The Anti-Kickback Statute, Stark, and dental comp design

The Anti-Kickback Statute (AKS) is a criminal, intent-based prohibition on knowingly and willfully offering, paying, soliciting, or receiving remuneration to induce or reward referrals or orders for items or services reimbursable by a federal health care program. The Stark Law is a civil, strict-liability prohibition on certain physician referrals for designated health services to entities with which the physician has a financial relationship, unless an exception applies. In dentistry the statutes have different practical reach: Stark is often peripheral to ordinary dental services, while the AKS can apply when a remuneration arrangement involves federally reimbursable business.¹

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The two statutes side by side

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Why Stark is often less central for dentists

Not because dentists are exempt. Stark’s definition of “physician” borrows the Medicare definition, which includes doctors of dental surgery and dental medicine.¹ The reason is narrower and structural:

1. Stark focuses on referrals for designated health services (DHS) payable under the statute’s program rules. The listed categories include clinical laboratory services, certain imaging, physical therapy, DME, and hospital services.¹
2. Medicare excludes many routine dental services under SSA § 1862(a)(12), subject to coverage rules and exceptions, so ordinary exams, restorations, hygiene, and extractions often do not generate Medicare-payable DHS. See Medicare and dental.
3. Many routine dental-specialty referrals are not DHS referrals. Stark still requires a fact-specific analysis when a dentist orders or refers for an enumerated service payable under the applicable program rules.

Stark can surface at dentistry’s medical edges: an oral surgery practice furnishing Medicare-payable services, imaging billed to a medical benefit, or sleep appliances billed as Medicare DMEPOS. If a group touches those services, analyze the referral, financial relationship, DHS category, billing entity, and available exception. Stark is strict liability when its elements are met; do not rely on lack of intent as a defense.

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How the AKS can apply to dental arrangements

The AKS reaches remuneration, broadly meaning something of value, when the statutory intent and federal-program nexus are present. Medicaid is a federal health care program, so dental Medicaid arrangements can fall within the statute. Application remains fact-specific. Identify the remuneration, the parties, the intended referral or order, the reimbursable items or services, the relevant intent evidence, and any statutory exception or regulatory safe harbor.¹ This is not theoretical in dentistry:

• MB2 Dental Solutions (2017). The $$8.45 million FCA settlement with MB2, 19 affiliated practices, and their owner-dentists included allegations of kickbacks paid to Medicaid beneficiaries and their families, marketers, and marketing entities in violation of the AKS. The allegations also covered unrendered fillings and misattributed provider numbers. The settlement bound the DSO, the settling practices, and individuals, and included a five-year corporate integrity agreement.²
• Connecticut (2025). The state announced a $$495,721 false-claims settlement resolving allegations involving prohibited patient-recruiting fees under state law.³
• Texas has sued dental providers together with their marketers under its Medicaid fraud statute, treating the marketing arrangement itself as part of the fraud.⁴

Remuneration can take forms other than cash handed directly to a clinician. The cited dental matters include allegations involving per-patient marketing fees, payments or gifts to beneficiaries and their families, and recruiting fees. Those settlements are matter-specific and do not make every marketing or patient-support arrangement unlawful.

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Marketing and patient acquisition are recurring risk areas

Dental groups often rely on patient acquisition, and some marketing arrangements can create AKS questions:

• Paying per patient acquired, per referral, or a percentage of revenue from referred patients can create substantial AKS risk when federal-program business and the required intent are present. A flat fee and fair-market-value support may reduce some risk, but neither is an automatic safe harbor.
• Giving something of value to a Medicaid beneficiary or family member to induce utilization can implicate the AKS, the beneficiary-inducements civil monetary penalty law, program rules, or state law. Have counsel review any patient-incentive program, including potentially applicable exceptions and safe harbors, before launch.
• Referral marketing aimed at other practices, such as paying general dentists for specialty referrals or funding perks for referring offices, is remuneration to a referral source.
• Using a marketing entity does not end the analysis. The MB2 settlement included marketing defendants. Evaluate the payment methodology, services, referral relationship, federal-program nexus, and intent rather than relying on the intermediary’s label.

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State analogues may reach non-federal business

Federal AKS liability requires the statutory federal-program nexus. State dental-practice, referral, fee-splitting, insurance-fraud, and consumer-protection provisions may apply independently and may not turn on payer type. The text, exceptions, enforcement authority, and available remedies vary by state. For example:

• Hawaii makes division or splitting of fees for dental services “with any person for bringing or referring a patient” a ground for license suspension or revocation. Haw. Rev. Stat. § 448-17(b)(5).⁵
• Georgia’s dental board rule is blunter still: “A dentist shall not give rebates or split fees with a referral source.” Ga. Bd. of Dentistry Rule 150-8-.02.⁵

Many states have analogous restrictions, but their scope differs. Depending on the statute or rule, consequences may include license discipline, administrative or civil penalties, contract unenforceability, or other remedies against the persons or entities within the enforcer’s jurisdiction. A practice with no federal-program business may avoid federal AKS exposure yet remain subject to state-law restrictions. See Fee-splitting rules and your state’s page in DSO laws by state.

