Charge Bargaining in Anti-Kickback Case Involving Bribes for Test Referrals to Clinical Laboratory
The headline in the case of United States v. Dennis Aponte, (D.N.J. 2014) is nothing new: a physician received illegal kickbacks in exchange for referring patient blood specimens to a diagnostic laboratory, Biodiagnostic Laboratory Services, LLC, which were ultimately billed to government payers – Medicare and Medicaid. The lab earned more than $200 million in illegal revenue from a kickback scheme involving sham lease agreements, sham services agreements, and other kickback arrangements with physicians. In fact, the lab used a sales and marketing entity, in many cases, as a “middle man” or “consultant” to deliver cash payments to physicians. Some of those discussions were intercepted by audio recordings or were provided to the government in the form of text messages. Thus far, there is nothing atypical about this case.[1]
What is interesting and impressive about this case, however, is that government never charged the defendant-physician with a violation of the health care fraud statute or the Anti-Kickback statute. Instead, counsel for the defendant-physician negotiated a plea to a one count Information alleging a violation of the Travel Act. (18 U.S.C. Section 1952).
But, why would the parties agree to a Travel Act plea?
The government resurrected the use of the Travel Act as an alternative method of prosecuting certain forms of commercial bribery not covered by the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA). Yetthe government seldom uses the Travel Act to prosecute violations of the Federal Anti-Kickback Statute.
Stated simply, defense counsel successfully negotiated a sweet-heart deal.
First, the arrangement permitted the physician to plea to a Travel Act charge and to avoid a plea to a more serious criminal charge of health care fraud with a statutory maximum of 20 years.
Second, the physician avoided mandatory exclusion under the health care fraud statute.
Third, although there are at least 16 grounds for exclusion, including a violation of the Anti-Kickback Statute, or a “criminal offense relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct” pursuant to OIG’s permissive exclusion authorities, OIG-HHS may encounter some difficulties showing that the Travel Act violation in this case constitutes an offense triggering permissive exclusion. [2] Even if they did, the physician might be able to negotiate an Integrity Agreement with OIG.
In sum, the plea agreement in Aponte reinforces that, whenever possible, clients should take advantage of charge-bargaining in health care fraud cases to minimize the likelihood of a potentially lengthy sentence and to avoid automatic exclusion from federal health care programs.
Author: Andrew Feldman
Mr. Feldman represents professionals, corporations, health care providers, and health care marketers in government investigations and prosecutions throughout the United States. Mr. Feldman works tirelessly for his clients from the time an investigation begins until the time a jury renders a verdict.
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