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False Claims Act Insights - Are All Healthcare "Kickbacks" Subject to FCA Liability?

 
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Episode 10 | Are All Healthcare “Kickbacks” Subject to FCA Liability?

Host Jonathan Porter welcomes Georgia Deputy Attorney General Jim Mooney to the show to explore the intersection of the False Claims Act (FCA) and the federal Anti-Kickback Statute (AKS). Our discussion begins with an explanation of the enforcement framework at both the state and federal level and the purpose of the AKS. Jonathan and Jim then pivot to cover how the FCA and AKS can overlap in enforcement efforts and how kickbacks oftentimes operate as a predicate to FCA lawsuits.

Our conversation then considers recent and pending litigation that could help healthcare and pharmaceutical industry leaders manage exposure to FCA and AKS liability, including issues related to causation, which is a key link that joins the FCA to AKS-related violations.

Jonathan Porter | Full Biography

Jonathan focuses on white collar criminal defense, federal investigations brought under the False Claims Act, and litigation against the government and whistleblowers, where he uses his experience as a former federal prosecutor to guide clients in sensitive and enterprise-threatening litigation. At the Department of Justice, Jonathan earned a reputation as a top white collar prosecutor and trial lawyer and was a key member of multiple international healthcare fraud takedowns and high-profile financial crime prosecution teams. He serves as a vice chair of the American Health Law Association’s Fraud and Abuse Practice Group and teaches white collar crime as an adjunct professor of law at Mercer University School of Law.

Jim Mooney | Full Biography

Jim Mooney has served as Georgia’s Deputy Attorney General of the Medicaid Fraud Division since June 2023, overseeing criminal and civil enforcement efforts related to fraud committed upon the Georgia Medicaid program. He joined Georgia’s Office of the Attorney General in 2013 and has prosecuted criminal healthcare fraud matters at both the state and federal level, including multiple jury trials. He has served as a Special Assistant U.S. Attorney in all three of Georgia’s federal districts. Jim also has extensive experience investigating and litigating civil matters brought under the Georgia False Medicaid Claims Act. Immediately prior to his appointment as Deputy, he served as the Assistant Director of the Medicaid Fraud Division.

Read the Transcript

This transcript has been auto generated

00;00;01;08 - 00;00;22;18

Jonathan Porter

Welcome to another episode of Husch Blackwell's False Claims Act Insights podcast. I'm your host, Jonathan Porter. We've got a fascinating topic to discuss today, and I want to introduce it this way. A few months back in our episode on parallel proceedings, we talked about a bribery case where an active duty Army colonel pled guilty to accepting bribes from a defense contractor.

00;00;22;27 - 00;00;45;27

Jonathan Porter

He took the dollars in exchange for steering contracts. I think we get the concept of bribes. You know, government officials taking bribes. Their stories, bribes in sports. Shoeless Joe Jackson allegedly taking bribes to throw the 1919 World Series before officials allegedly taking bribes for steering the location of the World Cup. I think we get those types of bribes.

00;00;46;06 - 00;01;10;19

Jonathan Porter

You take money and then you do some action because of the money. But there's a similar and yet less straightforward concept that has a major impact on false claims ACT enforcement, and that's kickbacks enforced through the Anti-Kickback statute, the kickback statute. It does cover straight up bribes, but it also covers a lot more drug companies offering certain discounts to patients.

00;01;10;20 - 00;01;34;16

Jonathan Porter

Those could be kickbacks, doctors receiving paid trips to go to, you know, an educational conference. Those could be kickbacks. A few weeks ago, we talked about a recent False Claims Act trial where a pharmaceutical company lost on the theory that paying physicians to speak at conferences violated the kickback statute. Kickbacks are super complicated. There are safe harbors that apply in some situations.

00;01;34;17 - 00;02;06;01

Jonathan Porter

There are statutory exceptions and infuriatingly to me, there are OIG advisory opinions that approve of some kickbacks that they view to pose minimal risk of fraud or abuse, but that health care providers cannot rely on for similar situations. Kickbacks are fascinating to me. And kickback enforcement is fascinating to me. There are a couple of really important cases going on right now that are navigating through the appeals process and given the importance of those cases to kickback enforcement in general.

