Moving Beyond Simple Conflict of essay

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The statute applies even where there is no actual government reimbursement.

The opportunity to invest in a "private-pay only" joint venture may, in some circumstances, constitute an inducement to physicians to refer patients to the joint venture partner for other services covered by governmental programs.

In general, violation of the statute is a two-way street

While it is theoretically possible for one person to violate the statute by offering a kickback to (or soliciting a kickback from) another person even where the other person refuses to play ball, one does not commonly see prosecutions based on that fact situation.

Where the requisite bad intent exists, an arrangement may violate the statute even where there are also legitimate purposes behind the arrangement.

Many claimed Anti-Kickback Statute violations arise from arrangements that may serve legitimate, socially useful purposes, such as providing healthcare services that might not otherwise be available in the local community; however, there are cases that hold that the statute is violated if even one purpose of an arrangement is to induce referrals or otherwise to engage in activities violative of the statute, even though there are other good purposes present. The "one purpose" test and its variations makes it important to note that an arrangement is not saved from violating the statute simply because the parties can articulate hypothetical (or even real) purposes behind the arrangement that do not violate the statute.

The statute is a criminal statute

While the government's enforcement arsenal under the Anti-

Kickback Statute includes civil and administrative sanctions, it should always be borne in mind that violation of the statute is a felony.

Source: Adapted from Hill & Horton, 2012

Question No. 3: "Did the physicians dishonor their fiduciary relationship with their patients? If so, how?

The so-called "referrals" being paid by Greber were clearly kickbacks that were intended to encourage further referrals in the future, rather than as a professional fee. In this regard, Davis (2011) advises that, "The most noteworthy subject of relevant case law is the scope of the Anti-Kickback Statute's scienter requirement" (para. 2). The definition of scienter provided by Black's Law Dictionary (1990) states that this term is used to indicate guilty knowledge. In the United States v. Greber case, the Court held that the defendant had such guilty knowledge concerning the intent of these fees. According to Davis (2011), "In United States v. Greber, the landmark case regarding the scope of the Anti-Kickback Statute, the U.S. Court of Appeals for the Third Circuit established the 'one purpose' test. Under the 'one purpose' test, 'if one purpose of the payment was to induce future referrals, the Medicare statute has been violated'" (para. 3). Likewise, Section 1128B (b) of the Social Security Act, 42 U.S.C. § 1320a-7b (b) (the "Anti-Kickback Statute"), stipulates the basic law the governs the financial relationships between persons or entities providing health care services that are eligible for payment under a federal healthcare program including Medicare or Medicaid and those who are in a position to refer or influence business to them are guilty of a felony if they:

1. Knowingly and willfully solicit or receive any remuneration (including any kickbacks, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind

(A) 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, or (B) in return for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under a Federal health care program (Hill & Horton, 2012).

Taken together, these findings suggest that the physicians participating in the "referral" scheme did in fact violate their fiduciary relationship with their patients.


Black's law dictionary. (1990). St. Paul, MN: West Publishing Co.

Davis, A. (2011, May 26). Anti-kickback statute. American Health Lawyers Association.

Retrieved from

Hill, J.R. & Horton, W.W. (2012). Hospital/physician ancillary services joint ventures: What's legal and what works. Retrieved from


The differences between a criminal case and a civil case. (2013). FindLaw. Retrieved from

U.S. v. Greber, 760 F.2d 68, 69 (3rd Cir. 1985), cert. denied, 474 U.S. 988 (1985).[continue]

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