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Health Care Fraud Prosecutions — Kickback Schemes

Health Care Fraud Cases

There are several fraud activities that are the basis for federal government investigations and prosecutions. Common prosecutions are for overbilling, upcoding, unnecessary procedures, procedures not performed, and prescribing treatments that are not “medically necessary.” Federal prosecutors also often charge physicians, their staff, and other medical professionals and employees with kickback schemes. These schemes are essentially bribes to medical professionals who are willing to refer the briber’s product to patients.

Various health care professionals are targets of investigation for health care fraud activities, including kickback schemes. They include doctors, chiropractors, nurse practitioners, nurses, medical staff, hospital administrators, pharmacists, and marketing persons.

“Kickback” Schemes and Conspiracies

What is a Kickback?

A “kickback” is a payment in exchange for receiving an award, contract, or something of value due to corrupt influences. The contract or award is from the person in a position to manipulate giving the contract or thing of value to the person who made the payment. The word “kickback” means that the person who receives the thing of value “kicks back” money or a portion of the earnings from the contract or other item of value. It is essentially a bribe to pay the person in authority to use his position. The person in authority ensures that the person paying the kickback will receive the contract or other thing of value.

Common examples of projects or contracts in which kickback schemes are used include contracts for construction projects, commissary / food contracts, maintenance contracts, and contracts for services, and medical products.

Payments and Things of Value

Payments as kickbacks, that is, the bribe to obtain a contract or award, is sometimes made in cash.  Kickback cash payments are hidden from all other persons besides the participants. Often, payments are large, so they are made by checks or wire transfers and disguised as legitimate business payments. These type of payments could be in the form of:

  1. Overpaying for assets;
  2. Payments for bogus services or equipment;
  3. Payments for “fees” or “commissions;”
  4. Unnecessary leases;
  5. Travel and entertainment expenses;
  6. Payments to, or awarding contracts to, relatives of the person making the payment;
  7. Undisclosed gifts.


The person in authority can rig the bidding process to ensure that his person or company will receive the contract. The person with authority can also leak information to assist the company that he wants to receive the contract. The person with authority can also change the bidding process to favor the company he wants to receive the contract.

These are examples of corruption in regard to carrying out a kickback scheme by receiving bribes to exert the influence needed.

How Do Kickbacks Come into Health Care?

The federal Anti-Kickback statute prohibits persons from paying or receiving things of value for referring patients, or prescribing certain drugs or products, for which they will be paid.

For example, a drug company or medical products company, or its marketing company, cannot pay doctors or other medical professionals.  These payments would be to have patients, clinics, or hospitals use their product over others on the market.

Payments in kickback schemes are sometimes in cash, but also are often in the form of receiving referrals of patients to doctors from drug companies or marketing companies. The referrals of patients, of course, provides sources of business for the doctors, and is done so as an exchange for doctors to continue pushing the bribing company’s product on the patients.

What to Do If You Are a Target of the Investigation

Hire an experienced federal defense attorney who has been a federal prosecutor, and who is familiar the U.S. Attorney’s / Department of Justice’s health care prosecutions.

An experienced federal defense attorney can learn of the evidence that the U.S. Attorney and agents believe they have against you. An attorney may be able to delay formal charges by meeting with prosecutors and making presentations of potential evidence.


You want to present your favorable evidence to the prosecutor, with a goal of avoiding formal charges. If your investigation is moving toward an Indictment (formal charges) regardless, you will still need to complete your own investigation. An experienced federal defense attorney can help you with these decisions.

Contact Attorney John Teakell

Mr. Teakell was a federal prosecutor for many years and has years of experience defending federal investigations and federal Indictments. This includes health care fraud, and if you are under investigation, call for help.

Have a challenging case? Get a free consultation by our experts