Court Opinion

ID: 9466858
Source: CourtListenerOpinion
Date Created: 2023-08-05 01:30:56.459104+00
Date Added: 2024-06-11T17:40:01.112907
License: Public Domain

NATHANIEL R. JONES, Circuit Judge,
concurring.
I agree that the term “kickback” should be defined to include “a percentage payment ... for granting assistance by one in a position to open up or control a source of income.” United States v. Hancock, 604 F.2d 999, 1002 (7th Cir. 1978). The United States has an important interest in securing the honest administration of federally funded programs. United States v. Thompson, 366 F.2d 167 (6th Cir.), cert. denied, 385 U.S. 973, 87 S.Ct. 512, 17 *122L.Ed.2d 546 (1966). I write separately to discuss a substantial issue of first impression concerning the construction of 42 U.S.C. § 1396h(b)(l) (1972): Is a physician, who provides services to medicaid patients and who receives illegal kickbacks from laboratories for the referral of those patients, for which referrals federal funds do not reimburse the doctor or the laboratory, a person who “furnishes items or services to an individual for which payment is or may be made in whole or part out of Federal funds . . . and who ... receives any (1) kickback ... in connection with the furnishing of such items or services . . . ?” I concur with the majority’s affirmative answer.
The language of the amended informa-tions and the guilty pleas, as thoroughly reported in the majority opinion, define the facts of the case.1 The defendants were charged with and pleaded guilty to receiving payments in various forms from a laboratory for patient referrals. The informa-tions allege that the defendants “obtained services” from a laboratory, for which services medicaid would pay in part, and that the defendants received kickbacks in connection with these services. Consequently, the relevant services for which federal funds were paid are the tests performed by the laboratory. The record also establishes that the defendants were reimbursed by medicaid for their treatment of the same patients referred to the laboratories.
The facts raise two questions of statutory interpretation: 1) did the physicians “furnish” the laboratory services; and 2) were the kickbacks paid “in connection with” the laboratory services rather than just the patient referrals? Defendants argue that they did not “furnish” the laboratory services, since the laboratory actually performed the tests. They point out that their services were reimbursed separately from the laboratory tests. Second, they argue that the kickbacks were paid “in connection with” the patient referrals rather than any service for which medicaid funds were paid. They declare that the kickbacks did not affect their treatment of patients or the laboratory’s performance of tests.
It is fair to say that physicians in Michigan in 1976-1977 furnished the laboratory services to their patients. The physicians took the specimens and sent them to a laboratory. A laboratory could act only on orders from the physicians. Mich.Comp. Laws Ann. §§ 325.81(b), 325.89(b), repealed by Mich.Comp.Laws Ann. § 333.20501 et seq. (1978); cf. 42 C.F.R. § 405.1316(e) (Medicare regulations). The laboratory could report the test results only to the physicians, unless they instructed otherwise. Mich.Adm.Code R. 325.2353(2) (Rule 53); cf. 42 C.F.R. § 405.1316(g) (Medicare regulations). The physicians bore the responsibility of interpreting the test data. In short, the physicians did everything but actually perform the clinical tests. Under these circumstances, by interpreting the word “furnish” according to its common usage to mean “supply or provide”, I would hold that the physicians did “furnish” the laboratory services.
The physicians received the kickbacks “in connection with” the laboratory services. The statute is satisfied if there is a logical relationship between the kickbacks and the services for which federal funds were paid. In our case, the kickbacks were an agreed part of the performance of the laboratory services. The relationship between the physicians and the laboratory was formed around the payment of the kickbacks. The physicians chose to refer patients to a specific laboratory because of the negotiated *123kickback payments. The phrase “in connection with” has a sufficiently broad meaning in common parlance to conclude that the kickbacks were received “in connection with” the laboratory services.
The legislative history bolsters my interpretation of § 1396h(b)(l) as enacted in 1972. Congress intended to prohibit in the administration of the Medicaid program any practices which were unethical or were proscribed by state law. H.R.Rep.No.92-231, 92d Cong., 2d Sess., reprinted in [1972] U.S.Code Cong. & Admin.News, pp. 4989, 5007, 5093, 5308. The physicians’ receipt of kickbacks for patient referrals to the laboratory is forbidden by both Section 21 of the Code of Ethics of the Michigan Association of Osteopathic Physicians and Surgeons and by state statute, Mich.Comp.Laws Ann. § 445.162. Similarly, a laboratory is prohibited from soliciting business by paying kickbacks. Mich.Comp.Laws Ann. § 333.-20525(c) (1978). Since the language of the statute permits, § 1396h(b)(l) should be interpreted to effectuate congressional intent. Barrett v. United States, 423 U.S. 212, 96 S.Ct. 498, 46 L.Ed.2d 450 (1976); United States v. Tarter, 522 F.2d 520 (6th Cir. 1975). The ordinary meaning of the statutory language and the 1972 legislative history compel the conclusion that the physicians’ receipt of kickbacks under the circumstances in this case is a violation of § 1396h(b)(l).
Finally, because the ordinary meaning of the plain language of § 1396h(b)(l) would have notified the defendants that their conduct was unlawful, the statute is not unconstitutionally vague. United States v. Hancock, 604 F.2d at 1002.
Accordingly, I concur with the opinion and judgment of the majority.

. According to my construction of § 1396h(b)(l), the amended informations do state an offense. In his zeal to uphold the guilty pleas, the Assistant United States Attorney argued seriously that this Court should consider the amended informations to have been informally amended by oral argument and by his response to the defendants’ motion to dismiss the informations. Further, he contended that the district court had implicitly granted leave for this informal second amendment. The Government’s position is not supported in the record and is an attempt to play “fast and loose” with the established rules of criminal procedure and principles of due process. Such overly zealous advocacy should be tempered. In other respects, the Assistant United States Attorney prepared a fine brief.