00;02;06;12 - 00;02;35;14

Jonathan Porter

We're going to spend today's episode talking about kickbacks. Joining me to talk about kickbacks is my good friend Jim Mooney. Jim is deputy attorney general for the state of Georgia and runs Georgia's Medicaid fraud division of the Georgia Attorney General's Office. Before his promotion to that post last year, Jim was assistant director of the Medicaid Fraud Division and actively investigated and litigated criminal and civil health care fraud cases, including a bunch of cases involving kickbacks.

00;02;35;21 - 00;02;55;19

Jonathan Porter

And that's how Jim and I became friends. So Jim and I had countless cases together, and I was always impressed by Jim's command of our cases and the law. And so when I thought about putting together an episode on, you know, cutting edge developments in kickback cases, I immediately thought of my friend Jim Mooney. So, Jim, thanks for coming on the podcast.

00;02;55;19 - 00;02;58;21

Jonathan Porter

Thanks for telling our listeners a little bit about kickbacks.

00;02;59;05 - 00;03;17;21

Jim Mooney

Yeah. Hey, Jonathan, thanks for the big introduction and I particularly appreciate you setting it up by talking about this official thriving international sporting event. And then segueing almost seamlessly to statutory interpretation and HHS advisory opinion. Thrilled to be here with you.

00;03;17;29 - 00;03;41;26

Jonathan Porter

It's all about framing, buddy. So before we get into the details of kickbacks in health care, there is a chance that some of our listeners are not familiar with Medicaid fraud units. So I was hoping that before we start getting into the substance of kickbacks, could you tell our listeners a little bit about your unit, about your job, and how that fits into the overall health care enforcement concept?

00;03;42;09 - 00;04;12;18

Jim Mooney

Yeah, absolutely. The easiest way to start it is to just really think about Medicaid fraud control unit as state analogs, the U.S. attorney's offices and HHS. OIG, where Medicare and TRICARE and plenty of other programs are all federal dollars. Medicaid is a joint collaboration between the state and the federal government. As a result of that. Federal government gave all the states an incentive to get involved in the health care fraud enforcement space.

00;04;12;22 - 00;04;44;23

Jim Mooney

That was by making it part of a state Medicaid plan to have what's called a Medicaid fraud control unit. They take various forms. They take various arrays of disciplines. But the net result is most of them are within the state attorney general's office. Typically, you get we've got attorneys and investigators as well as other supporting personnel, such as auditors that really know how to deal with claims that and financial records and maybe some specialized investigators as well.

00;04;44;23 - 00;05;10;12

Jim Mooney

Where we sit in is we're there to specifically look at issues that are impacting the state Medicaid programs. It's pretty common for us to interact with folks like yourself when you were at the US Attorney's Office. Department of Justice, HHS, OIG, FBI, DCI at all of the various letters we get involved with and we have our own Matthew or Matthew.

00;05;11;06 - 00;05;32;22

Jonathan Porter

Got it. Thanks, Jim. I appreciate the acronyms. You can't do health care enforcement without referring to all the acronyms, all the letters. So thanks for that. So, Jim, in a lot of industries, money in exchange for referrals is common. Bribes like in FIFA, not common bad frowned upon. But you know, money in exchange for referrals is common in a lot of other industries.

00;05;32;22 - 00;06;02;24

Jonathan Porter

So I searched around for recorded. I found that there were banks, car companies, clothing companies, tax software companies. And of course, your fill in the blank big box cable TV company. They're all offering people money if they refer future customers to their company. But that's sort of arrangement is not okay in health care. Jim, why is that? What's the hang up in health care and what's the purpose of the Anti-Kickback statute generally term.

00;06;02;24 - 00;06;27;10

Jim Mooney

Meaning you have to start with the most logical place and that the reason it's illegal is that Congress would benefit. And that really is one of the fundamental differences is that Congress passed a statute specific to programs that include public dollars. So one of the things to remember is that the federal and I take back statute that we're really talking about has to have that nexus, the public, federal dollars.

