The U.S. District Court for the Northern District of Texas (the “Court”) recently issued a memorandum opinion highlighting circumstances where compensated marketing conduct may fall outside the scope of Anti-Kickback Statute (“AKS”) liability. United States v. Gray, No. 3:24-CR-0250-S (N.D. Tex. Sept. 18, 2026). Specifically, the Court ordered a new trial after concluding that the evidence presented at trial did not support a finding that a laboratory’s marketing arrangement improperly influenced physician decision-making in violation of the AKS because physicians retained and exercised independent medical judgment over whether genetic testing would occur.
Background
The AKS, codified at 42 U.S.C. § 1320a-7b(b), prohibits knowingly and willfully offering, paying, soliciting or receiving remuneration to induce or reward the referral of services reimbursable by a federal health care program. For a payment to be unlawful under the AKS, “a payor must act with the intent to induce referrals from the payee.” Although commonly applied to health care professionals, the AKS can also extend to payments made to non-health care professionals such as marketing personnel. Penalties for violation include criminal charges, False Claims Act liability, civil monetary penalties and exclusion from federal health care programs. The AKS is designed to prevent payments that could improperly influence clinical decision-making, thereby safeguarding patients from unnecessary or low-quality care driven by financial incentives.
Here, the defendant controlled several laboratories that performed cardiovascular genetic testing. The laboratories contracted with American Health Screening (“AHS”) to market those services to Medicare beneficiaries. AHS telemarketers contacted beneficiaries, screened them for eligibility and, through a contractor, transmitted pre-filled order forms to beneficiaries’ physicians. If a physician authorized testing, the laboratories performed the test and submitted claims to Medicare.
Following a seven-day trial, a jury convicted the defendant of conspiracy, money laundering and health care kickbacks, as reported by the U.S. Department of Justice here. The defendant subsequently sought both a judgment of acquittal and a new trial.
Analysis
The Court granted a new trial after concluding the evidence weighed heavily against the jury’s finding that the defendant intended to improperly influence health care decision-makers. The Court noted that, to “prove that Defendant acted with the requisite intent to induce referrals under the second element (of the AKS), the Government had to prove that Defendant intended to improperly influence ‘those who make healthcare decisions on behalf of patients.’” Central to the Court’s decision was its conclusion that physicians—not marketers—were the relevant decision-makers. The Court noted cardiovascular genetic testing occurred only when a physician signed the order form and physicians remained responsible for determining whether testing was medically necessary.
The Court also found substantial evidence that the physicians exercised independent judgment. According to the record, physicians ignored or declined approximately 80% to 90% of the order forms they received. Rather than demonstrating improper influence, the Court viewed this rejection rate as evidence that the physicians independently decided whether testing would occur.
The Court further found little evidence the defendant or the marketing company attempted to influence physicians or their decision making. Unlike other AKS cases involving financial incentives, personal relationships or other efforts to sway referral sources, the record contained no evidence physicians received remuneration or other benefits in exchange for approving AHS-generated testing requests.
Finally, the Court relied on evidence the laboratories maintained compliance procedures designed to ensure testing occurred only after physician authorization. In the Court’s view, those safeguards reinforced the conclusion physicians—not marketers—controlled the ultimate testing decision.
In reaching its decision, the Court relied on recent appellate decisions addressing when compensation to marketers crosses the line from permissible marketing activity to improper influence over health care decision making. For example, the Court repeatedly cited the Seventh Circuit’s recent decision in United States v. Sorensen, emphasizing that the AKS targets efforts to influence health care decision-making, rather than compensated marketing arrangements by virtue of the compensation involved. Hall Render analyzed United States v. Sorensen here.
United States v. Gray adds to a developing line of case law indicating that compensated marketing activity alone is not necessarily sufficient to establish AKS liability. The critical question remains whether the arrangement reflects an intent to improperly influence individuals making health care decisions.
Practical Takeaways
- Ensure physician independence exists apart from marketers. When contracting with third party marketers, laboratories and other health care suppliers must ensure physicians exercise independent judgment when making medical decisions for their patients.
- Implement service compliance checks. As United States v. Gray shows, creating a system where physician authorization is confirmed before services are rendered may provide relevant evidence that physicians retain independent clinical decision-making and are not improperly influenced.
- Evaluate existing and future marketing relationships. Organizations should assess marketing arrangements to determine whether the marketer or supplier may influence health care decision-making for patients.
- Courts are increasingly focused on actual influence. Recent AKS decisions suggest courts will scrutinize whether a marketing arrangement affects medical decision-making rather than simply whether compensation changed hands.
If you have questions or would like more information about this topic, please contact:
- Keith Dugger at (214) 615-2051 or kdugger@hallrender.com;
- Katherine Schwartz at (317) 977-1432 or kschwartz@hallrender.com;
- Kennedy Bunch at (317) 977-1420 or kbunch@hallrender.com;
- Whitney Jordan at (214) 615-2036 or wjordan@hallrender.com; or
- Your primary Hall Render contact.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.
