Physician Certification of Home Health Patients For Remuneration Found to be “Referral” and Violation of Anti-Kickback Statute

On February 10, 2015, in the case of United States v. Patel, the Seventh Circuit Court of Appeals affirmed the judgment of the District Court which found Dr. Kamal Patel, an internal medicine specialist, guilty of violating the Anti-Kickback Statute.  The case resulted from a federal investigation which revealed that Dr. Patel had received payments from Grand Home Health Care (“Grand”) for certifying and recertifying home care patients’ plans of care.

Dr. Patel’s argument on appeal was that the certification or recertification did not meet the definition of “referral” pursuant to the Anti-Kickback Statute, which states “whoever knowingly and willfully solicits or receives any remuneration (including any kickback, bribe or rebate) . . . in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program . . . shall be guilty of a felony . . . .”  The term “referring” is not defined by the Anti-Kickback Statute.

Dr. Patel based his argument on the fact that he gave patients the choice of home health care provider and the patients independently chose Grand.  Dr. Patel further argued that he did not recommend Grand.  The court held that the act of certification and recertification – or authorization of the care by the chosen provider – is a “referral” for purposes of the Anti-Kickback Statute because the physician was acting as a gatekeeper.  The court also considered the definition of “referral” in the Stark Self-Referral Prohibition which specifically includes certifying and recertifying the need for designated health services.

The court further noted that physicians were put on alert that such conduct was an illegal kickback in a Special Fraud Alert issued by the Department of Health and Human Services Office of Inspector General in 1995 which listed “[p]ayment of a fee to a physician for each plan of care certified by the physician on behalf of the home health agency” as a form of kickback.

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