Seventh Circuit Adopts “One Purpose Test” Under Federal Health Care Anti-Kickback Statute

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On May 4, 2011, the U.S. Court of Appeals for the Seventh Circuit joined four other Circuits in adopting a “one purpose test” for assessing the legality of payments under the federal health care criminal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b. The court held that if at least part of a hospital’s remuneration to a physician “was ‘intended to induce’ him to refer patients” to the hospital, “the statute was violated, even if the payments were also intended to compensate for professional services.” United States v. Borassi, No. 09-4088 (7th Cir. May 4, 2011) (quoting United States v. Greber, 760 F.2d 68, 72 (3d Cir. 1985)).

In United States v. Borassi, a medical doctor, after trial in a Chicago federal court, was convicted of violating 42 U.S.C. § 1320a-7b(b)(1) for accepting a salary from a hospital “in exchange for continually referring patients” to the hospital. The vast majority of payments received by the hospital came from Medicare.

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