Kickbacks and Healthcare Fraud
Healthcare fraud is by far the most common violation of the False Claims Act (FCA). In 2025, over $5.7 billion in False Claims Act settlements and judgments were attributed to the healthcare industry, accounting for roughly 83% of all settlements that year. Usually, providers, insurers, or other parties violate the FCA by directly submitting false claims — claims for services that are not provided or claims that misrepresent the services provided. But that’s not the only way a South Carolina healthcare provider or insurer may violate the False Claims Act. Violations of the Anti-Kickback Statute or the Stark Law — both of which concern kickbacks — can make a claim false under the law even if it does not misrepresent the services billed.
The Anti-Kickback Statute (AKS) makes it a crime to offer or accept payment for referrals for services paid for by Medicare or South Carolina Medicaid. The AKS does not only forbid cash payments. The law extends to anything of value, from free office rent, to inflated consulting or lecture fees, to travel or other kinds of compensation. Regardless of the form the compensation takes, the key element is the intent of both parties to trade a benefit for a service or referral.
In addition to direct penalties for violating the AKS, the law also makes any Medicare or Medicaid claim resulting from a kickback legally false — even if the care was medically necessary and no patient harm occurred. That means that a South Carolina whistleblower who knows about a healthcare kickback scheme can file an FCA suit based on claims arising from the kickbacks without proving the underlying claims are false.
The Stark Law targets a related kind of conduct: physicians referring patients for care to entities the physician has some financial relationship with. For instance, doctors often refer patients to other facilities for imaging or lab work. Sometimes, the doctors own all or a part of the labs and facilities that provide such work and receive a financial benefit from the referral. The Stark Law prohibits such referrals — and renders any resulting claims legally false — unless an exception applies.
Both the Stark Law and the AKS can subject South Carolina health care providers who violate them to serious consequences. In 2024, a South Carolina‑based laboratory agreed to pay $6.8 million to resolve federal kickback allegations — a reminder that AKS violations can trigger substantial financial penalties. And South Carolina law also subjects those who engage in conduct prohibited by the AKS and Stark Law to criminal charges and fines.
But these laws are complicated and subject to many exceptions. If you suspect a healthcare provider or insurer is engaging in conduct that violates the AKS or the Stark Law, you should consult a knowledgeable, experienced South Carolina whistleblower attorney like the attorneys at Miller Law Group.
Sources
False Claims Act Settlements and Judgments Exceed $6.8B in Fiscal Year 2025, https://www.justice.gov/opa/pr/false-claims-act-settlements-and-judgments-exceed-68b-fiscal-year-2025
Fraud & Abuse Laws, https://oig.hhs.gov/compliance/physician-education/fraud-abuse-laws/
South Carolina Laboratory Pleads Guilty and Agrees to Pay At Least $6.8M to Settle Allegations of Kickbacks to Doctors, https://www.justice.gov/opa/pr/south-carolina-laboratory-pleads-guilty-and-agrees-pay-least-68m-settle-allegations