00;06;27;25 - 00;07;17;12

Jim Mooney

There are certainly other enforcement mechanisms in other areas that might come into play. But when we're talking about kickbacks, that's what we're really getting at. The basis for wanting to have any take back statute was at its heart a fear that financial incentives can impact medical judgment. So the kickback statute was passed in large part to try to ensure that those making decisions about what services, what products are delivered to the recipients of federal health care dollars are making that judgment based off of what is best for the individual, rather than because they have a particular financial relationship with some third party connected to that.

00;07;17;20 - 00;07;50;28

Jim Mooney

And you certainly can't divorce it from. The notion of what's best for the patient is an overall concern with safeguarding federal health care dollars and ensuring that there's not an overutilization. As we all know, certain products, certain services are more expensive in the health care industry than others. So they're related concern is that services that happen to be more expensive and by virtue of being more expensive, are going to cause more tax dollars to be spent.

00;07;50;28 - 00;08;14;17

Jim Mooney

That's going to drive up the cost of our federally funded program. They want to ensure that those decisions are similarly being made because it's what's best for the patient and not because it's driving business or because of a third party relationship. So at the end of the day, that's why the anti kickback statute is there. Those are kind of the articulated goals and reasons that we have and.

00;08;14;29 - 00;08;15;09

Jim Mooney

Yeah.

00;08;15;19 - 00;08;45;08

Jonathan Porter

Thanks, Jim. Yeah, that makes perfect sense to me. What I think of health care. You're dealing with federal dollars. Patients aren't paying for stuff in the same way. And so the concerns of doctors, you know, sort of abdicating their their oath to treating patients. Yeah, there's a lot of concern there that if they're getting dollars from non payers then there's a lot of concern there that all of a sudden they're gonna start doing crazy stuff and those are concerns that aren't necessarily there for your cable TV company where you know, there's not these other concerns.

00;08;45;13 - 00;09;07;24

Jonathan Porter

You know, a couple weeks ago John Oliver on HBO talked about the hospice industry and during that episode, he played video, which I hadn't seen before, of a doctors undercover FBI video. I think talking about how. Yeah, hey, I can go to this hospital over here and get paid 250 bucks per referral and just trying to like negotiate, you know, where am I sending my hospice referrals?

00;09;08;02 - 00;09;38;00

Jonathan Porter

That's criminal conduct. That's why I think the Anti-Kickback statute exists is the ability for physicians to go around and shop, you know, where are my patients going to go? Not thinking, where are they going to go? Get the best treatment, but who's going to pay me the most money? That's why the hand and kickbacks statute exists. It's really I mean, at his core, I know a lot of people get frustrated with it on the margin, but at its courts doing the right thing, which is making sure that physicians are doing what they should be doing in the best interest of patients and not in the best interest of who's going to pay them the most

00;09;38;00 - 00;09;54;03

Jonathan Porter

money. So that, I think, is is the anarchy back statute in a nutshell, designed to protect those things. But, you know, it's interesting. I've got I've got a lot of clients who ask me now that I'm on this defense side. I've talked to clients about all these all these things. And one of the things that they talk about is, hey, this is a criminal statute.

00;09;54;03 - 00;10;09;17

Jonathan Porter

Why is why am I under investigation civilly for this criminal statute? So maybe, Jim, could you tell our listeners a little bit, how does the kickback statute play with the False Claims Act? Is it a predicate to the false claims? How do those two statutes fit together?

00;10;10;05 - 00;10;28;06

Jim Mooney

Yeah, and I think you're right is when you talk about and I the statute on its own, it is a criminal statute and it really is driven at the types of contact that you are providing in your example of the physician who literally saying, I can get paid by this particular provider if I bring my patients over there.

00;10;28;06 - 00;10;49;14

Jim Mooney

And I think that when you and I were working a lot together, those are the exact type of relationships we were looking at, you know, really out there, really obvious, really disconnected from health care and all about making money. So how it relates between the False Claims Act and the AKS is you got to kind of think about it is a Venn diagram.

