Prohibitions Against Kickbacks, Self-Referrals and Fee Splitting

Objective

To ensure that CUIMC personnel comply with Federal and State law regarding kickbacks and self-referrals, and University rules regarding conflicts of interest.

Policy

CUIMC personnel will not engage in activities that violate the Federal and State laws regarding kickbacks and self-referrals (prohibitions relating to the submission of false claims are addressed in the next subsection of this Manual). In addition, in order to avoid conflicts of interest, every year, each physician and NPP employed by the University will complete a University Conflict of Interest form, provided electronically by the University.

The following is a brief description of the Federal and New York State anti-kickback and physician self-referral laws. Because these descriptions do not encompass every applicable requirement, you should consult the OFBC for further guidance.

  • Federal anti-kickback law: The Federal anti-kickback law provides criminal penalties for individuals and entities that knowingly offer, pay, solicit or receive bribes, kickbacks, rebates or other remuneration in order to induce or reward business that is reimbursable, in whole or in part, under a Federal health care program (including Medicare and Medicaid). The statute has been interpreted to cover any arrangement where one purpose of the remuneration (not necessarily the sole or primary purpose) was to induce referrals. Violation of the anti-kickback law is a felony, punishable by a fine of up to $25,000, imprisonment for up to five years, or both. Other possible penalties include the imposition of civil monetary penalties and exclusion from participation in Federal and State health care programs. Civil remedies may be imposed in an administrative proceeding, even in the absence of any criminal proceeding or investigation.
  • Federal physician self-referral law: The Federal physician self-referral law, commonly known as the “Stark Law,” generally prohibits a physician from referring Medicare and Medicaid patients for certain “designated health services” (“DHS”) to an entity with which the physician (or a member of the physician’s immediate family) has a financial relationship, unless certain exceptions apply. The law also prohibits an entity from presenting or causing to be presented a bill to anyone for a DHS furnished as a result of a prohibited referral. The DHS covered by the law included, among other things, durable medical equipment and supplies, impatient and outpatient hospital services, and outpatient prescription drugs. Unlike the anti-kickback law, which requires a knowing intent, the Stark Law imposes a blanket prohibition on referrals for DHS between a physician and an entity with which the physician has a financial relationship, regardless of the parties’ intent. The penalties for violating the Stark law include possible civil monetary penalties and exclusion from the Medicare and Medicaid programs.
     
  • New York State professional misconduct and Medicaid anti-kickback laws: Under New York State law, it is an act of professional misconduct for physicians and certain other health care practitioners to permit any person to share in, or to directly or indirectly request, receive, or participate in the division, transference, assignment, rebate, splitting or refunding of a fee for the provision of professional health care services (“fee-splitting”). Although physicians in private practice are entitled to purchase service from vendors at fixed, fair market fees, a physician could not, for example, pay a third party marketing firm a percentage of the physician’s revenues or profits. Faculty practice arrangements are generally exempt from this prohibition, so University-employed physicians are permitted to share their professional fees with the University. Violation of this law may result in the revocation, suspension, or annulment of the practitioner’s license, among other penalties. In addition, it is a crime for any New York State Medical provider to offer, solicit, give, receive, accept, or agree to give, receive, or accept any payment or other consideration, in any form, from any other person, for the referral of services, or to purchase, lease order any good, facility, service, or item for which Medicaid payment is made.
     
  • New York State self-referral law: The New York State self-referral law generally prohibits physicians and certain other health care practitioners from making referrals for clinical laboratory, pharmacy, radiation therapy, physical therapy, or x-ray or imagining services if the practitioner or his or her immediate family has a financial relationship with entity providing their service, and from seeking payment for services provided pursuant to a prohibited referral.

For more information, please contact the OFBC at 212-305-3842.


Office for Billing Compliance
Policy#: OFBC 10010
Original Date of Issue: 1996
Revised: 3/22/2023
Reviewed: 3/1/2024