The Eleventh Circuit upheld anti-kickback convictions for per-patient payments made to two Florida Department of Health and Rehabilitative Services employees for referring patients to a drug treatment program funded by Medicaid.
The court concluded that the HRS employees did not fit within the employee safe harbor because they were not providing “covered items or services” as required by the statute, but they were simply paid for referrals to the program.
In addition, they did not receive regular salary checks from the drug treatment program at their place of employment, but instead received checks clandestinely with false category codes or in cash in parking lots and other locations to avoid detection by co-workers.
The Fifth Circuit held that the evidence presented did not support defendant’s affirmative defense that the individuals were bona fide employees, because employer did not have sufficient control over the manner and means of the work performed by employees to characterize this as a bona fide employment relationship.
The court determined that there was no evidence that employees:
- received any training or direction about marketing;
- kept regular office hours;
- had offices; and
- the referral sources were not provided by the DME company.
Instead, the defendants relied on their personal and professional contacts to obtains referrals. Thus, the DME company did not have sufficient control over the manner and means of the work performed by defendants to amount to a bona fide employment relationship.