11th Circuit: AIDS Organization Didn’t Offer Kickbacks

ATLANTA (CN) – The AIDS Healthcare Foundation did not violate the Anti-Kickback Statute when it gave its employees bonuses for referring HIV-positive patients to its own healthcare services, the 11th Circuit ruled Tuesday.

Three former managers of the AIDS Healthcare Foundation – referred to as “relators” in court documents – accused America’s largest supplier of HIV and AIDS medical care of offering its employees kickbacks for giving referrals to people with HIV and AIDS so it could receive more money from the federal government.

Dismissing the whistleblower suit, the 11th Circuit affirmed the United States District Court for the Southern District of Florida’s decision, which found the referrals were for a standalone compensable service under the Ryan White Act – the legislation behind the largest federally funded program for people with HIV and AIDS – and thus did not violate the anti-kickback law.

“We are thrilled to have total vindication from these completely baseless charges,” Marin Austin, director of communications for the AIDS Healthcare Foundation, said in an interview. “We will now pursue our counterclaims for the violation of patient confidentiality by the relators, which were put on hold pending this decision.”

“The relators’ argument misses the mark,” U.S. Circuit Judge William Pryor wrote for the three-judge panel Tuesday. “Unlike the payments in Starks that were made to non-employees in exchange for referrals not contemplated by a healthcare program, the payments that the Foundation made to Rodriguez were in exchange for referrals that were both a standalone compensable service under the Ryan White Act and demanded by its contracts with Florida. The relators cannot avoid the plain text of the statutory exemption.”

In United States v. Starks, the 11th Circuit held that a drug-treatment program violated the Anti-Kickback Statute when it paid unaffiliated workers to refer pregnant women to its services.

Pryor continued that the former employees failed to prove specifically how the foundation committed fraud.

“Most importantly, the relators failed to offer sufficient ‘indicia of reliability . . . to support the allegation [that] actual false claim[s] for payment [were] made to the [g]overnment,’” Pryor wrote in the 26-page opinion. “The relators fail to allege with particularity that these background factors ever converged and produced an actual false claim where the Foundation both violated the Anti-Kickback Statute when it unlawfully recruited a patient and then billed the government for the services provided to that patient.”

Former foundation managers Jack Carrel, Mauricio Ferrer and Shawn Loftis filed the whistleblower suit in April 2015 under the Federal False Claims Act and Florida False Claims Act.

“The court, as well as the federal government, underlined the importance of testing and linking patients to care as part of a model for fighting HIV in America. As America’s largest HIV provider, AHF’s model is far from the problem. Rather, our model is the solution to getting and keeping HIV patients in care,” Austin said.

U.S. Circuit Judge Beverly Martin and U.S. District Judge Janet C. Hall also sat on the panel.

The plaintiffs’ law firm, Cohen Milstein, did not respond to a request for comment by press time.

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