Medicare-Medicaid Anti-Fraud and Abuse Amendments of the 1997 Balanced Budget Act apply to virtually any health care contract. The anti-kickback provisions of the statute prohibit an individual from wittingly and willfully compensating in an obvious form (e.g., money, rebate, in-kind services, free-bees, etc.), or in an indirect or disguised form for referring a patient for the furnishing or arranging of a service (e.g., a referral) covered by Medicare or Medicaid.

1) This statute was designed
   A) To prevent arrangements that limit the freedom of the patient to choose a provider, and
   B) To prevent unnecessary utilization, and to reduce costs to federal programs by decreasing or eliminating medically unnecessary procedures or services.
2) Any person-payer and receiver of such prohibited remuneration-may be guilty of a felony for violating this statute
    A) Upon conviction they will be excluded from further participation in Medicare and Medicaid, and they will be fined or imprisoned, or both.
3) To qualify for safe harbor exemptions, there must be:
     A) A formal agreement.
         i) It must specify all full-time or part-time services to be provided
         ii) It must be set out in writing;
         iii) It must be signed and dated by all involved parties
         iv) The term of the agreement must not be less than one year
         v) In all cases, fair market value applies, however,
         vi) Compensation does not have to take into account the value or volume of the referrals.
4) Safe Harbors:
     A) The waiver of deductibles and coinsurance
     B) Reasonable discounts for items or services
     C) Certain investment interests by doctors
     D) Personal and management service contracts between physicians and institutions
     E) If the services are provided on a part-time basis, the schedule of services and payments for services must be set in advance.
     F) Space and equipment rental arrangements
     G) Sale of medical practices
     H) If, however, a business transaction addresses several types of payments covered by more than one safe harbor, all elements of each safe harbor must be met to ensure compliance.