Minnesota has introduced a new state law that mirrors the federal Anti-Kickback Statute (AKS), creating tougher consequences for health care providers who offer or accept improper payments in connection with patient referrals or services. The new law, known as Minn. Stat. Ann. § 609.542, takes effect on August 1, 2025, and is part of the state’s criminal code. It makes it illegal to intentionally give, receive, or offer anything of value—such as money, discounts, rebates, or jobs—in exchange for referring patients or providing items or services paid for by federal or Minnesota health care programs, including the Minnesota Behavioral Health Program and the Minnesota Child Care Assistance Program. The rule does not apply to services reimbursed by private insurance companies.
Unlike the federal AKS, which requires proof that a person “knowingly and willfully” broke the law, Minnesota’s version only requires that the act was “intentional.” This difference could make it easier for state prosecutors to prove wrongdoing and lead to more enforcement actions. The penalties are also severe: violations involving kickbacks worth over $35,000 can lead to up to 20 years in prison, fines of up to $100,000, or both. Kickbacks valued between $5,000 and $35,000 could result in 10 years in prison and a $20,000 fine, while those under $5,000 carry a penalty of up to five years in prison and a $10,000 fine. Prosecutors can also combine multiple payments or benefits within a six-month period to determine the total value of a kickback, potentially increasing the penalties.
However, the law does include certain protections. Minnesota incorporated the same “safe harbors” and exemptions found in the federal AKS, which allow some common business practices—such as legitimate discounts, employment relationships, or properly structured contracts—to remain legal. Additional exceptions are in place for money paid by employers to employees for work tied to the state’s child care assistance program, as well as for financial aid or discounts given to families as part of that program.
Even though most health care organizations operate under compliance programs designed to meet federal standards, the new Minnesota law heightens the potential for criminal exposure. The shift from “knowing and willful” intent to “intentional” conduct means that even actions without malicious intent could still result in prosecution if they appear to involve improper exchanges of value. This uncertainty around how courts will interpret “intentional” behavior makes it more important for organizations to be cautious in their interactions and financial arrangements.
The risks don’t end with the kickback penalties. Any claims for payment submitted to state or federal health programs that involve a violation of this law could also be considered false or fraudulent claims under Minnesota’s False Claims Act, exposing entities to even greater penalties. This mirrors the way the federal government handles claims influenced by kickbacks and may lead to similar enforcement trends in Minnesota.
In practical terms, the new law is not expected to disrupt the everyday operations of most health care providers. However, it sends a clear signal that Minnesota is taking a tougher stance against any form of improper financial incentives in health care. Providers, suppliers, and other organizations involved in government-funded health programs should take time to review their compliance policies, ensure their arrangements fall within safe harbors, and stay alert to how state authorities interpret and enforce the new statute. Doing so will help minimize risk as Minnesota begins implementing this law.
