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How does the Anti-Kickback Statute's bona fide employee safe harbor work?

If you work in the health care industry, then you are probably familiar with the federal Anti-Kickback Statute, which is a federal regulation that prohibits the exchange (or offer of exchange) of any type of gift or payment in an effort to reward or induce referrals for federal health care program business.

The penalties for both individuals and businesses charged with violating the Anti-Kickback Statute are very serious, including tens of thousands of dollars in criminal fines and civil penalties, prison time, and exclusion from federal healthcare programs.

But there are exceptions to the broad Anti-Kickback Statute as well.

The Bona Fide Employee Safe Harbor

Some payments that would appear to be prohibited under the Anti-Kickback Statute are actually lawful under the statute's "safe harbor" exceptions, including payments made to "bona fide employees." This exception generally protects payments that are made by an employer to an employee, even if the employee generates for referrals for the employer.

However, in order for the safe harbor to apply, the employee must have a bona fide employment relationship with the employer. 

Non-Provider Bona Fide Employees

The rules are more complicated and opaque for non-provider employees such as marketers. As we explained in an article on our website, the safest approach with an employee whose main purpose is to generate referrals is to compensate them with a minimal regular salary and provide bonuses based on numerous factors in addition to the volume of referrals. This is so that their compensation is not based entirely on the number or amount of referrals generated.

For example, an employer could base a portion of a marketer's bonus on production and referrals, but also factor in teamwork, attitude and similar non-production-based contributions.

The Anti-Kickback Statute has been a major source of litigation over the past few years because it is a broad regulation that can be difficult to interpret. The best option for any health care professional or business is to speak with a health care attorney who can provide knowledgeable advice that is catered to your specific situation.

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