A durable medical equipment supplier and a compounding pharmacy are separate
corporations, but both are owned by the same people. The DME
supplier refers its nebulizer patients to the pharmacy for the respiratory
medications. The pharmacy refers its customers who buy respiratory medications to the durable medical equipment supplier. The money from both is used to pay advertising, employees and expenses. When you look at the customers of both companies they are basically all the same. What if the corporations are not separate. What if there is one corporation but each business has a different name under the corporation.
Review United States. v. Davis, 132 F.3d 1092 (5th Cir. 1998), holding that even if primary reason for payment is not referrals, it still violates kickback statute as long as it is one of the reasons for the referral. This is know as the "one purpose test" which was established in the landmark case of United States. v. Greber, 760 F.2d 68, 69 (3rd Cir. 1985), cert. denied, 474 U.S. 988 (1985). This test has also been adopted by the Fifth, Ninth, and Tenth Circuits. See U.S. v. Davis, 132 F.3d 1092 (5th Cir. 1998); U.S. v. Kats, 871 F.2d 105 (9th Cir. 1989); and U.S. v. McClatchey, 217 F.3d 823 (10th Cir. 2000) (reaff'd., U.S. v. LaHue, 261 F.3d 993 (10th Cir. 2001)).
corporations, but both are owned by the same people. The DME
supplier refers its nebulizer patients to the pharmacy for the respiratory
medications. The pharmacy refers its customers who buy respiratory medications to the durable medical equipment supplier. The money from both is used to pay advertising, employees and expenses. When you look at the customers of both companies they are basically all the same. What if the corporations are not separate. What if there is one corporation but each business has a different name under the corporation.
Review United States. v. Davis, 132 F.3d 1092 (5th Cir. 1998), holding that even if primary reason for payment is not referrals, it still violates kickback statute as long as it is one of the reasons for the referral. This is know as the "one purpose test" which was established in the landmark case of United States. v. Greber, 760 F.2d 68, 69 (3rd Cir. 1985), cert. denied, 474 U.S. 988 (1985). This test has also been adopted by the Fifth, Ninth, and Tenth Circuits. See U.S. v. Davis, 132 F.3d 1092 (5th Cir. 1998); U.S. v. Kats, 871 F.2d 105 (9th Cir. 1989); and U.S. v. McClatchey, 217 F.3d 823 (10th Cir. 2000) (reaff'd., U.S. v. LaHue, 261 F.3d 993 (10th Cir. 2001)).
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