In virtually all other contexts, “items and services” are identified as separate and distinct concepts. See e.g., 42 U.S.C. § 1320a-7b(b), the antikickback statute. The CMPL, however, does not mention “items” at all.

Background of the Anti-Kickback Statute and the Proposed Safe Harbor Under the Federal anti-kickback statute, it is a crime to knowingly and willfully offer, pay, solicit, or receive remuneration in order to induce or reward the referral of business reimbursable under certain Federal health care programs, including Medicare and Medicaid. See 42 USC §1320a-7b(b). In addition to a handful of statutory exceptions to this prohibition, HHS' Office of Inspector General (OIG) has also promulgated a series of rules that describe various payment and business practices that the Federal government will not treat as criminal offenses (the “safe harbor” provisions).

Some commercial insurers reimburse providers for in-home assessments, at a rate of $85 to $100, but Medicare does not. In the Advisory Opinion, the OIG first states that such a practice could violate 1) 42 U.S.C. §1320a-7a(a)(5), which prohibits the provision of anything of value to a Medicare or Medicaid beneficiary that the provider knows or should know is likely to influence the beneficiary's selection of a particular provider, practitioner or supplier of any item or service that Medicare or Medicaid may pay for; and 2) 42 U.S.C. §1320a-7b(b), which makes it a criminal offense to knowingly and willfully offer, pay, solicit or receive any remuneration to induce or reward referrals of items or services that are reimbursable by a federal health care program. Civil monetary penalties and administrative sanctions could also be imposed for such violations, respectively.

A felony guilty plea in June 3003 followed along with a $92.4 million payment. Kickbacks and False Claims Act Government enforcers are also pursuing kickback allegations, under both the federal health program anti-kickback law, 42 U.S.C. § 1320a-7b(b) and the separate Public Contracts Anti-Kickback Act, 41 U.S.C. § 52, in conjunction with False Claims Act theories. Gibson noted USA ex rel. Schmidt v. Zimmer, 386 F.2d 253, where the qui tam plaintiff under the False Claims Act challenged undisclosed incentive payments to a group purchasing organization, where payments flowed through to physicians and hospital orthopedic departments from the GPO if they helped meet sales targets.

Stryker Orthopedics, Inc., which according to the press release “cooperated with the U.S. Attorney’s Office before any other company,” entered into a non-prosecution agreement (“NPA”), but did not enter into any civil settlement agreement or CIA, and therefore, did not get a release from civil or administrative liability.All five companies have agreed to the appointment of federal monitors, who include former Attorney General John Ashcroft, and Debra Yang, the former U.S. Attorney for the Central District of California, whose investigation of Representative Jerry Lewis (R-CA), and somewhat abrupt departure from Gibson, Dunn & Crutcher LLP (the law firm representing Rep. Lewis), made headlines in connection with the U.S. Attorney firings earlier this spring.The criminal complaints, filed in connection with each of the four cases in which there is a DPA, allege conspiracy to violate the criminal anti-kickback statute, 42 U.S.C. § 1320a-7b(b)(2), in violation of the general criminal conspiracy statute, 18 U.S.C. § 371. It appears that the alleged conspiracy was between each company and surgeons as co-conspirators. There does not seem to be any allegation of inter-company conspiracy.

Health care entities and their counsel know all too well, however, that identifying and confirming any potential legal "obligation" to repay an overpayment in the health care regulatory scheme is not a simple task. While the government would assert otherwise, in our view certain statutory sources purported to support a "repayment obligation" are either not at all clear or are actually nothing of the sort (see, for example, 42 U.S.C. § 1320a-7b(a)(3), where statutory language defies rationality or reason in its elliptical description of the potential disclosure (not repayment) obligation of an "individual," or see the Stark Law's confusing statutory "refund" requirement -which certainly establishes an "obligation" to refund Stark-tainted payments - but not to the government - to the beneficiary. 42 U.S.C. § 1395nn(g)(2).

Finally, OIG concluded the proposed arrangement would have the potential to lower Medigap costs for the requesters' policyholders. Therefore, OIG found that the proposed arrangement would not constitute grounds for the imposition of civil monetary penalties under 42 U.S.C. 1320a-7a, and, while it could implicate the Anti-Kickback Statute, the arrangement would not result in civil monetary penalties or administrative sanctions under 42 U.S.C. 1320a-7b. Crosby v. BlueCross/Blue Shield of LouisianaNo. 08-693 (E.D. La. July 2, 2009)The District Court for the Eastern District of Louisiana dismissed all counts against Blue Cross/Blue Shield ("Blue Cross"), alleging arbitrary and capricious denial of claims for various dental procedures under plaintiff's ERISA group policy.

On May 4, 2011, the U.S. Court of Appeals for the Seventh Circuit joined four other Circuits in adopting a “one purpose test” for assessing the legality of payments under the federal health care criminal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b. The court held that if at least part of a hospital’s remuneration to a physician “was ‘intended to induce’ him to refer patients” to the hospital, “the statute was violated, even if the payments were also intended to compensate for professional services.”

A recent decision by the Seventh Circuit Court of Appeals upholding a physician’s criminal sentence is yet another reminder that health care providers and physicians must carefully structure their financial relationships to avoid running afoul of the Anti-Kickback Statute (42 U.S.C. § 1320a–7b et seq.). The Anti-Kickback Statute makes it a criminal offense for a provider to give “remuneration” to a physician in order to compensate the physician for past referrals or to induce future referrals of patients to the provider for items or services that are reimbursed, in whole or in part, by Medicare or Medicaid.

The decision also has significant implications under the Federal Anti-Kickback Statute (the AKS). Among other things, that statute prohibits manufacturers, under certain circumstances, from paying physicians to “recommend[ ]” items or services payable under a federally-funded healthcare program. 42 U.S.C. § 1320a–7b(b)(1)(B). The validity of any charges brought under this provision will likely be called into question to the extent that the “recommend[ations]” at issue constitute constitutionally protected speech.