00;10;49;21 - 00;11;14;27

Jim Mooney

There are certain things that are going to be violations of the False Claims Act that don't have any overlap with the Anti-Kickback statute, vise versa. If you have conduct that is covered by the anti-kickback statute that may not give rise to false claims act liability. So for instance, the anti-kickback statute, at least parts of it, are really designed at the actual offer of remuneration or payment or money.

00;11;14;27 - 00;11;46;23

Jim Mooney

You know, remuneration is a very broad word in this context and it can take a lot of different forms, but it's really geared at that particular offer. So for instance, you can in theory have a kickback violation that doesn't actually result in a claim being committed to a federal program. And that case you could, in theory, have a criminal prosecution for somebody that has violated the intent anti-kickback statute where there may not be liability under the FCA because no claim was ever submitted.

00;11;47;02 - 00;12;13;03

Jim Mooney

On the other side, obviously the federal claims that covers more than just the health care industry anti-kickback statute is really geared only at the health care industry. So the FDA is going to be plenty of courses of action that have nothing to do with the Anti-Kickback statute and even within the healthcare space, there's plenty of ways that you may have a false claim for purposes of the FDA that don't involve kickback violation.

00;12;13;12 - 00;12;37;04

Jim Mooney

But I think we're all familiar. If you work in this space long enough, you probably know that one of the largest areas in enforcement under the false claims that are still violations of the Anti-Kickback statute. So they've come to be hand-in-hand. It's nothing new violations of the Anti-Kickback statute for quite a while have been enforced under the False Claims Act.

00;12;37;15 - 00;12;59;07

Jim Mooney

And that's because the Anti-Kickback statute, because in its place is in the enforcement framework and because of the criminal statute, has been viewed as a material condition of payment for federal health care payers. So if you have claims that are tainted by these types of arrangements, the theory's always been that you also have a violation of the false claims act.

00;12;59;26 - 00;13;27;12

Jim Mooney

And then in 2010, Congress tried to make it even a little bit more explicit. And I know we've got some things to discuss on that coming here, but they tried to make it more explicit that when you have claims that are violations by Anti-Kickback statute, that they are in fact violations of the False Claims Act. There's some special words in there that I know we're going to talk about here that have made that a bit more confusing, but that's kind of the general overlap.

00;13;27;24 - 00;13;44;05

Jonathan Porter

Yeah, perfect segue. Well, let's talk about that and I love that you use the word tainted in explaining is because that's the way it's always been done. You know, we'll see if that's the continued approach after these cases are decided. But let's just talk about by the like Venn diagram. Perfect way of illustrating that. I appreciate I love a good Venn diagram.

00;13;44;12 - 00;14;04;07

Jonathan Porter

So there's this big appeal in the First Circuit. That's what you're talking about. It's the Regeneron case. And I think there's a related case as well that went to the other way within the district, Massachusetts. But very briefly, Regeneron is a drug company that allegedly subsidized drug costs in a way that the Justice Department claims violated the Anti-Kickback statute.

00;14;04;18 - 00;14;28;26

Jonathan Porter

But the drug company had some success convincing the district court that because the kickbacks didn't cause false claims, the government didn't have an actionable false claims that case. So, Jim, impossible question for you and you may have a disclaimer here that you got to do before you answer this question, but here's the impossible question. After this disclaimer, can you explain the kickback causation issue in Regeneron in a way that our listeners can understand?

00;14;29;05 - 00;14;31;29

Jonathan Porter

There's a hard ask of you, Jim, but I know you can do it. What you got?

00;14;32;01 - 00;14;36;25

Jim Mooney

So if I just say no here, that I can't say that that's an inappropriate response.

00;14;37;05 - 00;14;37;19

Jonathan Porter

Correct?

00;14;38;06 - 00;15;03;27

Jim Mooney

Okay. Well, yeah, let me first get my disclaimer. Obviously, I'm still with the government right now with the state of Georgia. We're familiar with litigation. We're name parties in it. So I just need to make the clarification that my appearance here today is not supposed to be construed as the particular position of the state of Georgia. I'm not trying to advertise what I think we may or may not do in this particular litigation.

