Document Type

Article

Disciplines

Health Law and Policy

Abstract

Private health insurance is the predominant source of health insurance coverage in the United States. Yet, the primary criminal anti-kickback law in the United States, the Anti-Kickback Statute, applies only to certain government-funded health insurance payers. This Article argues that the Anti-Kickback Statute should be expanded to protect all health insurance payers, including private ones. First, the harms that kickbacks cause— overutilization and fraud, patient harm, and an undermining of a competitive health care market—extend to private payers and their beneficiaries and any harms unique to government payers can be addressed through sentencing enhancements. Second, Congress has previously justified excluding private payers from the protections of the Anti-Kickback Statute on the grounds that as managed care entities, they are immune to kickback harms. That rationale, however, does not fare well against the facts: many private payers use fee-for-service models, many government payers use managed care models, and kickbacks can cause harm even under a managed care model. Further, concerns with the Anti-Kickback Statute’s interaction with managed care can be addressed through safe harbors. Third, excluding private payers from the Anti-Kickback Statute’s protections hampers prosecutors’ ability to address health care fraud because it results in fraud shifting, creates unnecessary intent problems, and forces prosecutors to charge cases in ways that do not fully reflect defendants’ conduct. Furthermore, the problems that accompany the Anti-Kickback Statute’s narrow reach are not resolved by looking to other federal laws. Existing laws such as the Eliminating Kickbacks in Recovery Act, the Criminal Health Care Fraud Statute, the Travel Act, and the Honest Services Fraud Statute do not adequately fill the gap. Similarly, state laws and private claims by private payers are also inadequate gap-fillers, particularly given that not all states have anti-kickback laws. Moreover, the multi-state nature of health care fraud, the resources required to address this conduct, and skyrocketing health care costs, caused partly by health care fraud, warrant federal engagement.

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