mr willis he is reserved five minutes of rebuttal time mr willis will be recognize you good morning your honor please the court of public and counsel and the justices of the court i want to thank you all this morning at the top of my remarks for holding this argument in such extraordinary circumstances as face our city our state and our nation these circumstances remind  ur two bravely of the importance of the protection of public medical programs for seniors that in this state and in this country that is the purpose behind the anti kickback that you and the false claims act application to the medicare program which goes to the heart of the issues before this court and the issues on trial before the district court misuse of the assets of public programs for seniors has long been an issue of great concern to the congress and for that in the anti kickback that he has been well g cover a wide range of far beyond direct quid pro quo bribery agreements between individuals who can refer business or ultimate payment by government health care programs and people who provide care the definition of what constitutes a referral is the key question before this court on a and the district court decision in this case never grapples with what is and is not a referral and in that way the district court's decision went awry and is an error this court in the case laid out a very helpful framework for understanding what constitutes referrals and appropriate go and i think a very analogy like in those types of transaction to a gate keeping function where one entity may have the ability to exercise the role of a gatekeeper with respect to who should receive medical care from government programs and from those patients should receive that care because recourse incision here is remarkably camp on the application of law and instead makes the conclusion that because the witnesses testified that they did not believe there was payment for referrals the payment for referral did not take place in this way the district court has abdicated the legal definition of referrals to lay witness and in doing so has used the definition of referral that does not reflect the law in the circuit testimony before the court with clear and indeed in the in the manner in which it was recounted in the district court's opinion and in the response brief by the defendant at the lead all to make clear that the payments that were made from defendant to eight altered the gatekeeping relationship  a care coordinator and case managers identified clients as a they could benefit from home health testimony at trial and they clear that that rotating list procedure was completely legit client population management principle came up with an idea for the management service agreement which they later said was a quote data mining idea the testimony clearly showed that management services agreement constituted ninety thousand dollars in payment and that that management services agreement constituted a the people who were conducting the data mining the witnesses that testified at trial never heard of data mining and did not know what they were supposed to be doing what they were doing was calling for and that's received seven hundred and twenty thousand dollars worth of medicare if this is an illegal kickback it's the most brilliant marketing idea i've ever seen to restate find and which coincidentally had just been screened for government programs and it's part of that training day purchase clearly purchase as they admitted that they did that they were mine and that  was the telephone numbers they used to call these people their medicare numbers that they could use the bill for their health care their primary care physicians information their health care diagnoses their prescription medication district court clearly deviate from the applicable standards where the case law repeatedly guides the court to look not to what the main purpose of a payment is or what perhaps the primary purpose or the stated purpose but all particular purposes all potential and rather even a portion of the purpose may be to influence the gatekeeping role with respect scheme i think particularly apt to dissipate the veracity decision where they look at employment relationships are supposed that employment relationships with people who are supposedly providing services constitutes a permissible professional services gradient is also applicable but returning to brass means they look and specifically say these individuals were being doctors in that case were being paid for work that was not done that's court made clear that we can't just look at what that reason is for and agreeing that we have to look at all of the potential reasons for an agreement there as in the fact before the district court there were written agreements and professional services agreement that arguably on their face couldn't come within the safe harbor provision but the testimony here and  receive training and i think most poignantly in this case addressed this question of the fact that both of them testified that if they were to receive those training they would have been used because that was information that they already knew happened they were never told that they were supposed to receive any training and they didn't in fact receiving such training and that the even if they had been for that training it would have been commercially useless because they are getting that information that has been their judged under the question the question i have is when i read the management services agreement there's a there's a pretty clear disconnect between the whole data mining rationale and what you read on the face of the management services agreement in other words i don't take away from reading the agreement that this is about data mining and about an interest that  i may have in time of becoming one of the so called a c e o s etc the question i have is this is the following is it significant in your judgment that the management services agreement management services agreement that addresses that point i don't have in front of me as to what the exact citation in but there is a provision in the services deals with protecting the health information that would be governed by hipaa and relate to what can and can't be used for that what that information can and can't be used for and i think under the terms of the man certainly agreement makes clear that eliciting people for business is not one of the legitimate two paragraph two of the safe harbor protected management services agreement is required to and i quote the agency agreement covers all of the services provided the principal for their clear reason why the management services agreement the shame and the fewer the people defendants let know that was a sham the better for them unfortunately the evidence came out and showed trial that these were under applicable law referral had to show that the defendants intended to defraud which under the act requires showing they had knowledge of what they were doing was unlawful with the district court found plaintiffs did not present any evidence of a connection between the alleged giving of gift cards or the management service agreement where they any connection was expected in other words there was no intent to violate the act now i know to the district used the words qui think plated did but the district court decision was a plaintiff did not present evidence of the gift cards or management services agreement were intended to induce referrals the evidence pointed to no connection between the gift cards or agreement any