Ketamine Clinic: What is a “recommendation” under the federal anti-kickback law?

Ketamine Clinic: What is a “recommendation” under the federal anti-kickback law?



in a Previous post, We discussed the federal anti-kickback regulations (“AKS”) and the impact on ketamine clinics. In short, the federal AKS prohibits anyone from paying or accepting anything of value for referrals to patients paid by the federal government’s health care payment program (for example, Medicare, Medicaid, VA, etc.). 42 USC § 1320a–7b. Although there are many safe harbors applicable to these situations, one of the basic questions is what constitutes a “referral” under the AKS?To help answer and clarify this question, in 2020, the Seventh Circuit Court of Appeals Stop Illinois Health Care Fraud, LLC v. Said (No. 12-cv-09306).


Stop Illinois Health Care Fraud, LLC (“Plaintiff”) Guitan For Management Principles, Inc. (“MPI”) and some of its affiliates, including its owner and manager Asif Sayeed, MD (“Dr. Sayeed”) and the Illinois Health Care Alliance (“HCI”), as well as its relationship with MPI and Sayeed Together with the doctor, the “defendant”). The plaintiff claimed that the defendant’s illegal referral violated the AKS and implied that it violated the Federal and State False Claims Act (“FCA”). The Federal District Court found no violation of the above regulations after a trial.

HCI is an organization that has a contract with the Illinois Department of Aging Affairs to coordinate services for low-income seniors, keeping them at home and away from nursing homes. HCI sometimes recommends customers who need on-site service to two companies under MPI. The plaintiff filed a claim based on the state and federal FCA.Neither the U.S. nor Illinois intervened in this matter Guitan Litigation, so the plaintiff sued the matter.

Important facts include:

The operational complaint stated that MPI and HCI had signed a contract, and MPI paid HCI a large number of gift cards in exchange for the detailed information about customers collected by HCI employees during the home assessment. Using this information, MPI calls Medicare-eligible seniors and provides them with the services of its two home healthcare companies.The complaint alleges that the payment MPI to HCI violated [AKS].


Most trial testimony was focused on… the 2010 management service agreement [(“MSA”)] MPI pays $5,000 to HCI every month. What HCI pays MPI to do is a topic of much discussion, because [MSA] It is very vague in itself. The only obligation stipulated by HCI is “to assist MPI in managing the case management plan and appoint personnel as deputy managers.” As far as HCI’s deputy managers are concerned, they must “[d]Allow sufficient time to perform all assigned responsibilities” and “[p]Provide regular written activity reports. ” This [P]The theory put forward by the plaintiff in the opening statement is ambiguous [MSA] It is a false contract designed to disguise the rebate provided for patient referrals.

Dr. Sayeed further testified that the origin of MSA is because HCI needs financial help, and MPI is trying to become a responsible medical organization, and it needs at least 5,000 medical insurance recipients as patients.

According to MSA, HCI needs to do two things: (1) allow MPI to access comprehensive forms that caseworkers fill out when assessing clients, and (2) teach MPI how to coordinate care. Dr. Sayeed’s testimony indicated that his company did use information obtained from HCI documents to recruit and acquire new patients. Dr. Sayeed refers to the review of HCI records as “data mining.”

After the trial, the court of first instance issued a short written order that the plaintiff had failed to fulfill its burden of proof. The order did not specify many major issues in dispute, and therefore left many unresolved issues for the Court of Appeal.

Analysis by the Court of Appeal

Ultimately, the Court of Appeal must determine the meaning of “referral” under the federal AKS. The plaintiff argued that MPI’s payment under the MSA was designed to ensure access to customer information in the HCI file, which was then used to make a request call. Therefore, the plaintiff claimed that this was actually a referral.

In the previous landmark decision of the Court of Appeals for the Seventh Circuit, U.S. v. Patel, 778 F.3d 607 (7th Cir. 2015), the court also dealt with the definition of “referral” under AKS.As the Court of Appeal from its Patel Decide:

We explained that the core feature of referrals is that doctors “facilitate[d] Or authorize[d]”The provider the patient chooses. The doctor stands between the patient and the provider he chooses because his approval is necessary to get the service, and”[e]Playing the role of this gatekeeper is a way for doctors to refer patients to specific providers. “In the summary, we observed that our holdings are consistent with the broad goals of Congress. [AKS] Prevent Medicare and Medicaid fraud and protect patient choices. (Omit internal references.)


Patel’s The belief that doctors “referral” patients to home healthcare providers when they approve patients for services does not directly control this situation. This involves not the gatekeeper but an organization without a certification body (here, HCI).Instead, the applicable lesson is that according to [AKS] It is broad and includes direct and indirect ways to connect patients with providers. It goes beyond clear recommendations to include more subtle arrangements. Inquiry is a kind of practical inquiry that focuses on substance rather than form.

The above content laid the foundation for the Court of Appeal’s ruling on this matter.The Court of Appeal inferred from the district court’s order (because the order is not very detailed), it may have adopted a narrower definition of referral, and Patel Keep.The appeal court stated that if the district court adopted Patel Standard, then this situation would be a dangerous choice.

In addition, the district court’s order did not mention evidence that MPI used access to HCI documents to recruit and obtain patients, although the testimony on this point was fairly clear and unequivocal. As the Court of Appeal pointed out, “[a] The actual analysis of this arrangement will allow, but may not be mandatory, and it is found that it is eligible as a recommendation. “Because of too much uncertainty, the appeal court overturned the district court’s order and sent it back for retrial.

Summary and lessons learned

The definition of “referral” is crucial in the healthcare sector. It may have an impact on the federal and state AKS and the federal and state FCA. Although this case is undoubtedly an unresolved case, it also helps illustrate how the court views this issue. Some of the more important lessons include:

  1. The MSA must clearly state and clearly define the responsibilities of each party. As the Court of Appeal pointed out, the relevant MSA is ambiguous. One party never wants a vague agreement, because it leads to questions about the interpretation and intentions of the parties involved.
  2. Whenever there is a question about AKS or any other federal fraud and abuse laws, one must question whether the arrangement violates or obstructs the purpose of those laws.The Court of Appeal stated, “We noticed that the [in Patel] Consistent with the broad goals of Congress [AKS] Prevent Medicare and Medicaid fraud and protect patient choices. “So, when reviewing these types of issues, always keep in mind the dual goals of federal fraud and abuse laws-(a) prevent overuse of health care services, and (b) prevent unnecessary services, both of which can lead to Bad federal government’s high-quality results and excessive costs.
  3. Any time an AKS violation occurs, FCA claims are almost taken for granted. They actually go hand in hand.
  4. To quote the Court of Appeal again, “The applicable lesson is that according to [AKS] It is broad and includes direct and indirect ways to connect patients with providers. It goes beyond clear recommendations to include more subtle arrangements. The survey is a practical survey that focuses on substance rather than form. “This is indeed the top priority of this case. The term “quoted” has a very broad meaning, and it is easy to overlook this issue. Of course, in this case, at first glance, it is difficult to see how this arrangement is “recommended” Arranged. However, after reviewing the appeal court’s grounds, the situation became clearer.

AKS is a criminal law with criminal penalties. Therefore, it is important to understand AKS and all its nuances-it is no easy task. Any ketamine clinic that is reimbursed by Medicare or any other federal health care plan needs to be aware of these issues to avoid criminal penalties (among other things).


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