00;15;03;27 - 00;15;26;27

Jim Mooney

But it's an interesting issue, and I think it's going to come up not only in this appeal, but in a variety of other contexts. So to try to get to the heart of the issue, what you had is a scenario where Regeneron was paying money into a fund that effectively helped patients pay their copayments for a particular drug.

00;15;28;00 - 00;15;54;03

Jim Mooney

And the two parties were more or less in a dispute about the causation element of a violation of the Anti-Kickback statute versus false claims that liability. And you almost have to set aside all of the things about whether or not this constitutes remuneration and whether or not you've kind of got this other element because there's a really particular issue that the First Circuit is being asked to look at.

00;15;54;29 - 00;16;19;26

Jim Mooney

And we kind of talked about it a few minutes ago, that in 2010, Congress passed 42 USC, basically a statute. I'm not going to go through that whole that will be boring. And I realize that that would do that myself. But they basically added on a subsection that claims that result from a violation of the Anti-Kickback statute are violations of the false claims Act.

00;16;20;09 - 00;16;52;27

Jim Mooney

And the entire debate seems to be about what it needs to result from. And this is where the circuit split happens, is whether or not you've got to have. But for causation or whether it's sufficient. And that's what we're trying to paint or what has sometimes been called sufficient causal connection. So at the end of the day is if the government that you have submitted a false claim because it resulted from an anti kickback statute violation, do you have to show that absent the kickback, there wouldn't have been a claim submitted?

00;16;53;03 - 00;17;40;17

Jim Mooney

And that can be a really difficult standard to meet and that's kind of what they're there going back and forth about. And you are really wading into the lawyer land here because the the circuit split and what is going to be discussed in the appeal is about statutory construction in plain meaning of statute versus legislative intent. And if you read the government brief compared to the Italy brief, that's exactly what they're arguing about is when do you go in to legislative intent versus what do you deal with as plain meaning, the argument being that result from language is more or less common law version we've got to have, but for causation.

00;17;40;17 - 00;17;52;25

Jim Mooney

So if the government can't show affirmatively that the claim wouldn't have been made, but for the anti-kickback statute violation that they would and that's what they're dealing with on the AP.

00;17;53;07 - 00;18;11;28

Jonathan Porter

Yeah. So first of all, job well done. I didn't think you could do that, but that was that was actually so much better that I could have. That's a great way of explaining that. So admittedly, I don't think there's anything in the legislative history that says that Congress was trying to change anything in the Affordable Care Act when they included that resulting from language.

00;18;12;07 - 00;18;45;29

Jonathan Porter

Yet nothing suggests that Congress says, hey, this is tainted theory. Let's do away with that. Nothing like that. So the question is, though, there is a Supreme Court precedent that says that phrase results from or resulting from Bean's blood for causation. And that gets really, really sticky because but for causation, it's really hard to prove. I know that when I was on your side of the beat, I thought very long and hard about what that means, because, you know, think about a doctor who prescribes a certain drug for all of her patients and then gets a bunch of cash and continues to prescribe drugs for all of her patients.

00;18;46;08 - 00;19;04;05

Jonathan Porter

Did the cash cause the continued action? That's a really hard thing under the old version of the law. Under the government's reading in Regeneron, that's still actionable under HHS. I don't know about that. I think a jury would have a hard time saying whether that means but for causation on the other way, I'd argue that it does not.

00;19;04;22 - 00;19;33;26

Jonathan Porter

So that's a big appeal pending in the First Circuit. I think everyone in our world, Jim, is going to continue to watch that and we'll do the same. So pivoting a little bit here, Jim, one of the most fascinating aspects to me of the Anti-Kickback statute is that it can only be violated with a certain mindset. The term in lawyerly world is willfully and apparently there is a growing dispute about exactly what it means to act willfully.

00;19;34;14 - 00;19;51;11

Jonathan Porter

So some may hear that word and think that willful means to intend to do something as opposed to doing something by accident or without realizing that you're doing it. But it actually means something more than that. I went back and I pulled up the trial transcript from a health care fraud case that I had with when I was at DOJ.

