By Jeffrey H. Brochin, J.D.
A federal district court properly convicted a Chicago podiatrist of violating the Anti-Kickback Statute (AKS) when he knowingly received payment for referring patients to the hospital, and the teaching contract through which he was paid the kickbacks was a mere guise, a federal appeals court has ruled. The contract did not fall under the safe harbor exception of the AKS, the expert witness’ testimony did not require empirical analysis to be admitted, and the AKS itself was not unconstitutional as applied to the podiatrist (U.S. v. Moshiri, June 5, 2017, per curiam).
Background. In 2001, the owner of Sacred Heart Hospital in Chicago devised a scheme to bring in more podiatry patients to the hospital under which podiatrists were paid for referrals pursuant to teaching contract stipends (see Convictions of two Chicago hospital administrators supported by evidence, May 15, 2017). In 2006 Dr. Moshiri signed such a contract stating that he was to receive $2,000 per month for performing duties within the residency program including teaching, performing administrative tasks, and conducting residency workshops. At that time, there were at least six other attending podiatrists who performed teaching duties at the hospital without receiving any additional pay. A hospital employee testified that the teaching contracts were unnecessary because physicians had always taught residents without such contracts. In April, 2008, Dr. Moshiri signed a new contract pursuant to which he would receive $4,000 per month for performing the same duties as those set forth in his 2006 contract. After signing this contract, Moshiri was receiving an annual salary of $48,000, while the Director of the Residency Program was receiving $40,000.
In 2013 in the course of an investigation by law enforcement agents, a hospital official recorded a number of conversations with Dr. Moshiri including one in which he offered to bring a list of referrals to the hospital when he picked up his check. In July, 2015 he was convicted of one count of violating the AKS, from which he took this appeal. The appellate court affirmed the conviction.
Safe harbor provision. The doctor argued on appeal that there was insufficient evidence to support his conviction and that the government failed to prove that his teaching contracts fell outside the AKS’s "safe harbor" provision. He further contended that there was insufficient evidence to establish that he knowingly or willfully violated the statute.
The AKS prohibits a physician from knowingly or willfully receiving payment, directly or indirectly, in return for referring a patient for a service for which payment may be made, in whole or in part, under a federal health care program. The statute’s regulations provide a safe harbor for personal services contracts if they meet certain criteria. Generally, a contract is protected by the safe harbor if its terms are for less than a year, the compensation is consistent with fair market values, and the services are reasonably necessary to accomplish the business goals of the contracting entity. The appellate court noted that the government only needed to show that the arrangement took into account the volume or value of any referrals that Dr. Moshiri made to the hospital, and they found that there was ample evidence presented to make that showing. Aside from the offer to bring in a list of his patient referrals, an investigator testified that after his arrest, Dr. Moshiri admitted that his relationship with the hospital had turned into receiving payment for patient referrals. Accordingly, the court ruled that the arrangement fell outside of the safe harbor provision.
Admission of expert opinion testimony. Dr. Moshiri also argued that it was reversible error for the district court to admit the testimony of Dr. Petrov as to the fair market value of the teaching contract. That testimony stated that a typical stipend for teaching physicians in podiatric residency programs was between $400 and $2,000 per year and that he had never heard of an attending physician being paid as much for teaching as Dr. Moshiri was under his contract. Dr. Moshiri contended that Dr. Petrov was not qualified to give such an opinion, and that his testimony was therefore unreliable.
The court disagreed, noting that contrary to Dr. Moshiri’s contention, the expert witness did not opine as to the fair market value of the contract, but rather that he had never encountered such high compensation for similar positions. He further testified as to the industry norms for such contracts based on his specialized experience and knowledge within the field. Dr. Moshiri objected that the testimony was not based on an empirical analysis of podiatric residency programs nationwide; however, the court ruled that the lack of that analysis related only to the weight of the testimony and not its admissibility.
Because Dr. Petrov had testified as to the standards within the industry as he had encountered them throughout his considerable personal experience, that experience--even in the absence of any empirical data--provided an adequate basis for the admission of his expert testimony, and the appellate court ruled that the district court did not abuse its discretion in determining that Dr. Petrov was qualified to provide expert testimony on the nature of physician teaching contracts in a podiatric residency program.
No constitutional vagueness. Finally, Dr. Moshiri argued that the AKS was unconstitutionally vague as applied to his case and urged the court to adopt a standard by which a conviction can stand only if the payment for referrals constituted the primary purpose of the arrangement. However, the court rejected that argument noting that precedent established that if part of the payment compensated past referrals or induced future referrals, it constituted a violation of the AKS. They declined to overturn established case law on that point and held that the AKS was constitutional as applied to Dr. Moshiri, and they affirmed the conviction.
The case is No. 16-1126.
Attorneys: Joel M. Hammerman, Office of the U.S. Attorney, for United States. Carl P. Clavelli (Carl P. Clavelli, Attorney At Law) for Shanin Moshiri a/k/a Shawni Moshiri.
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