Applying the Anti-Kickback Statute to Pursue Qui Tam Whistleblower Actions Under the Federal False Claims Act and the Delaware False Claims Act

Violations of the Anti-Kickback Statute Form the Basis of False Claims Act Liability

Congress has long viewed the elimination of kickbacks as central to any efforts to combat Medicare and Medicaid fraud and abuse.  United States v. Greber, 760 F.2d 68, 70-71 (3d. Cir. 1985).  Because kickback schemes negatively affect the integrity of federal health care programs, government payers have a strong interest in ensuring the continued viability of False Claims Act (“FCA”) actions to deter and redress health care fraud predicated upon kickbacks.  United States ex rel. Charles Wilkins and Daryl Willis v. United Health Group, Inc. et al., (3d Cir. Oct. 2010) (No. 10-2747) (Brief for the United States as Amicus Curie Supporting Appellant).

To protect against the erosion of patient care and patient safety, courts uniformly agree that compliance with the Anti-Kickback Statute (“AKS”) is a material condition of payment under the Medicare/Medicaid programs.[1]

These and other courts have held that a person or entity who violates the FCA and causes another to submit claims to the government has violated the FCA regardless of what form the claim or statement takes.  Many of these courts have reasoned that the claims are false, and thus violate the FCA, because there is a false certification – either express or implied – as to compliance with the AKS each time a claim is submitted.[2]

Moreover, the AKS was recently amended to expressly state what these courts had already held, namely, that a violation of the AKS constitutes a “false or fraudulent” claim under the FCA.  42 U.S.C. § 1320(a)-7b(g).

The Delaware Anti-Kickback Statute And Its Use In Qui Tam Actions Under The Delaware False Claims Act

The Delaware Anti-Kickback Statute (“DAKS”) makes it unlawful:

-to solicit or receive any kickback, rebate or bribe directly or indirectly, overtly or covertly, in cash or in kind “in return for referring an individual to a provider for the furnishing or arranging for the furnishing of any medical care or medical assistance for which payment may be made in whole or in part under any public assistance program. 31 Del. C. § 1005(a)(1);

-to offer or pay any remuneration (including any kickback, bribe or rebate) directly or indirectly, in cash or in kind to induce any other person “to refer an individual to a provider for the furnishing or arranging for the furnishing of any medical care or medical assistance for which payment may be made in whole or in part under any public assistance program. 31 Del. C. § 1005(b)(1); and

-for a provider to charge, solicit, accept or receive for any service provided to a recipient, money or other consideration in addition to or at a rate in excess of the rates established by the State for such item or service. 31 Del. C. § 1005(c)(1).

Thus, a health care provider such as a hospital violates the DAKS by offering remuneration and incentives, in various forms, to induce physicians to make referrals to the hospital for health services billed to Medicare and Medicaid. Similarly, physicians violate the DAKS by accepting remuneration in exchange for referrals.  As explained above, these underlying DAKS violations provide the foundation for false claims act liability under the Delaware FCA.

Conclusion

The AKS and the DAKS are broadly interpreted statutes which can form the foundation of liability for qui tam actions brought by whistleblowers under the Federal and Delaware false claims acts.

[1] See United States ex rel. Schmidt v. Zimmer, Inc., 386 F.3d 235, 243 (3d Cir. 2004); United States ex rel. Roberts v. Aging Care Home Health, 2007 U.S. Dist. LEXIS 92864, *11 (W.D. La. Dec. 17, 2007); United States ex rel. Thompson v. Columbia/HCA Healthcare Corp., 20 F.Supp.2d 1017, 1042 (S.D. Tex. 1998); United States ex rel. Conner v. Salina Regional Health Ctr., 543 F.3d 1211, 1223 n.8 (10th Cir. 2008); United States ex rel. McNutt v. Haleyville Medical Supplies, 423 F.3d 1256, 1259-1260 (11th Cir. 2005); and United States v. Rogan, 459 F. Supp. 2d 692, 717 (N.D. Ill. 2006), aff’d, 517 F.3d 449 (7th Cir. 2008).

[2] See, e.g., United States v. Rogan, 517 F.3d 449, 452 (7th Cir. 2008); United States ex rel. Roberts, 2007 U.S. Dist. LEXIS 92864, *11 (holding defendants both presented a false or fraudulent claim for payment and relied on a false or fraudulent statement or record to obtain payment from Medicare once Defendants obtained payment from Medicare for services “performed under a prohibited referral).  United States ex rel. Thompson v. Columbia/HCA Healthcare Corp., 125 F.3d 899, 902 (5th Cir.1997); United States ex rel. Schmidt v. Zimmer, Inc., 386 F.3d 235, 245 (3d Cir. 2004); Mason v. Medline Industries, Inc., 2010 WL 653542, at *5-9 (N.D. Ill. Feb. 18, 2010); United States v. ex rel. Jamison v. McKesson Corp., 2009 WL 3176168 (N.D. Miss. September 29, 2009); In re Pharmaceutical Indus. Average Wholesale Price Litig., 491 F. Supp. 2d 12, 17-18 (D. Mass. 2007); United States ex rel. Bidani v. Lewis, 264 F. Supp. 2d 612, 615-16; United States ex rel. Franklin v. Parke-Davis, 2003 WL 20048255 (D. Mass. August 22, 2003); United States ex rel. Pogue v. Diabetes Treatment Centers of America, 238 F. Supp. 2d 258, 264 (D.D.C. 2002); and United States ex rel. Bartlett v. Tyrone Hospital, Inc., 234 F.R.D. 113, 121 (W.D. Pa. 2001).