A federal kickback case no longer turns on whether a physician, pharmacy owner, or device executive knew the Anti-Kickback Statute existed. Section 6402(f) of the Affordable Care Act added 42 U.S.C. § 1320a-7b(h) in 2010: “a person need not have actual knowledge of this section or specific intent to commit a violation of this section.” Prosecutors read that as lowering the bar. The statute still requires the arrangement to be knowing and willful, and the amendment left that phrase alone. For anyone defending a matter built on a referral, lease, or marketing arrangement, the gap between those two readings is the case.
What the ACA Amendment Actually Removed
Before 2010, some defendants argued a lack of familiarity with the Anti-Kickback Statute itself as a defense. Subsection (h) closed that door: a defendant cannot avoid liability by claiming ignorance of the statute's existence. What the amendment did not do is convert the statute into a strict-liability or negligence standard. The underlying criminal provision, 42 U.S.C. § 1320a-7b(b), still punishes only remuneration offered, paid, solicited, or received knowingly and willfully to induce referrals, and that phrase carries its own meaning the ACA left untouched.
What 'Knowing and Willful' Still Requires
Post-amendment courts describe willfulness as acting voluntarily and purposely, with the specific intent to do something the law forbids, that is, with a bad purpose either to disobey or disregard the law. The Eleventh Circuit used that formulation in United States v. Sosa, 777 F.3d 1279, 1293 (11th Cir. 2015); the Fifth Circuit applied the same language in United States v. Nora, 988 F.3d 823, 830 (5th Cir. 2021). The line these courts draw is between not knowing the statute's name, which the amendment makes irrelevant, and not knowing the arrangement was wrong in any sense, which still defeats willfulness. An arrangement that was sloppy or based on a mistaken safe-harbor belief is not automatically a knowing and willful violation.
Where the Circuits Disagree on What Knowledge Means
The Second Circuit pushed further in United States ex rel. Hart v. McKesson Corp., 96 F.4th 145, 154 (2d Cir. 2024), holding that willfulness requires only knowledge the conduct was unlawful in some way, not that it specifically violated the Anti-Kickback Statute. The Supreme Court denied certiorari in Hart and in the related Sayeed v. Stop Illinois Health Care Fraud, LLC on October 7 and October 15, 2024, leaving circuits to apply their own language. For a provider, the practical effect is similar across circuits: the government must show the defendant understood the arrangement was improper in some general sense, a harder showing than the that separates a civil overpayment from a criminal referral.
Proving the defendant knew the arrangement was wrong is still the government's burden.
Why Documentation Decides Which Track a Case Follows
A single referral arrangement under scrutiny can carry parallel exposure under the civil False Claims Act, the when a physician's own financial relationship is at issue, and the criminal Anti-Kickback Statute at the same time. Contracts amended or notes added after an investigation is known to be underway, the pattern addressed in , can turn an otherwise defensible willfulness argument into evidence of concealment, satisfying the bad-purpose standard regardless of which circuit's formulation applies.
Why Early Legal Counsel Is Critical
It is critical that physicians, pharmacy owners, and healthcare companies promptly retain experienced healthcare defense counsel upon receiving a grand jury subpoena, a civil investigative demand, or any other government inquiry touching a referral, lease, or compensation arrangement. Early legal intervention can protect the provider's rights, ensure appropriate responses to government requests, avoid inadvertent admissions, preserve relevant defenses, and allow counsel to communicate with investigators on the provider's behalf. Delaying legal representation can significantly affect the outcome of a matter and expose the provider to unnecessary risk.
How Health Law Alliance Can Help
A criminal Anti-Kickback Statute conviction can lead to exclusion from federal healthcare programs, addressed in Appealing an OIG Exclusion, on top of any sentence. A civil investigative demand or a grand jury subpoena can each open that inquiry, and the willfulness element is frequently where the defense is won or lost well before trial.
Health Law Alliance's attorneys have overseen 2,000+ audits and handled 5,000+ matters, with 25+ years of experience.
If your practice, pharmacy, or healthcare company has received an inquiry touching a referral, compensation, or marketing arrangement, through our practice before responding to the government.
