A recent Eleventh Circuit opinion clarified the mens rea burden the Government must prove to establish criminal intent to violate the Federal Anti-Kickback Statute (“AKS”) for a recipient or payee of a kickback or bribe under 42 U.S.C. § 1320a-7b(b)(1), and affirmed a conviction against a healthcare provider. The opinion in United States v. Alap Shah held that erroneous jury instructions regarding the AKS were harmless, as the instructions required the Government prove more than the statute requires. The Shah opinion clarified that the AKS requires no proof of a defendant’s motivation for accepting an illegal payment, so long as he accepts the kickback knowingly and willfully.
the AKS requires no proof of a defendant’s motivation for accepting an illegal payment
The case involved a Georgia-based podiatrist (“Shah”) who participated in a kickback conspiracy involving prescriptions for compounded drugs, reimbursable by federal payors, in exchange for remuneration. The physician was recruited as a medical director for a company that compensated him on a monthly basis under what was found to be a sham medical director agreement. The Government brought evidence of text exchanges between Shah and the company owners discussing target numbers for prescriptions as well as reimbursement rates for different drugs as well as evidence that Shah failed to complete any medical director “duties” as required by the agreement. The monthly compensation paid to Shah was found by a jury to be in exchange for his prescription rates for costly compounded drugs rather than performance of actual medical director duties.
At trial, the judge instructed the jury that the physician was guilty of violating the AKS if just one of his motives for writing prescriptions was receiving remuneration, even it was not his sole purpose. The relevant jury instruction read as follows (emphasis added):
“To satisfy the second element of this offense, the Government does not have to prove that the defendant’s sole purpose in soliciting or receiving the remuneration or kickback was to obtain payment in return for the purchasing, leasing, ordering and arranging for, and recommending purchasing, leasing and ordering. Rather, the Government must only prove that obtaining payment in return for the purchasing, ordering or leasing was one of the defendant’s purposes in soliciting or receiving the remuneration or kickback.”
In reviewing the jury instructions, the Eleventh Circuit held that the AKS requires a showing that the defendant “knowingly and willfully” accepted payment in return for referrals, but does not require a the defendant’s motive for accepting the payment. The opinion contrasted its holding with the language in 42 U.S.C. § 1320a-7b(b)(2) where the statutory prohibition for offering or paying remuneration is “to induce such person” to refer, suggesting motive is critical for the offeree of payment. Accordingly, while the Circuit Court held that the trial court erred by instructing the jury that the government had to prove Shah accepted the payments at least in part because they were made in return for the prescriptions he wrote, since no such showing was necessary, in the absence of any harm to the defendant, the Circuit Court affirmed the trial court’s decision.
******
The physician in this case was convicted of one count of conspiring to receive health care kickbacks or defraud the United States, two counts of receiving kickbacks. He was sentenced to 36 months of incarceration on each count, to run concurrently, and ordered to pay $55,340 in restitution (approximately the amount he received under this charged conspiracy).