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Where the AKS touches the DSO structure itself

The management fee. A fee tied to referral or claims volume may implicate the AKS when the parties generate federally reimbursable business for one another and the other statutory elements are present. Percentage-of-collections fees may also raise separate state fee-splitting or corporate-practice issues. See Set the management fee. Friendly-owner compensation. Analyze whether compensation reflects bona fide services, fair market value, commercial reasonableness, referral or business-generation metrics, and the requirements of any exception or safe harbor on which the parties intend to rely. See Structure friendly-owner compensation. Dentist compensation. Compensation for a dentist’s own personally performed services can be treated differently from payment for referrals, but the arrangement still requires analysis under the applicable employment or personal-services rules and state law. Production-based compensation has also appeared in government allegations concerning clinical influence and unnecessary treatment; it is evidence to evaluate, not automatic proof of FCA knowledge.⁶ See Billing compliance basics. Free or discounted benefits for a referral source. Free space or staff, below-market rent, or free technology access may constitute remuneration. Then analyze intent, federal-program nexus, valuation, and any applicable exception or safe harbor.

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Relevant safe harbors

Safe harbors at 42 C.F.R. § 1001.952 describe arrangements protected from AKS liability. The ones that recur here: These summaries are issue-spotters, not the full regulatory tests. Confirm every element of the specific safe harbor being used; failure to fit a safe harbor does not by itself establish an AKS violation.

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Practical rules

• Treat per-referral, per-patient, and per-case payments to referral or recruiting sources as high risk and obtain fact-specific advice before use
• Treat percentage-of-revenue payments to a referral source as high risk where federal or state referral restrictions apply
• Review anything of value offered to a Medicaid beneficiary for the AKS, beneficiary-inducements law, program rules, state law, and available exceptions before launch
• Put compensation arrangements in writing and satisfy the exact documentation, term, and compensation-methodology requirements of any relied-upon safe harbor or exception
• Document FMV with a study or a defensible benchmark, and refresh it
• Document commercial reasonableness, why the arrangement makes sense on its own
• Maintain documented exclusion screening against OIG LEIE, SAM.gov, and any required state lists at a cadence matched to payer, program, state-law, and risk requirements
• Have counsel review any marketing or referral arrangement before it starts

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The False Claims Act connection

The consequences can multiply. A claim that includes items or services resulting from an AKS violation constitutes a false or fraudulent claim for FCA purposes.⁷ FCA damages can be trebled and civil penalties assessed per claim; qui tam provisions allow private relators to sue and potentially share in a recovery. Dental-chain matters have also proceeded under medical-necessity, services-not-rendered, provider-identification, state corporate-practice, and consumer-protection theories. Do not describe every matter as an AKS case. See the DSO enforcement tracker.

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Sources

1. Stark Law, 42 U.S.C. § 1395nn; “physician” defined by reference to 42 U.S.C. § 1395x(r), which includes doctors of dental surgery or dental medicine; designated health services defined at 42 C.F.R. § 411.351. CMS, Physician Self-Referral. AKS at 42 U.S.C. § 1320a-7b(b); safe harbors at 42 C.F.R. § 1001.952. OIG, Fraud & Abuse Laws.
2. U.S. Attorney’s Office, N.D. Tex., Texas Dental Management Firm, 19 Affiliated Dental Practices, and Their Owners and Marketing Chief Agree to Pay $$8.45 Million (Jan. 9, 2017); Texas AG, parallel announcement; OIG, MB2 corporate integrity agreement. Settlement allegations, not adjudicated findings.
3. Connecticut Attorney General, False Claims Settlement with Dentists over Prohibited Patient-Recruiting Fees (2025), $$495,721.
4. Texas Attorney General, Paxton Sues Dental Providers and Fraudulent Marketers. Allegations in a filed suit, not findings.
5. Haw. Rev. Stat. § 448-17(b)(5), HRS ch. 448 (official compilation); Ga. Bd. of Dentistry Rules, ch. 150-8 (Unprofessional Conduct), Rule 150-8-.02. Most states have an analogue; verify yours with counsel.
6. E.g., DOJ, Benevis and Kool Smiles settlement (Jan. 10, 2018), reciting production goals enforced by cash bonuses and discipline; U.S. Attorney’s Office, W.D. Ky., ImmediaDent/Samson settlement (Nov. 6, 2018).
7. 42 U.S.C. § 1320a-7b(g) (a claim resulting from an AKS violation constitutes a false or fraudulent claim under the False Claims Act, 31 U.S.C. §§ 3729–3733).