In adopting the regulation, HHS stated that the exception is based on an assumption that employers, who are responsible for the acts of their employees, will appropriately supervise those employees to prevent referrals of ineligible patients. When proposing the rule codified at 42 C.F.R. § 1001.952(i), HHS did not define "covered items or services," but, in discussing the bona fide employee safe harbor, it stated: This statutory exemption permits an employer to pay an employee in whatever manner he or she chooses for having that employee assist in the solicitation of Medicare or State health care program business. The proposed exemption follows the statute in that it applies only to bona fide employee-employer relationships. . . . [M]any commenters suggested that we broaden the exemption to apply to independent contractors paid on a commission basis.

The 15% Operating Margin Incentive Bonus payments still constituted illegal remuneration prohibited by the AKS, because the payments were derived from a bonus pool that was comprised of profits from the Oncologists’ referrals to Halifax Hospital’s outpatient services and not on the physicians’ “furnishing of any item or service for which payment may be made in whole or in part under Medicare.” 42 C.F.R. § 1001.952(i). All claims for goods and services provided pursuant to kickback-induced referrals from the Oncologists are false claims.

55. And because the FPS sales representatives were not W-2 employees of FPS, the “employees” safe harbor of 42 CFR § 1001.952(i) is also inapplicable. 56.

68. And because the Defendant was not a W-2 employee of FPS, the “employees” safe harbor of 42 CFR § 1001.952(i) is also inapplicable. Case 8:15-cv-01708-SDM-TGW Document 411 Filed 12/13/18 Page 16 of 22 PageID 2965 17 69.

69. And because the Defendant was not a W-2 employee of FPS, the “employees” safe harbor of 42 CFR § 1001.952(i) is also inapplicable. Case 8:15-cv-01708-SDM-TGW Document 412 Filed 12/13/18 Page 16 of 22 PageID 3127 17 70.

26. And because the Second Amended Complaint alleges that the Defendant is not a W-2 employee of FPS, the “employees” safe harbor of 42 CFR § 1001.952(i) is also inapplicable. See Second Amended Complaint, ¶ 190.

THE FOURTH AMENDED COMPLAINT DOES NOT STATE A VIOLATION OF THE ANTI-KICKBACK STATUTE. Based on the facts Denis alleges, Medco did not violate the Anti-Kickback Statute (“AKS”) because Medco’s purchase discount arrangement with AstraZeneca falls within the discount safe harbor. See 42 C.F.R. § 1001.952(h). And even if Denis were correct that the safe harbor does not cover the Medco-AstraZeneca relationship, Medco still did not violate the AKS. 3 If the Court determines that the 4AC is barred by the first-to-file rule, it should be dismissed without leave to amend “on the grounds of . . . futility[.]” Alston v. Parker, 363 F.3d 229, 236 (3d Cir. 2004). Although a first-to-file defect alone does not lead to dismissal with prejudice, see Kellogg Brown & Root Servs., Inc. v. U.S. ex rel. Carter, 135 S. Ct. 1970, 1978-79 (2015), for the reasons discussed above, an amended complaint cannot cure the defect in this case, and an entirely new complaint would be required.

While there are certain statutory exceptions and regulatory "safe harbors" to the AKS, none of them specifically concern whether a defendant was operating a purported "medication adherence" program. See 42 U.S.C. § 1320a-7b(3); 42 C.F.R. § 1001.952. As a result, none of Novartis' adherence requests have any bearing on whether Novartis violated the AKS and caused the submission of false claims.

42 U.S.C. § 1320a-7b(b)(3)(A). The corresponding discount safe harbor regulation at 42 C.F.R. § 1001.952(h)(4) makes clear that permissible discounts may take the form of rebates. The NPC Medications at Issue.

5, at 53 (1977); see also Medicare and State Health Care Programs: Fraud and Abuse; OIG Anti-Kickback Provisions, 56 Fed. Reg. 35,952, 35,977 (July 29, 1991) (this statutory exception “is intended to cover discounts and other price reductions offered by a seller . . . to induce a buyer to order or purchase goods (including items) or services”); Medicare and State Health Care Programs: Fraud and Abuse; Clarification of the Initial OIG Safe Harbor 1 The corresponding discount safe harbor regulation at 42 C.F.R. § 1001.952(h)(4) makes clear that a discount may take the form of a rebate. Case 1:11-cv-08196-CM-JCF Document 203 Filed 06/13/14 Page 13 of 29 8 Provision and Establishment of Additional Safe Harbor Provisions Under the Anti-Kickback Statute, 64 Fed Reg.