Seventh Circuit Embraces Use of “One Purpose” Standard Under Anti-Kickback Statute

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Recently, in United States v. Borrasi,1 the Seventh Circuit aligned with the Third, Fifth, Ninth, and Tenth Circuits in determining that the Anti-Kickback Statute (AKS)2 is violated where at least a portion of a payment made to a physician was intended to induce that physician to refer patients to the paying entity. In so doing, the court affirmed the so-called “one purpose” standard that holds that a payment is illegal under the AKS where one purpose of the payment is to induce referrals. The court also rejected the appellant’s request to adopt a “primary motivation” standard under which the trier of fact would be required to determine the defendant’s intent and find the defendant not guilty if the primary motivation behind the remuneration was to compensate a physician for bona fide services provided.

The decision represents an important confirmation of the decades-old “one purpose” standard and reiterates the need for vigilance when drafting agreements with healthcare professionals. When coupled with the provisions of Section 6402(f) of the Patient Protection and Affordable Care Act of 2010, which eliminates the requirement to demonstrate specific intent to violate the AKS, proactive analysis as to AKS compliance becomes even more important.

Background

Appellant Ronald Borrasi, a medical doctor, owned a group of healthcare providers in Illinois called Integrated Health Centers (Integrated) and had affiliations with various nursing homes. As the owner of Integrated, Borrasi became acquainted with several officers and directors of the Rock Creek Center (Rock Creek), a licensed inpatient psychiatric hospital also in Illinois. In Borrasi, the government alleged that Borrasi conspired with the Rock Creek executives to pay bribes to Borrasi and other clinicians at Integrated in exchange for increased Medicare beneficiary referrals to Rock Creek.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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