11th Circuit Establishes Scienter Requirement for Violation of the Medicare/Medicaid Anti-Kickback S

In a recent case, the 11th Circuit Court of Appeals ruled that a person can be convicted of breaking the Medicare/Medicaid anti-kickback law if they knew their actions were illegal, even if they didn’t know they were specifically breaking that law. The law makes it illegal to offer or receive any kind of payment in exchange for referrals for healthcare services covered by government programs. Breaking this law can result in a fine, prison time, and being excluded from Medicare and Medicaid programs. And even without a criminal conviction, the Department of Health and Human Services can still exclude people from these programs for violating the law. The anti-kickback statute was originally created to stop people from giving or receiving money or gifts in exchange for referring patients to Medicare or Medicaid. Over the years, the law was changed to make it even stricter and to add exceptions for things like discounts and employment arrangements. The government also made it so that people had to knowingly and willfully break the law, and they gave the Department of Health and Human Services the power to make rules that say certain types of transactions are okay. Lastly, the law was changed so that the Department of Health and Human Services could give advice about whether a specific transaction breaks the law. The anti-kickback statute is a complex law that regulates the health care industry. HHS has issued “safe harbor” regulations to help companies follow the law. If a transaction fits within a “safe harbor,” it won’t be penalized under the statute. But if it doesn’t fit, it could still be okay depending on the specific situation. The law can be tricky because activities that are legal in other industries could be illegal in health care. The government must prove that someone knowingly or willfully violated the law, which can be a big factor in a legal case. Different courts have had different opinions on what these terms mean in relation to the law. In the case of Hanlester Network v. Shalala, the government accused a partnership and its partners of breaking the law by paying doctors to refer patients to their labs. But the court said the government had to prove that the partnership knew it was breaking the law when it made the payments. This means that the partnership couldn’t be found guilty unless they knew they were breaking the law when they did it. This set a high bar for proving guilt in cases like this. Two court decisions disagreed with a previous ruling and said that a lower level of intent was enough to break the law against giving kickbacks. In one case, a psychologist was paid by a hospital for marketing services, but the evidence showed he was really being paid for referring patients to the hospital. The psychologist said he didn’t know it was illegal to be paid for referrals, but the jury still found him guilty. The Eighth Circuit and Fifth Circuit both ruled that doctors could be convicted of violating the anti-kickback statute without knowing they were breaking that specific law. They said it was enough that the doctors knew their actions were wrong, even if they didn’t know about the law itself. The Jain and Davis courts required less proof of intent than the Hanlester court when it comes to violating the anti-kickback law. This means there was a disagreement among the courts on how much proof the government needs to show that someone broke the law. The question is whether the government needs to show that the person meant to break the law, or just that they knew their actions were against the law. Andrew Siegel, the president of a drug treatment program, paid two employees of a government agency to refer patients to his program. He and the two employees were convicted of breaking the law. On appeal, they argued that the government had to prove they knew their actions were illegal, but the court disagreed. Bryan was convicted of selling guns without a license. The jury didn’t have to prove that he knew about the specific law against it, just that he knew his actions were illegal. The Supreme Court agreed with the jury’s decision. They said that even though in some cases you have to know the law, in this case it wasn’t necessary because selling guns illegally is obvious. The 11th Circuit Court upheld the convictions of Starks and Siegel for breaking the law by taking kickbacks for medical referrals. They ruled that the government didn’t need to prove that Starks and Siegel knew they were breaking the law, because the activity was obviously illegal. This decision shows that when the facts of a case involve obvious criminal activity, the court is less likely to require proof of knowledge of the law. If the case had involved a more complex situation, the outcome might have been different. The anti-kickback statute is a complex law that Congress has made a priority to understand. The law can be difficult to navigate, and the consequences for breaking it are serious. A recent court decision in the 11th Circuit has made it easier for the government to prosecute people for violating this law, even if they didn’t intend to break it or didn’t know about it. This could lead to more prosecutions under this law in the future. In simple terms, the Florida Bar wants its members to understand their responsibilities to the public, make the justice system better, and improve the study of law.

Source: https://www.floridabar.org/the-florida-bar-journal/11th-circuit-establishes-scienter-requirement-for-violation-of-the-medicare-medicaid-anti-kickback-s/