Seventh Circuit Rejects Narrow Reading of “Referring” to Uphold Conviction of Physician Receiving Kickbacks

February 13, 2015

On February 10, 2015, the Court of Appeals for the Seventh Circuit upheld the conviction of Kamal Patel, a Chicago-area physician, for violating the Anti-Kickback Statute, 42 U.S.C. §§1320a-7b. (U.S. v. Patel, Seventh Circuit Court of Appeals, No. 14-2607, February 10, 2015). Dr. Patel had been convicted after a bench trial for accepting cash payments for the referral of patients for home health care services. The Seventh Circuit’s central issue was the statutory construction of the term “referring.”

Dr. Patel argued that he never specifically directed his patients to choose Grand Home Health Care (“Grand”) as their provider for home health care services. Dr. Patel’s practice was to provide appropriate patients with brochures from several providers offering home health care. After the patient selected a home health care provider, Dr. Patel would complete the forms necessary for home health care and, if needed, would recertify the patient for home health care. If a patient selected Grand, Dr. Patel would meet with an agent of Grand to sign a certification or recertification. He received a cash payment for each new patient or recertification.

In his appeal, Dr. Patel argued that he could not be guilty under the Anti-Kickback Statute because he was never specifically “referring” any patients to Grand. Rather, Dr. Patel contended that he was only being paid after a patient had selected Grand. The Seventh Circuit rejected this narrow reading of the term “referring” as it failed to account for the gatekeeper function that physicians serve when authorizing a patient to receive care. The court held that “certifications and recertifications are ‘referrals’ under the Anti-Kickback Statute.” US v. Patel, No. 14-2607, *22).

The Court of Appeals added that an interpretation of “referring” to include Dr. Patel’s actions served the main purpose of the statute—to prevent kickbacks or other “improper financial considerations” from “clouding” or influencing the medical judgment of doctors. In support of its decision, the Seventh Circuit cited the Stark Act, which addresses referrals to entities in which the physician has a financial interest, and U.S. v. Vernon, 723 F.3d 1234 (11th Cir. 2013), which held that a physician received a kickback when paid for referring a patient even if it was not the initial referral of the patient. The Seventh Circuit’s decision reinforces an expansive definition of ”referring” under the Anti-Kickback Statute, one of the primary health care enforcement statutes.

For more information, please contact the co-authors of this alert, Jonathan Feld at 312-627-5680 (Chicago) or 202-906-8716 (Washington D.C.), or Wayne Creel at 312-627-5678, any of the attorneys listed on the left, or your relationship attorney.

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