Bingham v. HCA, Inc., a recent Eleventh Circuit case, highlights the centrality of fair market value to Anti-Kickback Statute (AKS) analyses. This decision is significant for several reasons and we expect to see Bingham cited by many defendants in future False Claims Act cases. The case is also a reminder that the current regulatory and enforcement environment can result in litigation over arrangements with fair market value payments that involve little, or no, compliance concerns.

One of the most fundamental elements of managing risk under the federal Anti-Kickback Statute (AKS) is ensuring remuneration is consistent with fair market value. A recent Eleventh Circuit case highlights the centrality of fair market value to AKS analyses. See Bingham v. HCA, Inc., Case No. 1:13-cv-23671 (11th Cir. 2019). In Bingham, the court held that proving fair market value is an essential element for a relator to survive summary judgment and that relators must plead a lack of fair market value consistent with the Rule 9(b) particularity requirement to allege improper remuneration exists in the first place. The court’s holding is significant for two reasons: (1) it underscores that the plaintiff bears a burden in pleading and proving lack of fair market value, and (2) it suggests that fair market value compensation may be an absolute defense to an AKS allegation. We expect to see Bingham cited by many defendants in future False Claims Act cases, and we will be watching to see how the Eleventh Circuit and other courts continue to evaluate these concepts.

Case Background and Procedural History

We note that it took five years of costly litigation for HCA to reach this decision. Relator, who has filed a number of cases against hospital systems over the years concerning real estate deals, filed his first amended complaint on August 15, 2014. Relator alleged that HCA, through its Centerpoint Medical Center and Aventura Hospital facilities, violated the FCA due to improper space rental arrangements with physicians. Relator alleged that HCA allegedly paid a medical office building developer improper subsidies and that the developer passed the value of these subsidies onto physician tenants who signed 10-year leases through low initial lease rates, restricted use waivers, operating cash-flow shares and free office improvements. Relator also alleged HCA provided direct remuneration to physician tenants at the Aventura facility, including free parking, subsidized common area maintenance, free use permissions and below market rent.


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Over the last several months, a handful of federal court decisions—including two rulings this summer on challenges to the admissibility of proposed expert testimony—serve as reminders of the importance of (and parameters around) fair market value (FMV) issues in the context of the Anti-Kickback Statute (AKS) and the False Claims Act (FCA).

First, a quick level-set.  The AKS, codified at 42 U.S.C. § 1320a-7b(b), is a criminal statute that has long formed the basis of FCA litigation—a connection Congress made explicit in 2010 by adding to the AKS language that renders any claim for federal health care program reimbursement resulting from an AKS violation automatically false/fraudulent for purposes of the FCA.  42 U.S.C. § 1320a-7b(g).  Broadly, the AKS prohibits the knowing and willful offer/payment/solicitation/receipt of “remuneration” in return for, or to induce, the referral of federal health care program-reimbursed business.  Remuneration can be anything of value and can be direct or indirect.  In interpreting the “in return for/to induce” element, a number of federal courts across the country have adopted the “One Purpose Test,” in which an AKS violation can be found if even just one purpose (among many) of a payment or other transfer of value to a potential referral source is to induce or reward referrals—even if that clearly was not the primary purpose of the remuneration.
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This April, providers cheered when a federal district court in the Middle District of Florida found insufficient evidence to support a relator’s theory that a hospital had provided free parking to physicians, in violation of the Stark Law and Anti-Kickback Statute (AKS). In the Report and Recommendation for United States ex rel. Bingham v. BayCare Health Systems, 2017 WL 126597, M.D. Fla., No. 8:14-cv-73, Judge Steven D. Merryday of the Middle District of Florida endorsed magistrate judge Julie Sneed’s recommendation that Plaintiff Thomas Bingham’s Motion for Partial Summary Judgment be denied and that Defendant BayCare Health System’s Motion for Summary Judgment be granted. However, as we discussed in a previous FCA blog post regarding these allegations, this type of case encapsulates a worrying and costly trend where courts allow thinly pleaded relator claims in which the government opted not to intervene, to survive past the motion to dismiss stage into the discovery phase of the litigation.

Bingham is a serial relator who practices as a certified real estate appraiser in Tennessee and was unaffiliated with BayCare. In his latest attempt, Bingham alleged that BayCare Health System had violated the Stark Law and the AKS by providing affiliated physicians free parking, valet services and tax benefits to induce physicians to refer patients to the health system.
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With health care becoming more consumer-driven, health care providers and health plans are wrestling with how to incentivize patients to participate in health promotion programs and treatment plans. As payments are increasingly being tied to quality outcomes, a provider’s ability to engage and improve patients’ access to care may both improve patient outcomes and increase

Two decisions from the US District Court for the Southern District of Texas limit the extent to which relators can stretch the use of circumstantial evidence to support a False Claims Act case based on an anti-kickback or off-label marketing theory. In two separate decisions on December 10 and December 14 in US ex rel.

As many health lawyers know, the government usually only pursues the person or entity that offers or pays allegedly improper remuneration, even though the federal Anti-Kickback Statute (AKS) also applies to those to solicit or receive it.  This uneven enforcement pattern occurs for a variety of reasons — the alleged payor is the focus of

Defending False Claims Act litigation is often a costly budget item. The disposal of weak cases by the government through the intervention decision making process has always been a critical safety valve for non-culpable defendants. Two of the more concerning trends in False Claims Act litigation, however, are (1) the increasing likelihood of relators pursuing