Physician Conviction for Accepting Home Health Care Referral Kickbacks Affirmed by Appeals Court
February 22, 2015 12:15 PM
Chicago based physician Dr. Kamal Patel was convicted in February 2014 for receiving kickbacks from a Medicare participating home health agency that paid him for each certification and recertification the physician signed. On February 10, 2015, the U.S. Court of Appeals for the Seventh Circuit affirmed the conviction. The case is United States of America vs. Kamal Patel, No. 14-2607.
Usually, NAHC Report does not include articles about fraud convictions because the conduct involved in those convictions, such as billing for services never rendered, is so obviously illegal. This conviction is different in that while most veterans in home health care would see the conduct as a clear violation of the antikickback laws, here the physician somehow believed otherwise. The facts are very simple: Dr. Patel received $400 for every signed certification and $300 for every signed recertification. Dr. Patel claimed as his defense that he did not “refer” the patients to the home health agency as the patients made that choice. The Court of Appeals disagreed, concluding that Patel violated the antikickback law by signing the 485 plan of care and certifications, an act the court determined was the equivalent of a referral.
Nearly 20 years ago, NAHC worked with the Office of Inspector General at the U.S. Department of Health and Human Services to compose a Special Fraud Alert as a form of warning to the home health community on the type of actions that would be considered fraudulent or violate the antikickback laws. Included in the laundry list of offenses was “[p]ayment of a fee to a physician for each plan of care certified by the physician on behalf of the home health agency.” Despite this direct guidance, Dr. Patel and the Grand Home Health Care agency somehow felt that they could technically avoid the grasp of the federal antikickback laws by paying for certifications rather than the physician’s recommendation to use a certain provider.
The Court of Appeals rejected Patel’s theory that a patient referral is limited to the act of recommending or steering a patient to a particular provider. Patel presented evidence that his office merely gave prospective home health patients a series of brochures supplied by the nearly 20 home health agencies that served his patients. Patel argued that under the common definition of “referral,” the patients referred themselves to a particular home health agency when they chose the provider.
The court, however, concluded that the certification by Patel also was a referral as “[e]xercising this gatekeeping role is one way that doctors refer their patients to a specific provider.” The court recognized that in the absence of the certification the agency would not receive payment from Medicare. It stated that, “t]he referral process…continues until the Form  is signed.”
Several things are of note in this ruling. First, the court found a violation of the antikickback law even though there was no dispute that the home health care was necessary. Second, the conviction stood although the patients had selected the provider and Patel had many more home health patients with other agencies. Third, the level of kickbacks was small with only 1 or 2 patients “referred” each month. Finally, Patel was found guilty for accepting the payments alone. He never solicited the payments.
Generally, prosecutions have centered on big money cases, often involving large providers. Here, it was a small home health agency and only small dollars involved. Still, the parties were targeted, prosecuted, and now face jail time. Dr. Patel was sentenced to eight months imprisonment, 200 hours of community service, and was required to forfeit $31,900 in kickback payments. This case sends a strong message to the “small time offender” - every schemer is a risk.