On April 14, 2025, the Seventh and Second Circuits each issued opinions narrowing the scope of advertising, marketing, and booking fee activities that run afoul of the federal Anti-Kickback Statute (AKS). See United States v. Sorenson, 134 F.4th 493 (7th Cir. 2025); United States ex rel. Sisselman v. Zocdoc Inc., No. 24-2807, 2025 U.S. App. LEXIS 8719 (2d Cir. Apr. 14, 2025). The AKS bars requesting, receiving, offering, or paying "remuneration"—something of value exchanged in cash or in kind, directly or indirectly, for patient referrals for a drug or medical service for which any portion is paid by a federal healthcare program. While the AKS is a criminal statute, an AKS violation can also serve as a predicate offense under the civil False Claims Act (FCA), which punishes the knowing submission of false claims or certifications to the government.
The government continues to pursue AKS and FCA cases premised on federal health program advertising and marketing—for example, intervening on May 1, 2025, in a 2021 FCA qui tam alleging AKS violations premised on Medicare Advantage health plan enrollment marketing practices. United States ex rel. Shea v. eHealth, Inc., No. 21-cv-11777-DJC (D. Mass.). As this and other cases wind their way through the courts, the AKS and FCA bar should take note of Sorenson and Sisselman's key takeaways and background.
Key Takeaways
- Payments to marketing firms for advertising and lead generation are not per se illegal kickbacks if the firms do not directly influence healthcare decisions and physicians retain independent judgment.
- Non-physician conduct may still constitute an AKS violation in a narrower circumstance where a non-physician exerts such influence over the medical decisionmaker that the physician's signature is merely a formality or rubber stamp.
- Paying an online appointment booking fee is not a per se AKS violation.
- Obtaining a favorable HHS-OIG advisory opinion on which a defendant relies may defeat the requisite scienter under the AKS and FCA.
Sorenson deemed advertising activities that did not influence medical provider decisions not kickbacks under the AKS
In United States v. Sorenson, the Seventh Circuit reversed defendant Mark Sorensen's AKS criminal conviction because the government failed to present sufficient evidence that Sorenson's payments to advertising and marketing companies for Medicare referrals to his durable medical equipment (DME) distribution company constituted illegal kickbacks. This was the first time the Seventh Circuit considered the AKS in the context of advertising and marketing activities.
The defendant's business model had multiple steps. The alleged co-conspirator marketing firms published advertisements for orthopedic braces. Interested patients completed electronic forms with their and their physicians' contact information. This information was forwarded to a call center, where a sales agent would contact the patient to discuss ordering a brace and generating a prescription form. With the patient's consent, sales agents faxed the prefilled but unsigned prescriptions to those patients' physicians. As the court noted, physicians "declined 80 percent of the orders sent" and "regularly ignored" the prescription forms. Sorenson, 134 F.4th at 497. If a physician signed a prescription, Sorensen's company directed the DME manufacturer to ship the braces to patients, while another company billed Medicare. From the funds collected from Medicare or other insurance, Sorenson's company retained 21% as a service fee and paid the remaining 79% to the manufacturer, which, in turn, paid from that 79% share the advertising firms based on the number of leads each generated. A federal grand jury indicted Sorensen under the AKS and for conspiracy to defraud a healthcare program.
The Seventh Circuit overturned Sorenson's conviction, holding that the payments were not illegal kickbacks because the advertising and manufacturing firms Sorensen paid "were neither physicians in a position to refer their patients nor other decisionmakers in positions to 'leverage fluid, informal power and influence' over healthcare decisions." Id. at 496. Critically, the court held that doctors retained their independent judgment to decide whether to sign and return the DME prescriptions to Sorenson's company, and no portion of the Medicare reimbursement went to the physicians. This was not a scenario, the court explained, where "the physicians' approval 'seemed to be more of a formality or rubber stamping' of the sales representative's referral" or where Sorenson had "power and influence over doctors to direct Medicare patients to a specific…health provider." Id. at 502 (citation omitted). The central question about Sorenson's intent, in the court's view, was whether he intended to induce referrals (which violates the AKS) or whether he intended to compensate advertisers (which is permissible). The court deemed his intention to be the latter, explaining that the payments were "legal compensation for advertisers" and that "aggressive advertising efforts are not equivalent to unlawful referrals of patients." Id. at 504. The government currently has until May 28, 2025 to file a petition for rehearing.
Sisselman relied on favorable HHS-OIG Advisory Opinions in affirming no scienter
In United States ex rel. Sisselman v. Zocdoc Inc., the Second Circuit affirmed the dismissal of a qui tam complaint for failing to adequately plead that Zocdoc, an online medical appointment online booking company, had the requisite scienter for an AKS and FCA violation. In 2022, Sisselman, a physician on Zocdoc's platform, brought a whistleblower action in which the government decline to intervene. Sisselman alleged that Zocdoc's booking fee model violated the AKS and FCA because it routed Medicare, Medicaid, and other federal healthcare program beneficiaries to providers willing to pay an effective success fee. The relator claimed that the only reason Zocdoc obtained two favorable advisory opinions for its fee model from the Department of Health and Human Services Office of the Inspector General (HHS-OIG) was that it withheld material information about how the fee was calculated. The lower court dismissed relator's second amended complaint with prejudice.
In a summary order (which renders the decision persuasive but not precedential), the Second Circuit affirmed the dismissal, relying heavily on the HHS-OIG advisory opinions, which concluded that although Zocdoc's booking fee structure implicated the AKS, it did not violate it. The appellate court agreed with the district court that the HHS-OIG advisory opinions expressly considered the at-issue conduct, and that relator did "little more than apply conclusory labels to the exact practices and fees discussed by the OIG." Sisselman, 2025 U.S. App. LEXIS 8719, at *4. Given Zocdoc's reliance on those HHS-OIG opinions, the company lacked the scienter required by the FCA and the AKS.