Federal Medicaid Kickback Charges for Doctors
The consulting fee from the laboratory seemed reasonable. The speaking engagement for the pharmaceutical company was above-board - they'd asked you to present at a medical conference, and the compensation was in line with what other physicians received. The lease arrangement for your office space was market rate, or close enough. You'd structured everything carefully. You'd even asked your practice administrator to review the contracts.
Then the federal agents showed up.
The Anti-Kickback Statute is the law most physicians have heard of but few actually understand. It turns routine healthcare business arrangements into federal felonies - and doctors often don't realize they've crossed the line until investigators are already building the case. The DOJ's 2025 National Health Care Fraud Takedown just charged 324 defendants in connection with $14.6 billion in intended losses. 96 of those defendants were licensed medical professionals - doctors, nurse practitioners, pharmacists. This is the largest healthcare fraud takedown in Department of Justice history.
Welcome to Spodek Law Group. We defend physicians facing federal Anti-Kickback Statute investigations and prosecutions. If you've received a subpoena, if HHS-OIG investigators have contacted you, or if you're concerned that an arrangement in your practice might expose you - this article explains exactly what you're facing and what options exist before it's too late.
The Line You Didn't Know You Crossed
The federal Anti-Kickback Statute - 42 U.S.C. § 1320a-7b - makes it a felony to knowingly and willfully pay or receive remuneration to induce referrals for services covered by Medicare, Medicaid, or other federal healthcare programs. Sounds straighforward enough. But the statute's reach is far broader then most physicians realize.
The critical concept: the one purpose test.
Federal courts have held that if ONE PURPOSE of the remuneration was to induce referrals, the arrangement violates the AKS. Not the primary purpose. Not the only purpose. If inducing referrals was among the purposes - even one purpose among many legitimate ones - you've potentialy violated federal law.
What does that mean in practice? Consider arrangements that seem completley routine in healthcare:
- Speaking fees from pharmaceutical companies - but the company tracks prescribing patterns of physicians they pay
- Consulting agreements with labs - but the compensation exceeds what non-referring physicians receive
- Office lease arrangements with imaging centers - but the rent is below market and the lessor receives your refferals
- Medical directorships with home health agencies - but the "director" duties are minimal compared to the pay
Every one of these arrangements has been the basis for federal prosecution.
Patrick Moore was a Georgia businessman who ran a genetic testing referral operation. The arrangement operated openly for years. Recruiters brought Medicare beneficiaries to physicians who ordered genetic tests. The tests went to labs that paid fees to the operation. From the outside, it looked like a legitimate business providing a healthcare service. In December 2025, Moore was sentenced to 46 months in federal prison and ordered to pay $7.2 million in restitution. The court found that payments flowed in exchange for refferals - and that was enough.
Safe harbors exist - 37 of them - designed to protect legitimate business arrangements from AKS liability. But heres the trap most physicians dont understand: to be protected, an arrangement must fit "squarely" within ALL requirements of a safe harbor. Not most requirements. All of them.
Common safe harbor requirements include: written agreement signed by parties, term of at least one year, compensation set in advance at fair market value, and compensation NOT determined by volume or value of referrals. Miss one element - the agreement wasnt signed, the term was only six months, the compensation was slightly above fair market value - and you have zero protection. There is no partial credit.
How Kickback Investigations Start
Where do these investigations actualy come from?
Most physicians imagine federal agents reviewing claims data in some government office. Thats not how it usualy works.
The primary driver of AKS enforcement is whistleblower qui tam lawsuits under the False Claims Act. Your billing manager. A former partner. A disgruntled employee. A competitor who heard rumors. Anyone with knowledge of your arrangements can file a sealed complaint with the federal government - and if the government intervenes and recovers money, the whistleblower collects 15-30% of whatever is recovered.
Thats not a theoretical risk. According to the American Bar Association, qui tam suits are the primary driver of healthcare fraud enforcement and recovery. Insiders know exactly were to point investigators.
The second pathway is OIG data analytics. HHS-OIG uses sophisticated algorithms to identify billing patterns that suggest kickback arrangements. Unusualy high referral rates to specific labs. Prescribing patterns that correlate with speaker fee payments. Lease arrangements that dont match market rates. The government has access to claims data from every Medicare and Medicaid patient you've ever treated.
The third pathway is routine audits that uncover compliance issues. A Medicare Administrative Contractor audit. A state Medicaid integrity review. Something flags - and suddenly what was a billing audit becomes a criminal referral.
Dr. Maria Batilo was a Falmouth-based physician in Massachusetts. In March 2025, she was indicted on 42 counts in connection with a kickback scheme involving a clinical laboratory. The allegations: she recieved payments in exchange for ordering urine drug tests and authorizing home health services. The scheme allegedly resulted in $7.8 million in false claims to MassHealth. The investigation started with a tip.
