The Northern District of Illinois just lately found that a house overall health treatment corporation violated the federal Anti-Kickback Statute (AKS) because the expenses it paid out to a local community treatment group for obtain to that company’s affected person facts constituted a prohibited referral. In Quit Illinois Wellbeing Care Fraud, LLC v. Asif Sayeed, et al. (No. 12-cv-09306) (Sayeed), the plaintiff alleged that Administration Principals, Inc. (MPI) violated the AKS, the federal False Promises Act, and the Illinois Wrong Promises Act, by spending Health care Consortium of Illinois (HCI) to give it information and facts about consumers that HCI had evaluated for eligibility for programs operate by the Illinois Section on Ageing so that MPI could then current market Medicare-reimbursed health care solutions to all those shoppers.
The AKS prohibits knowingly and willfully supplying remuneration in exchange for inducing or gratifying patient referrals or making business involving any item or service payable by federal health and fitness care systems, except an enumerated “safe harbor” provision applies. “Remuneration” is considered everything of benefit. The applicable protected harbor in Sayeed was for personal expert services and administration contracts. Less than that protected harbor, remuneration does not include things like any payment built by a principal to an agent as payment for the providers of the agent only if specific necessities are met.
Sayeed included an arrangement beneath which MPI paid out HCI $5,000 per month for 18 months in exchange for HCI’s administrative advice and counsel. On the other hand, an supplemental unwritten reason of the settlement was for HCI to give MPI accessibility to its information so that MPI could accomplish facts mining and solicit HCI clients for health treatment solutions, neither of which had been explicitly stated in the settlement. In addition, HCI continued to give MPI access to its clients’ data even right after the composed settlement was no for a longer period in influence.
At situation was irrespective of whether the arrangement was a prohibited referral arrangement less than the AKS. The plaintiff’s theory was that MPI’s payments below the agreement ended up intended to safe access to consumer information in the HCI data files. MPI argued that it never presented any cash or anything at all else of benefit straight for the goal of getting a referral. The Courtroom discovered that giving MPI access to shopper call info that was utilized to solicit individuals customers constituted a referral, albeit an indirect one particular. Pointing to Sayeed’s testimony that the $5,000 per thirty day period rate was intended, at least in aspect, for MPI’s obtain to HCI’s consumer information, the Court found that the service fees ended up partially intended as remuneration for a referral. Further, Sayeed’s testimony proved that he knowingly and willfully induced HCI to present referrals (i.e., access to facts) in exchange for the $5,000 regular payment. The Court docket rejected the defendants’ risk-free harbor affirmative protection due to the fact the agreement involving HCI and MPI failed to specify all of the services MPI supplied to HCI for the time period of the agreement.
Mainly because MPI’s accessibility to HCI’s facts constituted a referral and no safe and sound harbor applied, the Courtroom concluded that the service fees ended up supposed as remuneration for the referrals. The Court also found that the services furnished were funded by Medicare and the defendants’ inducement was being aware of and willful. Consequently, the arrangement was illegal.
Sayeed reinforces the technological fashion in which the AKS protected harbors are used. While sure types of preparations are authorized, the harmless harbors do not utilize except all of their specifications are fulfilled. If an arrangement is meant to drop inside the risk-free harbor allowing for for payment designed by a principal to an agent for the agent’s companies, the principal and the agent have to enter into a written settlement that evidently sets forth the expert services to be furnished by the agent. A service not specifically contemplated by the arrangement likely will outcome in liability beneath the AKS.