Floyd Calhoun Dent, III v. United States, et al.

The Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b) (“AKS”), makes it a felony to “knowingly and willfully” offer, solicit, pay, or receive “any remuneration (including any kickback, bribe, or rebate)” in exchange for referring an individual for, or arranging or recommending, any item or service paid for by a federal healthcare program. The AKS is intended to promote cost savings and “protect patients from doctors whose medical judgments might be clouded by improper financial considerations.” United States v. Patel, 778 F.3d 607, 612 (7th Cir. 2015). In this case, independent contractors made sales presentations to physicians regarding specialized blood testing. Contractors provided general information and marketing materials but had no input or direct influence in a physician’s decision to refer a patient for testing. Nevertheless, the Fourth Circuit held that such routine marketing activities constituted “referring” patients for testing or “arranging or recommending” a referral, such that sales commissions paid to the contractors constituted prohibited “remuneration” under the AKS, even though exactly the same conduct would be legal if engaged in by employees and even though the Fifth Circuit reached a directly contrary conclusion on indistinguishable facts. See United States v. Miles, 360 F.3d 472 (5th Cir. 2004). The question presented is: Whether the AKS prohibits the payment of sales commissions to independent contractors who make marketing presentations to physicians but who are not medical professionals, have no