By the time you learn your under investigation, the government may have been building the case for months or years.
What Your Actually Facing
The Anti-Kickback Statute isn't a civil statute. It isn't a licensing issue. It's a federal criminal law. Violation is a felony.
Criminal penalties per violation:
- Up to 10 years in federal prison
- Up to $100,000 in fines
- Permanent criminal conviction on your record
But heres what makes this particulary devastating for physicians - criminal liability is just the beginning.
Each AKS violation also triggers civil liability under multiple statutes simultaneously. The same conduct that constitutes a criminal AKS violation automatically creates liability under the False Claims Act because it causes false claims to be submitted to federal healthcare programs.
Civil exposure per claim:
- False Claims Act: up to $27,894 per claim plus treble damages
- Civil Monetary Penalties Law: up to $50,000 per kickback plus three times the remuneration
- Each prescription, each referral, each claim filed constitutes a seperate violation
Think about what that means. One patient referred to a laboratory over 12 months might generate 50 separate claims. At $27,894 per claim plus treble damages, the exposure calculates into the millions - for one patient. The math gets catastrophic extremly fast.
And then theres the cascade of consequences that follows conviction:
Conviction triggers mandatory exclusion from Medicare, Medicaid, and all federal healthcare programs. That exclusion means you cannot treat Medicare patients. You cannot treat Medicaid patients. You cannot treat TRICARE patients. Given that Medicare alone covers 65+ million Americans, your patient base evaporates.
Exclusion leads to loss of hospital privileges. Hospitals can't employ or credential excluded providers. Your admitting privileges disappear.
Loss of privileges triggers state medical board investigation. The board will almost certainly take action based on the federal conviction.
And the final domino: license revocation. You cannot practice medicine - anywhere in the United States - without a valid medical license.
The 2025 National Healthcare Fraud Takedown numbers tell the story. 324 defendants charged across 50 federal districts. $14.6 billion in intended losses - more then doubling the prior record of $6 billion set in 2020. 96 licensed medical professionals among the defendants. The DOJ is not slowing down. There accelerating.
The Defense That Might Save Your Career
If your under investigation - or think you might be - timing matters enormously.
Pre-indictment intervention is critical. Once criminal charges are filed, your options narrow dramatically. Mandatory minimums may apply. Plea negotiations start from a much weaker position. Your facing a federal prosecution where conviction rates exceed 90%.
Before charges, there may be room for different outcomes. Civil resolution instead of criminal prosecution. Voluntary disclosure to OIG before the investigation becomes criminal. Negotiated settlements that preserve your license and your ability to practice.
The Fresno physicians got counsel early. They negotiated before indictment. The result: $2.4 million collective settlement to resolve allegations of kickback arrangements with mail-order pharmacies. Not pleasant - but not federal felony convictions either. Not prison time. Not exclusion. Not license revocation.
The "knowing and willful" element of the AKS does matter for defense. It doesn't mean you have to have known you were violating the law - courts have rejected that interpretation. But it does mean building the strongest possible case for why criminal prosecution is unwarranted.
Defense strategies that can work:
- Safe harbor compliance analysis - demonstrating that arrangements DID fit within safe harbor requirements, or that good faith efforts were made to comply
- Fair market value documentation - proving through independent valuation that compensation was not inflated to induce referrals
- Good faith reliance on counsel - showing that you sought and followed legal advice in structuring arrangements
- Voluntary disclosure - proactively disclosing potential violations to OIG before criminal investigation, potentially limiting exposure to civil remedies
Todd Spodek has handled Anti-Kickback Statute defense cases. He understands the critical difference between an OIG investigation where civil resolution may be possible and a DOJ prosecution where criminal defense is the priority. Early intervention - before the case is referred for criminal prosecution - can make the difference between a settlement and a prison sentence.
When Your Ready
If you're a physician facing an Anti-Kickback Statute investigation - or worried that arrangements in your practice might expose you - Spodek Law Group can help you understand exactly where you stand and what options exist.
The consultation is free. Theirs no obligation.
What you'll get is an honest assessment. Is this still at the OIG stage where civil resolution might be possible? Has it been referred to DOJ for criminal prosecution? What do the arrangements actually look like under safe harbor analysis? What are realistic outcomes - not best-case fantasies, but actual possibilities based on how these cases play out?
Call us at 212-300-5196. The government takes years to build these cases. Once they move, things happen fast. The earlier you have counsel, the more options remain on the table.
Dont wait until the indictment drops.
Were here when you need us.
