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A kickback is a payment that partially offsets a larger payment in another direction. The term often connotes a secret or illegal payment, such as a form of negotiated bribery in which a commission is secretly paid to the person who arranges a deal. Generally speaking, the remuneration (money, goods, or services handed over) for a kickback is negotiated ahead of time. The kickback varies from other kinds of bribes in that there is implied collusion between agents of the two parties, rather than one party Extortion the bribe from the other.Wrage, Alexandra Addison. Bribery and Extortion: Undermining Business, Governments, and Security. Westport, Conn.: Praeger Security International, 2007. p. 14. The purpose of the kickback is usually to encourage the other party to cooperate in the scheme.Kranacher, Riley, and Wells, p. 387.
The term "kickback" comes from Colloquialism English language, and describes the way a recipient of illegal gain "kicks back" a portion of it to another person for that person's assistance in obtaining it.Campos, p. 299.
"Kickback brokers" are individuals who may not receive the kickback personally, but who help link the individual or company providing the goods or services with individuals capable of assisting with the illegal payments. For helping to link the two colluding parties, either or both parties may make a payment to this "broker".Campos, p. 299–300.
Kickback schemes can be pervasive. For example, in the United States, companies providing medical services to Medicare patients were paying doctors to send patients to them, whether or not the patient needed the treatment, diagnosis, or test. In 1986, the United States Congress passed the stringent Anti-Kickback Enforcement Act to prevent such schemes.Buchbinder and Shanks, p. 365. The Anti-Kickback Statute ("AKS") prohibits medical providers and physicians from paying or receiving kickbacks or any financial benefits in return for referrals of patients who are covered under federal healthcare programs such as Medicare, Medicaid and TRICARE. However, shortly thereafter, the Office of Inspector General of the U.S. Department of Health and Human Services implemented two "safe harbor" exemptions to the Federal Antikickback Statute for "rebates" paid by pharmaceutical companies to Pharmacy Benefit Managers (PBMs) to secure preferred placement on drug formularies, and a second "safe harbor" exemption for Group Purchasing Organizations (GPOs). Lawmakers in both U.S. political parties have enabled these legally-exempted kickbacks to continue in the U.S. healthcare space.
In Italy, the political scene was realigned dramatically by the Mani pulite scandals in the 1990s, which uncovered widespread use of kickbacks in the national and local governments.
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