts for which some professional time was expended.” An arrangement is not saved by being partly — or even mostly — legitimate.
Do I have to know the Anti-Kickback Statute exists to violate it?
No. Section 1320a-7b(h) provides that “a person need not have actual knowledge of this section or specific intent to commit a violation of this section.” The government must still prove the conduct was knowing and willful and had the prohibited purpose, but not that you knew the statute existed.
Can the same arrangement violate both statutes?
Frequently, and they are assessed separately. Stark asks a documentary question — does a financial relationship exist, is a designated health service referred, does an exception apply — with no intent inquiry. The AKS asks a factual one: was one purpose of the payment to induce referrals. An arrangement can fail Stark for a technical reason (an unsigned agreement, an unbenchmarked rate) while raising no realistic AKS issue at all, and it can satisfy every Stark exception while still violating the AKS if the reason it exists was to reward a referrer. The two need separate analyses and separate files. Both sit inside the wider billing picture set out on our Medicare fraud defense page.
Does the Anti-Kickback Statute only apply to physicians?
No — this is a common error. The statute says “Whoever.” It reaches marketers, sales representatives, laboratory and imaging-center owners, device and pharmaceutical companies, management and billing companies, staffing agencies, and anyone else on either side of a payment connected to federally reimbursable referrals or purchases. Stark, by contrast, does reach only physicians (and their immediate family members) and the billing entity.
Is free rent, or a free employee, “remuneration”?
It can be. The statute reaches “any remuneration … directly or indirectly, overtly or covertly, in cash or in kind.” Below-market rent, equipment provided at no cost, staff seconded without charge, waived fees, and business opportunities have all been treated as remuneration. Anything of value transferred to a source of referrals should be analyzed rather than assumed to be immaterial. Where the payment moved through accounts, money laundering counts follow the AKS count, and the claims themselves supply wire fraud counts.
How does a kickback become a False Claims Act case?
By statute. Section 1320a-7b(g) provides that “a claim that includes items or services resulting from a violation of this section constitutes a false or fraudulent claim” under the FCA. Every downstream claim tainted by the arrangement becomes an FCA claim — the mechanics of which are on our False Claims Act and qui tam defense page — with treble damages and a per-claim penalty — currently $14,308 to $28,619 for penalties assessed after 3 July 2025 under 28 C.F.R. § 85.5, and adjusted for inflation annually.
We discovered a Stark problem. Is there any way to fix it?
Sometimes, and the regulation says so. 42 C.F.R. § 411.353 contains three relief provisions: payment may be made where the entity “did not have actual knowledge of, and did not act in reckless disregard or deliberate ignorance of, the identity of the physician who made the referral”; there is a temporary non-compliance provision where the arrangement complied for at least 180 consecutive days, the failure was beyond the entity’s control, and it is rectified within 90 consecutive calendar days; and there is a 90-day reconciliation window after a compensation arrangement expires or terminates to true up payment discrepancies. Timing is everything, which is why discovery of a problem should trigger advice immediately.
Which services does Stark actually cover?
A closed statutory list of twelve, at 42 U.S.C. § 1395nn(h)(6): clinical laboratory services; physical therapy; occupational therapy; radiology “including magnetic resonance imaging, computerized axial tomography scans, and ultrasound services”; radiation therapy services and supplies; durable medical equipment and supplies; parenteral and enteral nutrients, equipment and supplies; prosthetics, orthotics and prosthetic devices and supplies; home health services; outpatient prescription drugs; inpatient and outpatient hospital services; and outpatient speech-language pathology services. If the service is not on that list, Stark does not apply — which is a genuine threshold defense, and one checked less often than it should be. The AKS has no equivalent limit.
Should we self-disclose?
It depends on what would be disclosed and to whom. CMS’s Self-Referral Disclosure Protocol handles Stark matters; HHS-OIG’s Self-Disclosure Protocol handles AKS and other fraud matters and can resolve civil monetary penalty and exclusion exposure. Disclosure can buy reduced multipliers, resolution without exclusion, and cooperation credit. It also fixes an admission of the conduct disclosed and engages the 60-day overpayment clock. And critically, a resolution with a civil agency does not resolve criminal exposure — the AKS is a felony, and settling with CMS or OIG does not bind the Department of Justice. That assessment belongs with criminal-defense counsel before the decision, not after. The same trap in the securities context is described on our SEC investigation defense page, where the Commission’s own rule says a settlement does not extend to criminal charges.
What is an OIG advisory opinion worth?
It binds the agency only as to the party who requested it and only on the facts presented. But a favorable published opinion on an arrangement materially identical to yours is meaningful evidence that the arrangement was entered into in good faith — which, under a statute whose central element is purpose, is worth having. Building that record is federal criminal defense work as much as compliance work, because purpose is what a jury will be asked about.
By Elizabeth Franklin-Best, Esq. — Principal Attorney & Founder, Elizabeth Franklin-Best, P.C.
Kickback or Stark Law Exposure?
Referral and compensation arrangements can be lawful or indefensible on facts that look similar from the outside. The distinction is technical and worth getting right before anyone self-discloses.
Representation begins with a paid, one-hour consultation — a working session in which we review where matters stand and tell you honestly what options remain. We do not promise outcomes.
Reviewed for legal accuracy by Elizabeth Franklin-Best, Esq., Principal Attorney·September 2026