Written and maintained by CASRAI Editorial Board
Last updated
General information about federal law, not legal advice. Statute text and OIG pages checked 2026-11-01.
Short answer
Paying or receiving a kickback to generate federal health care program business is a felony under 42 U.S.C. 1320a-7b(b): a fine of up to $100,000, up to 10 years in prison, or both. For a medical supplier the same conduct can also bring civil monetary penalties, exclusion from federal health care programs, and False Claims Act liability for every tainted claim.
Definition and scope
The Anti-Kickback Statute (AKS) covers anyone who knowingly and willfully offers, pays, solicits or receives remuneration to induce or reward referrals of items or services paid for by a federal health care program. The statute defines that term as any plan or program providing health benefits funded directly, in whole or in part, by the US Government (other than the Federal Employees Health Benefits Program), plus any State health care program (42 U.S.C. 1320a-7b(f)). Suppliers of durable medical equipment, wound care, diabetic or respiratory supplies, and the buyers, distributors and referral sources around them fall inside that scope when federal programs pay. For the broader statute, safe harbors and Stark Law comparison, see our guide to the Anti-Kickback Statute in healthcare; this page covers only the consequences.
The four penalty tracks for a supplier
One arrangement can trigger several tracks at once, because the statute states that its penalties apply in addition to those in the related civil monetary penalty provision.
| Track | Source | What the source says |
|---|---|---|
| Criminal | 42 U.S.C. 1320a-7b(b)(1) and (b)(2) | Felony; fine of not more than $100,000, imprisonment of not more than 10 years, or both. Covers the person soliciting or receiving and the person offering or paying. |
| Civil monetary penalty | 42 U.S.C. 1320a-7a, kickback paragraph | $100,000 for each such act, plus damages of not more than 3 times the total remuneration offered, paid, solicited or received. These are base statutory amounts that are adjusted annually for inflation. |
| Exclusion | HHS OIG, Fraud and Abuse Laws | OIG states that penalties and sanctions for AKS violations include fines, jail terms and exclusion, and that OIG may exclude those who engage in unlawful kickback arrangements. |
| False Claims Act | 42 U.S.C. 1320a-7b(g) | A claim for items or services resulting from an AKS violation constitutes a false or fraudulent claim for the purposes of the civil False Claims Act. |
Anti kickback statute penalties: the figures still in circulation
Some trade articles and older agency text quote a $25,000 criminal fine, a 5-year maximum, or a $50,000 civil penalty per kickback. The statute text states $100,000 and 10 years for the criminal offense and $100,000 per act for the civil monetary penalty. Use the statute, and check OIG for the current inflation-adjusted civil amounts.
What "knowing and willful" does and does not require
The statute says a person need not have actual knowledge of the section or specific intent to commit a violation of it (1320a-7b(h)). A supplier cannot defend an arrangement simply by saying it did not know the AKS existed. Both sides are exposed: the party that pays and the party that receives are each named in the offense, so a buyer, a referral source and a supplier can all be liable for the same payment.
AKS penalties for a DME supplier and its trading partners
Where this matters in practice is the paper trail around any payment, discount, rebate, free item or service that flows between parties who could influence federal program business. Related reading: DME fraud schemes, the group purchasing organization safe harbor, medical supply wholesalers and OIG compliance program guidance.
A compliance file that maps to the statute and the safe harbors would show:
- Written agreement. Each arrangement that involves remuneration is documented, so it can be compared against the conditions of the relevant safe harbor at 42 CFR 1001.952.
- Safe-harbor mapping. For each arrangement, which safe harbor (if any) it is meant to fit. OIG describes the safe harbors as payment and business practices that are not treated as offenses under the statute.
- Both sides identified. Who pays, who receives, and whether either party can generate or arrange federal program business.
- Remuneration traced. Anything of value, in cash or in kind, is recorded, because the offense turns on remuneration, not on a cash payment.
- Claims linkage. Which claims to Medicare, Medicaid or other federal programs involve items or services touched by the arrangement, since those are the claims the False Claims Act track reaches.
The arrangements an organization actually uses should be reviewed by qualified health care counsel.
Common misunderstandings
"We missed the safe harbor, so it is illegal"
Not automatically. Safe harbors are voluntary protections; an arrangement that does not fit one is not an automatic violation, but it is no longer protected and is judged on its facts and intent.
"The maximum is only $100,000"
That figure is the per-offense criminal fine and the per-act civil penalty. The civil track adds damages of up to three times the remuneration, imprisonment is separate, and each tainted claim can carry False Claims Act exposure. Exclusion removes the ability to bill federal programs at all.
"Only the person taking the payment is at risk"
The statute names both the person who offers or pays and the person who solicits or receives.
"OIG guidance is the law"
OIG pages explain how it reads the statute. The penalties come from the statute itself, so cite the U.S. Code, not a summary.
FAQ
What are the anti kickback statute penalties?
Criminal: a felony with a fine of up to $100,000 and up to 10 years in prison. Civil: $100,000 per act plus up to three times the remuneration, as base statutory amounts. Administrative: possible exclusion. Plus False Claims Act treatment of tainted claims.
What are AKS penalties for a DME supplier?
The same ones. The statute does not set a separate scale for equipment suppliers; it applies to anyone who offers, pays, solicits or receives remuneration tied to federal health care program business.
Does a supplier need to know about the statute to be liable?
No. Under 1320a-7b(h), actual knowledge of the section or specific intent to violate it is not required.
Sources
- 42 U.S.C. 1320a-7b, Criminal penalties for acts involving Federal health care programs (Cornell LII, checked 2026-11-01)
- 42 U.S.C. 1320a-7a, Civil monetary penalties (Cornell LII, checked 2026-11-01)
- HHS OIG, Fraud and Abuse Laws (checked 2026-11-01)
- HHS OIG, Safe Harbor Regulations (checked 2026-11-01)
