Seventh Circuit Adopts Broad Definition of Anti-Kickback “Referral”

The federal Anti-Kickback Statute makes it a crime to give or receive anything of value in return for “referral” of a Medicare patient.  But exactly what is a “referral”?  That’s the issue decided by the Seventh Circuit last Tuesday in United States v. Patel.

Patel is an internist with a heavy caseload of elderly Medicare patients.  When a patient needed home care, Patel’s staff provided the patient and family with an array of home health company brochures and let them choose one.  When the choice was made, Patel certified the patient for 60 days of home care.  If care was needed beyond the first 60 days, Patel recertified the patient.

One brochure was for Grand Home Health.  When a patient chose Grand, the company paid Patel $400 for the initial certification and $300 for each recertification.

Patel and his staff did not recommend Grand or suggest that patients choose it over other providers.  That was the essence of Patel’s case when he appealed his conviction for violating the Anti-Kickback Statute.  He argued that the statutory term “refer” means “recommend,” and since he didn’t recommend Grand, he wasn’t guilty of a referral.

Patel had a couple of factors on his side.  First, the statute has no definition of the term “refer.”  Second, courts normally interpret criminal statutes narrowly.

That wasn’t enough.  The Seventh Circuit affirmed Patel’s conviction, ruling that “referral” includes “authorization” or “certification” of a patient for care.  Every certification or authorization of care for a Medicare patient is a “referral.”  Receiving a kickback for authorizing or certifying care is an incentive to overauthorize, and that’s behavior targeted by the statute.

The case is No. 14-2607, 2015 BL 33639.

Today’s post was contributed by Norman G. Tabler, Jr.

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