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From Health Law Daily, February 12, 2015

Certification of home health care on Medicare Form 485 is a ‘referral’

By Harold M. Bishop, J.D.

The conviction of a Chicago-area internal medicine specialist who referred some of his elderly patients to a home health care provider in exchange for cash kickbacks has been affirmed. The internist argued that he had not “referred” any patients to the home health care provider under the meaning of the federal Anti-Kickback Statute because there was no evidence that he actually steered his patients to the provider, but, instead, that they independently chose the provider on their own after he prescribed home health care for them. The district court found that even if the patients chose the home health provider on their own, the internist “referred” the patients to the provider when he certified or recertified on Medicare Form 485 that the patients needed care, that the care would be performed by the provider, and that the provider would be reimbursed by Medicare (U.S. v Patel, February 10, 2015, Flaum, J.).

Background. Dr. Kamal Patel (Patel) is a Chicago-area physician who commonly prescribed home health care services for his patients. After federal investigators learned that Patel had been receiving undisclosed payments from Grand Home Health Care (Grand), a home care provider used by some of his patients, Patel was charged with six counts of violating, and one count of conspiring to violate, the Anti-Kickback Statute (Soc. Sec. Act 1128B(b)(1)).

Grand’s owners approached Patel, offering to pay him for referrals on a per patient basis. Patel disputed that he had verbally agreed to the arrangement, but the district court found this irrelevant as he later accepted payments from Grand’s owners.

When Patel prescribed home health care for his patients, his medical assistant gave patients an array of brochures from a variety of home health care providers, including Grand. Patel never directed his patients to Grand. Nevertheless, for Grand to be reimbursed from Medicare, it had to complete and submit Medicare Form 485 to CMS for each patient, which required Patel’s signature certifying that the patients needed home health care. Patel also needed to recertify on Form 485 that the patients still needed home care if the care lasted longer than 60-days. The owners of Grand paid Patel $400 for each new patient to Grand (certification) and $300 for each recertification.

The district court found Patel guilty of six counts of violating the Anti-Kickback Statute and one count of conspiracy to violate the statute (see Physician accepted thousands of dollars for home health referrals, February 21, 2014). Patel was sentenced to eight months in prison, 200 hours of community service, and forfeiture of $31,900 in kickback payments. Patel appealed his conviction.

Appeal. On appeal, Patel argued that, in the context of the Anti-Kickback Statute, the word “refer” means to personally recommend to a patient that he seek care from a particular entity. Therefore, because there was no evidence that he ever urged any of his patients to use Grand, he claimed that he cannot be guilty of violating the statute.

The Seventh Circuit, however, agreed with the district court’s interpretation, that “refer” includes not only a physician’s recommendation of a provider, but also a physician’s authorization of care. To reach its agreement with the district court, the Seventh Circuit considered the statute’s main purpose, and was convinced that Congress intended to criminalize the receipt of kickbacks in return for a physician’s certification or recertification, through a signed Medicare Form 485, that a patient requires Medicare-reimbursed care.

Patel further argued that even if he “referred” his patients to Grand when he signed their Form 485s, there was insufficient evidence to show that he received cash from Grand in return for signing the forms. Rather, Patel argued, Grand paid him cash to get him to recommend to his patients that they choose Grand as their home health care provider, not to get him to sign the forms. In other words, Patel claims that he was paid for one type of referral (a recommendation), but gave Grand a different type of referral (a certification), and therefore he was not paid in return for the referral he actually gave.

The Seventh Circuit decided that because the payments were literally exchanged for these signatures and the payment amount was calculated based on the number and type of Patel’s authorizations, a reasonable fact finder could have concluded that the payments were made in return for the signatures. More importantly, the court found the fact that Patel was paid for recertifications strongly suggested that Grand was paying him for his signatures, not for patient recommendations.

The case is No. 14-2607.

Attorneys: Joseph H. Thompson, Office of the U.S. Attorney, for United States of America. Scott R. Lassar (Sidley Austin LLP) for Kamal Patel.

Companies: Grand Home Health Care

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