U.S. v. Sorensen: Outlining Outer Boundaries of AKS’s Reach over Healthcare Marketing Arrangements

The U.S. Court of Appeals for the Seventh Circuit recently delivered a pivotal decision that may significantly change how healthcare marketing arrangements are structured. Specifically, the Court ruled there was no violation of the federal Anti-Kickback Statute when payments had been made from a Medicare-registered distributor of medical equipment to: (1) a medical equipment manufacturer, (2) a billing company, and (3) two marketing agencies. The Court’s decision found that (1) these third parties did not have sufficient control over the subject referrals needed to violate the law, and (2) the physicians retained ultimate and independent authority over the decision to order the medical equipment. The Sorensen ruling presents an opening to reassess how to structure healthcare marketing arrangements to comply with the stringencies of the Anti-Kickback Statute.