Anti-Kickback Statute and False Claims Act

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7^th Circuit Court of Appeals

Case Name: Stop Illinois Health Care Fraud, LLC v. Asif Sayeed

Case No.: 22-3295

Officials: Ripple, Brennan, and Scudder, Circuit Judges.

Focus: Anti-Kickback Statute and False Claims Act

Asif Sayeed and three related healthcare firms were found culpable for breaching the Anti-Kickback Statute and False Claims Act, leading to a nearly $6 million judgment. Sayeed was the owner of Management Principles, Inc. (MPI), a healthcare management entity overseeing two smaller companies offering home-based medical services to Medicare recipients in Illinois. These companies garnered a substantial portion of their business from the Healthcare Consortium of Illinois. In December 2010, Sayeed orchestrated a plan to sidestep the Consortium’s referral protocol by directly approaching its clients for additional services. MPI inked a Management Services Agreement with the Consortium, granting full access to clients’ healthcare data, which MPI then leveraged to target and solicit Medicare-eligible seniors for supplementary healthcare services.

Following a bench trial in July 2019, the district court initially ruled that Sayeed and his companies hadn’t contravened the Anti-Kickback Statute or False Claims Act, contending their payments to the Consortium were for obtaining information rather than patient referrals. The plaintiff appealed, prompting the court of appeals to overturn the decision, deeming the defendants’ actions as a form of indirect referral constituting an illegal kickback scheme.

Upon remand, the district court found the defendants liable under both the Anti-Kickback Statute and False Claims Act. It imposed damages totaling $5,940,972.16, calculated by tripling the value of the false Medicare claims and adding a $5,500 per-claim penalty. The defendants appealed, contesting both the damages awarded and the underlying liability determination. The Seventh Circuit upheld the liability judgment but remanded partially to allow the district court to specify which Medicare claims, if not all, stemmed from the defendants’ illicit kickback scheme.

Affirmed and vacated with a limited remand

Decided 05/02/24

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