On Feb.10, 2015, the U.S. Court of Appeals for the Seventh Circuit expanded the definition of “referral” under the Anti-Kickback Statute (AKS) by holding that a referral under the AKS is found when a provider authorizes a patient for specialist treatment even if the provider does not recommend a certain specialist.

In United States v. Patel (Case No. 14-2607), the Seventh Circuit affirmed the Northern District Court of Illinois’ ruling that Patel, an internist, violated the AKS when he received $400 cash for each original home health care certification and $300 for each recertification from the Grand Home Health Care when a patient decided to receive home health services from that company. Patel argued that he never recommended Grand Home Health Care to any patient and allowed them to choose freely from an array of home health companies. Additionally, it was undisputed that all of Patel’s patients were in need of home health services.

However, the Seventh Circuit determined that was not enough, holding that it does not matter who first identifies the provider. Patel acted as gatekeeper, and without his approval, his patients would not have been able to receive treatment from the home health company selected. Accordingly, the Seventh Circuit concurred with the government in that Congress designed the AKS to prevent providers from making referral certifications for federal health care program business in exchange for kickbacks instead of simply prohibiting recommendations of specific providers. The court concluded that an illegal referral “requires a doctor to do something that either directs a patient to a particular provider or allows the patient to receive care from that provider.”

This expansive definition of “referral” under the AKS may cause problems for many providers, as arrangements thought to be safe may actually implicate the AKS now. Accordingly, now is a good time for providers to re-evaluate any arrangements they have entered into where remuneration is given or received.