The Hanlester Network v. Donna E. Shalala, Secretary of the Department of Health and Human Services

Plaintiffs/appellants appeal the district court’s grant of summary judgment in favor of the Secretary, and denial of plaintiffs/appellants motion for summary judgment.

The issues presented are whether appellants violated the provisions of the Medicare-Medicaid anti-kickback statute by (1) offering or paying remuneration to physician limited partners to induce the referral of program-related business to limited partnership laboratories, or (2) soliciting or receiving remuneration “in return for” referrals by virtue of their management agreement with Smith-kline BioScience Laboratories (SKBL), and whether the Secretary of the Department of Health and Human Services (Secretary) erred in excluding appellants from Medicare and Medicaid participation for various periods due to alleged violations of the Medicare/Medicaid anti-kickback statute, 42 U.S.C. § 1320a-7b(b).

In order to resolve these issues, we must determine (1) whether the Secretary properly interpreted the Medicare/Medicaid anti-kickback statute in the context of health care joint ventures, (2) whether the statute is unconstitutionally vague as applied to the facts of this case, and (3) whether appellants knowingly and…