illegal conduct in our view of course we think this case should have stopped with the analysis of the gift cards which was the centerpiece of the complaint those allegations turned out to be completely false plaintiff did not call  prominently in the complaint and she said that she would give maybe a five or ten dollars don't condone a gift cards for somebodies birthday or shallower but nothing like the allegations and point his complaint that she was handing out all the time target gift cards in amounts between fifty dollars and two hundred and fifty dollars to obtain referrals at the trial she question who could possibly have suggested as much with respect to the management services agreement the district court found simply that there was no testimony that the five thousand dollars monthly payments were made for the purpose of obtaining referrals mr saeed testified that the reason for the management services agreement was for exploring the possibility of becoming an accountable care organization which was a feature of the recently passed affordable care act unlike h formed by providers rather than insurance companies and are accountable for the quality of care to a particular patient population a c o s or reimburse based on performance metrics basically it's a value based on like a unlike over the course of three years mr sipe needs felt he could not go out on his own and find five thousand patients to analyze and use them to predict what kind of services and a c l we confront based on the needs in that area but he thought he could utilize a c i s database and patient population because that would tell him how many people suffered from cardiac health issues or diabetes and he could use it to predict future trends by looking at the data he would then go back to their shop and reach out in different contacts to try to develop business for and sister companies you agree as a matter of fact that's just what happened  since i think it's a little unclear i understand where the court is coming from and that because it was testimony about contacting then a fisheries was a little less clear is whether that was occurring i think during th period of the management services agreement when they were payments being made and whether that was allowable under the management services agreement you may recall that  management services agreement and certainly mr sipe need believed it was but it's really unclear as to whether when those contacts were made remember the the agreement was only in effect for like eighteen months because at that point mr site decided that it was not financially feasible to do this i mean it was worth it to him to do this serious data mining and basically eventually do analytics to decide because the a c o s differ from  rewarded you're getting incentives for like keeping costs down and your penalize good if the costs go up and so that is what the purpose of the a c e o is and in order to determine whether it's going to be financially feasible to you and this is what mr  orthopedic surgeon for access to the surgeon's patient files and contact information and the patients and that the stated purpose of doing so is so that the physical therapist you know the new patient referral information on that hypothetical with that arrangement in your view violate the kickback statute i'd have to know access to the surgeon's files and get contact information for people that are going to have surgeries and then what i'm going to do is i'm in a contact i'm i'm going to say i understand that you  had shoulder surgery or knee replacement or what have you i'm a physical therapist i'd like to provide therapy for you that's that act that for that information is what the serapis pay the surgeon is what what the definition of referral means within the statute how do we define referral is this site because what in that in that hypothetical if  surgeon why didn't refer anybody i just opened up access to my database that kind of construction consistent with what we said and to tell in  be in return for a referral and what happened was the the payment was made when you know if there had been a referral by apparently like the employees of grand in that particular case but the actual referral was made when the physician got the money in order to sign off on the form forty five that was a clear indication of payment for referrals in detail so why not in my hypothetical well i guess it could be if the purpose is to obtain referrals if that's the purpose of it but that was not the purpose here the purpose here was not to obtain referrals purpose here was i'm sorry i don't want to know i was innocent and my only question is you do you mean the but i would say that all the testimony both from the n s a with respect to the n s a because it did talk about you know looking at reviewing charts and and say i had it in front of me it talked about giving oversight me implementation of the program chart review things like that but also just from the fact when you're talking about mr site leads intent just from talking to the lawyer dony that i didn't think that there was anything improper about what he was doing so the only testimony although the m s a is a bit vague the only testimony would be that was what the judge found which is that mr sipe did not intend to violate the anti kickback act that was the only evidence in the case at this stage so and i was going to get to that you know that the only said it was ok that we were looking at charts and doing these things ella gray's said that they were conversations when they were talking about the management services agreement conversations about the data mining  and this was important for mr cite in order to determine whether to become a c e o in the end he decided not to become an a c l and it's interesting that after he stopped the decision to become an ac there was still some data mining apparently going on but he wasn't paying any money for it so it which seems to show that he wasn't paying money and ordered to solicit clients  because once the he decided not to go ahead with the a c o it ended so i think it's a lot of you that basically based on the evidence the judge made a decision she believed m she believed what he was saying and she believed that his a c l was not idea was not some sort of ruse as mr willis plants and paints it but it was legitimate that mr site was trying to find that out this was something  was created through the affordable care act and mr side was trying to like come under the affordable care act and the only way we could do it was to be able to find out if you could find a population of five thousand patients  and it would be for and financially feasible for him to do it the whole thing really is just a question of intent the judge made a factual finding that there was no intent to violate the law and i think for that as to where his money was in conflict with what the evidence as to what actually happened was that not true and were that the case certainly this would be a different feel to district course and vision does not include any finding findings that this party was credible where there is not a direct service agent type referral that is an illegal referral for purposes of the anti kickback that you the district court in its application of the laws of the facts here and because of that reversal is required thank you mr willis judge ripple did you have any further questions no thank you judge cutter did you have any further questions for me thank you to everyone thank you to both counsel this case will be taken under advisement