Anti Kickback Law: What It Is, Who It Covers, and What You

The anti kickback law, as enforced through the False Claims Act, is one of the federal government’s most powerful tools against fraud involving government money. If you have witnessed a payment, referral arrangement, or financial relationship at work that felt wrong — particularly in healthcare or defense contracting — understanding this law is the right first step. This article explains what the statute prohibits, how a private individual can report violations, and what protections exist if an employer retaliates.

The core federal civil statute is 31 U.S.C. § 3729, which imposes liability on any person who knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval to the federal government — including claims that are tainted by kickback arrangements. Reading this article will help you understand the framework; it is not a substitute for speaking with an attorney about your specific situation.

What the Anti Kickback Law Actually Prohibits — and Why It Matters to You

Under 31 U.S.C. § 3729(a)(1), civil liability attaches to any person who knowingly presents or causes to be presented a false or fraudulent claim, knowingly makes or uses a false record or statement material to such a claim, or conspires to commit those acts. A kickback arrangement becomes a False Claims Act matter when it causes a claim submitted to the government to be false or fraudulent — the kickback corrupts the underlying transaction, and the law reaches everyone involved in that chain.

The statute’s reach is broad in two important ways. First, liability extends not only to the person who directly submits the false claim, but also to anyone who causes a false claim to reach the government, anyone who uses a false record material to such a claim, and anyone who conspires in those acts under § 3729(a)(1)(A), (B), and (C). Second, the definition of “claim” covers not only requests made directly to a federal officer or employee, but also requests made to a contractor, grantee, or other recipient if the money or property is to be spent or used on the government’s behalf or to advance a government program or interest, and if the United States provides or has provided any portion of the money or property requested, or will reimburse such contractor, grantee, or other recipient for any portion of it.

Critically, the statute defines “knowing” and “knowingly” to mean that a person has actual knowledge of the information, acts in deliberate ignorance of the truth or falsity of the information, or acts in reckless disregard of the truth or falsity of the information — and the statute expressly states that these terms require no proof of specific intent to defraud. This means a party cannot escape liability simply by claiming it did not know its claims were false.

How the False Claims Act Reaches Kickback Schemes

The Connection Between Kickbacks and False Claims

A kickback arrangement becomes a False Claims Act matter when it causes a claim submitted to the government to be false or fraudulent. Healthcare programs such as Medicare and Medicaid, as well as defense contracting, are common contexts where this connection arises, because both involve large volumes of claims submitted to the federal government or to recipients spending federal funds.

Civil Penalties the Law Provides For

Under 31 U.S.C. § 3729(a)(1), a person found liable is subject to a civil penalty of not less than $5,000 and not more than $10,000, as adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990, plus 3 times the amount of damages the government sustains because of the act of that person. Those figures apply per violation, meaning exposure can multiply quickly across a pattern of false claims.

The statute does provide a path to reduced damages. Under § 3729(a)(2), if the court finds that the person committing the violation furnished officials of the United States responsible for investigating false claims violations with all information known to that person about the violation within 30 days after the date on which the defendant first obtained the information, that person fully cooperated with any government investigation of the violation, and at the time that person furnished the United States with the information, no criminal prosecution, civil action, or administrative action had commenced under the relevant title with respect to the violation and the person did not have actual knowledge of the existence of an investigation into the violation, the court may assess not less than 2 times the amount of damages the government sustains rather than 3 times.

In healthcare settings, related federal rules — including anti kickback statutes and the Stark Law — work alongside the False Claims Act to address financial arrangements that improperly influence medical decision-making and government billing.

Your Option to Report: The Qui Tam Mechanism

Who Can File and How It Works

Under 31 U.S.C. § 3730(b)(1), a person may bring a civil action for a violation of section 3729 for the person and for the United States Government; the action shall be brought in the name of the Government. This private plaintiff is called a “relator,” and the mechanism is known as a qui tam action.

The complaint is filed in camera, shall remain under seal for at least 60 days, and shall not be served on the defendant until the court so orders, as provided by § 3730(b)(2). This means the defendant is not notified while the government investigates. At the time of filing, the relator must serve the government with a copy of the complaint and a written disclosure of substantially all material evidence and information the person possesses. The government then decides whether to intervene and take over the action, or to decline and allow the relator to proceed independently.

What the Law Provides for Relators Financially

Under 31 U.S.C. § 3730(d), if the government proceeds with the action, the relator shall receive at least 15 percent but not more than 25 percent of the proceeds of the action or settlement, depending upon the extent to which the person substantially contributed to the prosecution — subject to the proviso that where the action is based primarily on public disclosures of specific information not provided by the relator, the court may award no more than 10 percent of the proceeds. If the government does not proceed with the action, the relator shall receive an amount that is not less than 25 percent and not more than 30 percent of the proceeds of the action or settlement.

In either scenario, the relator is also entitled to an amount for reasonable expenses which the court finds to have been necessarily incurred, plus reasonable attorneys’ fees and costs — and all such expenses, fees, and costs shall be awarded against the defendant, not deducted from the relator’s share. These figures represent what the statute provides for; no particular outcome can be assured in any individual case.

Retaliation Protections: What the Law Provides If Your Employer Pushes Back

Covered Conduct and Covered Workers

Under 31 U.S.C. § 3730(h), any employee, contractor, or agent is entitled to protection if discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of lawful acts done in furtherance of a False Claims Act action or other efforts to stop one or more violations. Protection is not limited to people who have already filed suit — the statute covers the broader category of efforts to stop violations.

Remedies the Statute Provides

Relief under § 3730(h)(2) includes reinstatement with the same seniority status that employee, contractor, or agent would have had but for the discrimination; 2 times the amount of back pay; interest on the back pay; and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys’ fees. A civil action under this subsection may not be brought more than 3 years after the date when the retaliation occurred.

If practices like these look familiar from your own workplace, you can discuss what you have seen with a Price Armstrong attorney confidentially and at no cost. Call (888) 670-9542 or use the secure evaluation form below.

Frequently Asked Questions

Does the False Claims Act cover kickbacks in Medicare and Medicaid?

Yes. The False Claims Act covers any claim made to a contractor, grantee, or other recipient if the money is to be spent on the government’s behalf or to advance a government program or interest and the United States provides or will reimburse any portion of the money — which includes Medicare and Medicaid claims tainted by kickback arrangements, as provided by 31 U.S.C. § 3729(b)(2).

How long does a relator have to file a False Claims Act claim?

Under 31 U.S.C. § 3731(b), a civil action may not be brought more than 6 years after the date on which the violation is committed, or more than 3 years after the date when facts material to the right of action are known or reasonably should have been known by the official of the United States charged with responsibility to act in the circumstances — but in no event more than 10 years after the date on which the violation is committed, whichever occurs last.

What if I participated in the scheme I want to report?

Under 31 U.S.C. § 3730(d)(3), if the court finds that the action was brought by a person who planned and initiated the violation, the court may reduce the share of the proceeds that person would otherwise receive, taking into account that person’s role in advancing the case to litigation and any relevant circumstances. If the person bringing the action is convicted of criminal conduct arising from their role in the violation, that person shall be dismissed from the civil action and shall not receive any share of the proceeds. Speaking with an attorney about your specific circumstances before filing is strongly advisable.