According to the OIG, the Anti-Kickback Statute was originally enacted in 1972 to protect patients and federal health care programs from fraud and abuse. See id. In response to the concerns of health care providers regarding the prohibition of certain types of potentially beneficial arrangements, Congress authorized HHS to designate types of relationships, which would potentially implicate the Anti-Kickback Statute but would not be subject to prosecution. See id. The safe harbors that have been designated by HHS contain specific requirements that relate to each type of relationship. See id.
Perhaps the most noteworthy subject of relevant case law, however, is the scope of the Anti-Kickback Statute’s scienter requirement. In United States v. Greber, the landmark case regarding the scope of the Anti-Kickback Statute, the U.S. Court of Appeals for the Third Circuit established the “one purpose” test. Under the “one purpose” test, “if one purpose of the payment was to induce future referrals, the Medicare statute has been violated.” U.S. v. Greber, 760 F.2d 68, 69 (3rd Cir. 1985), cert. denied, 474 U.S. 988 (1985). This test has also been adopted by the Fifth, Ninth, and Tenth Circuits. See U.S. v. Davis, 132 F.3d 1092 (5th Cir. 1998); U.S. v. Kats, 871 F.2d 105 (9th Cir. 1989); and U.S. v. McClatchey, 217 F.3d 823 (10th Cir. 2000) (reaff'd., U.S. v. LaHue, 261 F.3d 993 (10th Cir. 2001)) In U.S. v. Bay State Ambulance and Hospital Rental, Inc., the First Circuit stopped short of explicitly adopting the “one purpose” test, instead instructing the jury that the “primary purpose” must be improper in order to obtain a conviction under the Anti-Kickback Statute. See U.S. v. Bay State Ambulance and Hospital Rental, Inc., 874 F.2d 20, 32 (1st Cir. 1989). The U.S. Supreme Court has not yet directly addressed the scope of the Anti-Kickback Statute.The Anti-Kickback Statute is an intent-based statute requiring the party “knowingly and willfully” engage in the prohibited conduct. See 42 U.S.C. § 1320a-7b(a). In 1995, the Ninth Circuit, in Hanlester Network v. Shalala, held that a party may violate the federal fraud and abuse laws “knowingly and willfully” only if he or she (i) knows that the Anti-Kickback Statute prohibits offering or paying remuneration to induce referrals and (ii) engages in the prohibited conduct with the specific intent to disobey the law. Hanlester Network v. Shalala, 51 F.3d 1390, 1400 (9th Cir. 1995) (citing Ratzlaf v. United States, 510 U.S. 135 (1994)) to hold that the government had not proven that the appellants acted with the requisite intent to have received remuneration in return for referrals since the representation in this case which rose to the level of impermissible inducement under the Anti-Kickback Statute was made by the marketing director and violated the organizations’ stated policies). Other courts since Hanlester have failed to follow the Ninth Circuit, instead distinguishing Ratzlaf. See, e.g., U.S. v. Neufeld, 908 F.Supp. 491 (S.D. Ohio 1995) (declining to follow Ninth Circuit’s definition of “willful” and distinguishing the scienter requirement of Ratzlaf as applying to the federal anti-structuring statute, which is different from the Anti-Kickback Statute). The Eighth Circuit, in U.S. v. Jain, interpreted “willfully” to mean “unjustifiably and wrongfully known to be such by the defendant.” U.S. v. Jain, 93 F.3d 436, 440 (8th Cir. 1996).Although the Supreme Court has yet to rule on the meaning of “willfully” under the Anti-Kickback Statute, it has encountered the term in other contexts and has addressed it in a manner that may provide guidance. The Court granted certiorari in Bryan v. U.S. to resolve a similar split among circuits as to whether “willfully,” as applied to a different statute, required knowledge by the defendant that he was violating the statute at issue or merely required knowledge that the conduct was unlawful. See Bryan v. U.S., 524 U.S. 184 (1998). The Court rejected the narrow Hanlester approach and adopted a broader requirement holding that “willfully” only requires proof that the defendant was aware that his conduct was generally unlawful. See id. at 196. The Court distinguished Ratzlaf as applying to “highly technical statutes that presented the danger of ensnaring individuals engaged in apparently innocent conduct.” See id. at 203. Thus, the classification of the Anti-Kickback Statute in this regard is still unanswered.