If an AKS arrangement fails to meet safe harbor criteria, what is the likely status?

• A. It may be unlawful
• B. It is automatically compliant
• C. It becomes exempt from penalties
• D. It requires no documentation

Answer: (A)

Safe harbors protect certain arrangements from liability under the Anti-Kickback Statute only if every condition is met. When an AKS arrangement does not satisfy those safe harbor criteria, that protective shield doesn’t apply, and the arrangement becomes vulnerable to enforcement. In practical terms, this means it may be unlawful or at least expose the parties to criminal or civil penalties and other sanctions. The safe harbor framework is designed to reduce risk by specifying exactly which practices are permissible; stepping outside those parameters removes that protection, even if the overall intent or business purpose seems legitimate.