00;19;51;11 - 00;20;17;29

Jonathan Porter

And I saw that my federal judge told the jury, that willfully means to do something voluntarily and purposefully with the intent to do something that the law forbids. That is what a bad purpose to disobey or disregard the law. That definition appears to be under attack in the highest court in our land. The U.S. Supreme Court, where a relator is sought review of a case called the United States actual heart B McKesson.

00;20;17;29 - 00;20;26;26

Jonathan Porter

So, Jim, tell our listeners what willfully, really means and why the Supreme Court is being asked to weigh in on on this concept.

00;20;27;05 - 00;20;46;23

Jim Mooney

Yeah, I mean, and I think that was the case from the 11th Circuit down here, which, you know, this is another thing where we've got a circuit split. So these words that arise in causation and intent and we're seeing a challenge a lot more. I mean, especially with the Supreme Court and especially we in our area of the world.

00;20;46;23 - 00;21;08;29

Jim Mooney

I mean, you know, RU on under Title 21 and then we had SUPERVALU last year, these types of terms are getting challenged to try to figure out and try to come to some sort of consensus about what they mean. So when you were talking about having to have a purpose to do something which the law forbids, I'm in Georgia, which is the 11th Circuit.

00;21;08;29 - 00;21;39;08

Jim Mooney

It's a definition that I'm used to. What happened in part is you had the Second Circuit more or less agree that they more or less kind of come on board and said, yeah, we like this 11th Circuit interpretation. The problem is, and it's what you alluded to leading into it, is that other circuits have taken the opposite tack where they've really viewed will we be we to two things you mentioned where it willfully is either that the actions you took, you did with purpose.

00;21;39;08 - 00;22;06;17

Jim Mooney

In other words, you didn't do it by mistake or accident or there's kind of this intermediate one, right, where willfully means that you're doing something that you know is wrong, but not necessarily unlawful. So it's not as tethered to the idea of a legal duty or responsibility. And so that's what the Supreme Court and so hard filed their petition for review.

00;22;07;05 - 00;22;28;04

Jim Mooney

The Supreme Court now asked the defendant to weigh in on whether or not they should accept the petition or not, which is certainly signaling some sort of interest by them that they might be interested in taking up this issue. And I think it's really to deal with that. It is. What does it mean to be willful and do you have to know that you are doing something which the law forbids?

00;22;28;04 - 00;22;47;28

Jim Mooney

Or do you just have to know that you're performing something that's wrongful? It's going to be fascinating to watch them weigh in on it because, you know, the underlying conduct and horror is kind of a theory that for those of us on the government side, we're used to, which is they had a product that I think for everybody for these purposes is agreeing.

00;22;47;28 - 00;23;16;25

Jim Mooney

We're going to say, okay, this is a potential inducement. This was potentially something of value that was offered to providers and their staff received compliance training. And this is something we know about is that any good company has compliance training and the government will always ask for things like what do you do from a compliance perspective? And so you you find those things where they talk about the Anti-Kickback statute and you talk about whether or not folks are familiar with Anti-Kickback statute.

00;23;16;25 - 00;23;41;27

Jim Mooney

You say, well, you know about the Anti-Kickback statute and you offered something of value, then you had violated the Anti-Kickback statute, and the case probably falls into that gray area. That tends to be the point of litigation between the government and companies and clients all the time about, well, what happens if the company doesn't really think that this is actually something that is unlawful?

00;23;41;27 - 00;24;13;13

Jim Mooney

And that's kind of the question that the Supreme Court may be weighing in on or at least potentially weighing in on. You know, and I think when you look at it particularly in light of things like SUPERVALU and Rue on, you get into this idea of subjective knowledge and subjective intent. And so it's really a fascinating issue to see whether they take it up and it's what they articulated the standard for willfully, because the last few cycles they've been reflecting a bigger concern with the notion of subjective intent.

00;24;13;17 - 00;24;33;15

Jim Mooney

And so I think this is another opportunity for them to potentially put their stamp on our law in dealing with it from the subjective intent perspective. So when you ask me what will mean, you know, if I'm reading tea leaves, I'm starting to think, well, this is probably coming down yet against that subjective intent standard and what they knew and how they reacted to information in their possession.

