On May 4, 2011, the Seventh Circuit Court was faced with the issue of whether a doctor’s actions violated the anti-kickback statute (United States of America v. Borrasi). Dr. Roland Borrasi was convicted of Medicare fraud after he accepted payments in the form of a salary from a psychiatric hospital in exchange for referring patients to the facility. Over a time period of three years, Borrasi and four other physicians were paid a sum of $647,204 for referring hundreds of patients to the hospital.
In an effort to conceal these bribes, the physicians were placed on the hospital’s payroll, given false titles and job descriptions, and asked to submit false time sheets. Through testimonial evidence, the court found that the physicians were not expected to perform any duties listed in their job description. Moreover, the bribed physicians attended very few meetings, were rarely seen at the facility, and were not expected to perform any of their administrative duties. The facts of the case led the jury to find Borrasi guilty of Medicare-related bribery in violation of 42 U.S.C. § 1320a-7(b)(1).
On appeal, the Seventh Circuit denied Borrasi’s argument for interpreting the statute. Borrasi argued the court to adopt a “primary motivation” rule, where a defendant shall be found not guilty if the primary motivation behind the payments was to compensate for bona fide services provided. Instead, the court held that if part of the payment compensated past referrals or induced future referrals, that portion of the payment violates the statute. Therefore, so long as some amount of the payments made to Borrasi and the other physicians were made not pursuant to a bona fide employment relationship, then the statute has been violated.
Borrasi also argued that his sentencing should have been reduced because the district court did not properly calculate the value of the bribes. The court had given him credit for $150,000 for the services he had performed, but Borrasi argued that he deserved a larger credit. However, the Seventh Circuit upheld the district court’s quantitative findings because there was little evidence to show that this credit should have been valued higher. Moreover, there was other evidence that displayed Borrasi’s services to the hospital as being virtually nonexistent.
This case is a clear demonstration of the importance of ensuring that compensation arrangements with referral sources are bona fide and that services are actually provided, rather than just set forth on paper. If you have any questions regarding compliance with the anti-kickback statute or any other compliance issues, please contact a Wachler & Associates attorney at 248-544-0888.