Through corrupt bidding, the official can award the contract to a company, even though the company did not place the lowest bid. The company profits by having been awarded the bid and getting to perform the contract. In exchange for this corrupt practice, the company pays the official a portion of the profits. Some also consider kickbacks to be a type of bribery. See, e. Your Privacy Disclaimer Accessibility Statement. The information you obtain at this site is not, nor is it intended to be, legal advice.
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Search for:. Frequently Asked Questions. What are Kickbacks? Contents hide. Key Takeaways. Kickback Definition. The Legality of Kickbacks. Kickback Examples 4. Over Billing. Diverting business to vendors.
Using payments or compensation to refer patient. Conflict of Interest. Government Contracting Fraud and Kickbacks. How to Report Kickbacks. Related Resources 9. How-to Guides. Kickbacks are illegal payments or transfers of things of value in exchange for preferential treatment. Kickbacks occurring in federal healthcare programs or government contracting often form the basis for liability under the False Claims Act.
Direct cash payments, gifts, and overbilling constitute a violation of the anti kickback criminal statute. Kickback Examples. Some examples of common kickbacks in the healthcare industry include:. Social Security. Small Business. Emerging Markets. Your Privacy Rights. To change or withdraw your consent choices for Investopedia.
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Popular Courses. What Is a Kickback? Key Takeaways A kickback is an illegal payment intended as compensation for preferential treatment or any other type of improper services received. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate.
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Investopedia does not include all offers available in the marketplace. Related Terms Facilitating Payment A facilitating payment is a financial payment that may constitute a bribe and is made with the intention of expediting an administrative process. What Is Bid Rigging?
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