In United States v. Borrasi, the Seventh Circuit adopted the “one purpose” test under the federal Anti-Kickback Statute. The government’s position in the case is also important for its interpretation of the scope of the employee safe harbor. Borrasi and other recent developments reflect a narrow reading of the scope of safe harbor protection.

The U.S. Court of Appeals for the Seventh Circuit recently adopted the “one purpose” test under the federal health care criminal Anti-Kickback Statute, 42 U.S.C. § 1320-7b(b) in United States v. Borrasi, No. 09-4088 (7th Cir. May 4, 2011). (See Seventh Circuit Adopts “One Purpose Test” Under Federal Health Care Anti-Kickback Statute for more information.) The case is also important for its treatment of the statutory exception and regulatory safe harbor for bona fide employees, and reflects an increasingly crimped reading of the scope of the safe harbors generally. This trend may be of importance for hospital-physician integration strategies, which rely on the employee safe harbor, as well as other financial arrangements structured to comply with the safe harbors, such as so-called contractual joint ventures.