Court Rejects Argument That Kickback Law Requires Payments To Decision-Maker's

New York District Court Judge Sandra Townes recently issued an interesting decision on an issue in an alleged “garden-variety kickback” scheme that caught our attention. According to the charging instruments, Ilya and Rachel Krikheli personally, or through intermediaries, arranged for patients to be referred to a radiological testing facility in exchange for payments to the referring doctors and the Krikhelis. According to the charging instruments, the Krikhelis themselves arranged for doctors of their acquaintance to send patients to the facility in exchange for kickbacks or bribes ranging from $70 to $130, depending on the type of radiological testing involved. Among other things, they were charged with violating 42 U.S.C. §1320a-7b(b)(2)(A) by offering and paying kickbacks and bribes to induce physicians to refer patients to Doe for these diagnostic tests. 

The Krikhelis argued that §1320a-7b(b)(2)(A) could be violated only when payments are made or offered to a decision-maker. The Krikhelis reasoned that only the doctors were decision-makers under the circumstances of their cases, and that "any parts of the indictment alleging unlawful payments to non-doctors” had to be dismissed.
 
The court disagreed. The court distinguished two cases cited by the Krikhelis from other circuits – United States v. Miles, 360 F.3d 472 (5th Cir. 2004) and United States v. Polin, 194 F.3d 863 (7th Cir. 1999) – and found that the language of the statute does not state or imply that a defendant must pay a "decision-maker." It also ruled that there was no basis for reading that requirement into the law.