00;24;34;07 - 00;24;58;01

Jonathan Porter

Yeah, thanks for that, Jim. That's a great analysis. And I agree with you. You know, I think you're reading the tea leaves correctly. You know, one of the things I think a lot of agents in health care are trained, hey, go look and see what's in their enrollment agreement. So when you sign up to become a registered with health care, to be a health care provider for Medicare or Medicaid, you're agreeing that you understand what the Anti-Kickback statute is.

00;24;58;01 - 00;25;18;17

Jonathan Porter

You're not going to, you know, pay or receive kickbacks. I mean, a lot of agents say, okay, well, you you signed an enrollment document saying that you understand this. Therefore, everything you do must be rule of law. I don't think that's the test. I think there's got to be more. You got to show something. And I can think of a number of ways that you and I showed willfulness when we were working together.

00;25;18;19 - 00;25;38;00

Jonathan Porter

There's a lot of a lot of ways to show willfulness, but I'm really interested to see if the Supreme Court grants cert in this heart case, because this could have a really, really big impact on in kickbacks to assure enforcement. So we're recording this by ten days after the respondents filed their brief. I like the responses and they initially said, No, we're good.

00;25;38;00 - 00;25;52;03

Jonathan Porter

We feel like we don't need to submit a brief in order to defend this in the Supreme Court like actually you do. Let's let's hear your let's hear your argument. And so when we're recording this, the Supreme Court hasn't said whether they'll grant cert or not. But this is regardless of whether they grant cert or not, this is because of the circuit split

00;25;52;03 - 00;26;13;24

Jonathan Porter

this is going to be a big deal. Yeah, well, I don't know that McKesson thinks that there's a circuit split, but we'll see where this goes. This is going to be really interesting to follow. So, Jim, last question for you. You've been very generous with your time. One of the things that I'm surprised by now that I've been in private practice for a bit is how nervous clients are about this statute.

00;26;14;09 - 00;26;28;18

Jonathan Porter

A lot of my clients come to me in a panic when they realize they just barely missed a safe harbor. And they want to know whether Jim Mooney is about to bust down my door with an arrest warrant. But I tell them that just because you're not in a safe harbor doesn't mean that you violated the Anti-Kickback statute.

00;26;28;20 - 00;27;00;02

Jonathan Porter

It's a willful statute. But I also tell them that the types of kickbacks that got my attention at DOJ were egregious selling patient data of selling dummy orders, selling lab tests, and then creating fake invoices, showing hourly marketing arrangements to hide the kickbacks. You know, this is egregious stuff that we worked on together, Jim. And so, Jim, I hope that you will close out this conversation by telling our listeners about what you see as the biggest priorities when it comes to HHS enforcement going forward.

00;27;00;11 - 00;27;05;12

Jonathan Porter

What types of kickback arrangements are you seeing and what's grabbing your attention from an enforcement lens.

00;27;05;27 - 00;27;26;11

Jim Mooney

In some way? The old remains the new I mean, what you're talking about is still going to always be the enforcement priorities, right? First and foremost, that's what anybody on the government enforcement side is looking for, is scenarios where there's just financial incentives all over the place and very little in regard. And we haven't really seen a slow down.

00;27;26;11 - 00;27;49;29

Jim Mooney

I mean, you mentioned things like labs and DME. We're still seeing labs and DME and you can do any sort of Internet search and find a lot of press releases on those issues. Still. You know, they can pivot a little bit. Maybe it'll be compound free and then it'll be back races and then it'll be something else. But those are still the things that are being focused on.

00;27;50;22 - 00;28;16;05

Jim Mooney

I think that's probably the area that is sticky is for everybody. I mean, it's sticky for the government, Becky, for folks that you're representing and it's probably the area that we're all wrestle with the most is an area where you have large marketing campaigns and there is a disconnect between how something is set up and how it occurs in practice.

