Typically, a kickback is a fraudulent act committed by one party in exchange for preferential treatment by another. Kickbacks have a wide variety of forms. They can be gifts or referrals, cash, or material of value.
Kickbacks are a type of bribery and are generally illegal. They are used in the healthcare industry and are prohibited under the federal Anti-Kickback Statute (AKS).
Kickbacks can take many forms and can vary widely in size and scope. Kickbacks are illegal when they are given in exchange for preferential treatment. In addition, they interfere with the public official’s ability to make an unbiased decision.
Kickbacks are often used in government contracting. A government contract for office equipment requires contractors to bid against each other. This can create fertile ground for kickback schemes.
For instance, a cardiologist may receive remuneration for each stent inserted into a patient. He or she may also receive a luxury car or exotic vacation.
These types of kickbacks can be considered an illegal inducement because they are not covered by Medicare. It also constitutes an anti-competitive practice.
Another example of a kickback scheme is when a company pays a cardiologist to prescribe medicine for personal financial consideration. The cardiologist may have a personal connection to the medicine, but may not use an unbiased medical judgment.
Kickbacks are considered a serious crime in the eyes of the US legislatures and federal government. They are also one of the most difficult white-collar crimes to detect.