00;28;16;15 - 00;28;42;16

Jim Mooney

And it strikes me that a lot of our longest running investigations and the things that take a long time to get through and almost assuredly take the companies and clients the most amount of time, are those an area because, you know, illegal illicit kickbacks are easy to see and it's just finding the actors in this circumstance. I think the ones that are tougher is when you can see that programs are almost assuredly set up with the assistance of attorneys.

00;28;42;24 - 00;29;11;12

Jim Mooney

But by the time they make it to the business people, by the time they make it to the down chain people that are on the ground, it day to day, you see variances between how something was set up and how it happens in practice. And so that to me is always the risk area is when you see and you can tell and it's exactly what you were talking about, what we would look for, we would ask for things like, show me your compliance program, show me your contract, and a lot of places are pretty good about having the correct papers in place.

00;29;11;18 - 00;29;26;24

Jim Mooney

But the question is, is what happens when the papers aren't? What happens in practice and then we're getting into all the questions that we've been talking about here between causation and intent. And those are the tough questions, the ones that will remain the tough questions going forward.

00;29;26;24 - 00;29;48;21

Jonathan Porter

Jim, thank you for that. That's really, really helpful. I hope our listeners got a lot out of that. Yeah, I think you're exactly right. The old school kickbacks are just being recycled in new ways and so that's great. Glad you guys are focusing on those egregious kickbacks. That's excellent. So, Jim, thanks for joining the podcast and telling our listeners about these really interesting, really important cases.

00;29;49;00 - 00;29;55;07

Jonathan Porter

Jim, I'm gonna put you on the spot and ask you to come back next year when we see some results in these appeals. Can I mark you down for that episode?

00;29;55;07 - 00;29;58;03

Jim Mooney

Jim Yeah, you bet. As long as you can still find it.

00;29;58;13 - 00;30;17;28

Jonathan Porter

Awesome. Thanks. You're the man. I'm grateful for our friendship. And as a Georgia taxpayer, I appreciate the work you're doing, but I reserve the right to retract that if we ever get locked in some sort of dispute that we can't resolve. Okay. So to conclude, you know, the hard part about kickbacks to me is that it's hard to draw the line between the type that we all know are illegal.

00;30;18;13 - 00;30;46;05

Jonathan Porter

And in the gray area of financial incentives, like I mentioned a few minutes ago when I was at DOJ, Jim and I prosecuted a bunch of cases together where marketers were straight up selling DME orders to DME companies for set prices or, you know, cases where marketers were selling lab tests to lash for set prices and then coming up with fake paperwork, showing hours spent marketing that they could show to the feds or to Jim's office if they ever got investigated, when in actuality they were just buying orders.

00;30;46;05 - 00;31;09;21

Jonathan Porter

That's the sort of thing that is a willful violation of the Anti-Kickback statute, buying and selling orders and then covering your tracks. But my goodness, there's a lot of gray area out there. There are a lot of financial aspects of the business of health care that can that you can make an argument for being an illegal kickback. I get a lot of calls from health care providers who say, hey, we're doing X, we're just outside of this safe harbor.

00;31;09;21 - 00;31;45;15

Jonathan Porter

How worried should we be? And those are tough conversations because what I think of as reasonable a reasonable business practice isn't always what a DOJ or Masuku attorneys going to think is reasonable. And moreover, what HHS, OIG has said in advisory opinions that particular financial arrangements that are literally violations of the kickback statute, but say that they would choose not to enforce because of minimal risk of fraud or abuse in the financial arrangement, to me complicates the analysis even more because again, I've seen less egregious kickbacks seized upon by DOJ.

00;31;45;15 - 00;32;07;19

Jonathan Porter

So these issues are hugely important for health care, which is, you know, 17 to 20% of the nation's economy. You'd hope to have something more concrete, but but you don't. This is the landscape we're in. And so we're going to continue to cover these issues on this podcast and elsewhere at Husch Blackwell. And so I hope you enjoyed this episode, this discussion of kickbacks.

00;32;07;19 - 00;32;25;10

Jonathan Porter

Subscribe however you're listening to this leave a review, tell your friends, we appreciate any way that you're going to get us on other people's radar, but thanks for listening to this episode. See you next time.

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