134 F.4th 493
7th Cir.2025Background
- Mark Sorensen owned SyMed Inc., a Medicare-registered distributor of durable medical equipment, chiefly orthopedic braces.
- Sorensen paid advertising and marketing companies (KPN and Byte) to generate leads (patient interest) and a manufacturer (PakMed) to supply the braces.
- The marketing companies advertised the braces; interested patients’ information was gathered and, with their consent, their doctors were asked to authorize prescriptions.
- Physicians retained the authority to approve or deny prescriptions with the vast majority declining to sign.
- Sorensen was convicted at trial for conspiracy and violating the federal Anti-Kickback Statute by allegedly paying kickbacks for patient referrals.
- On appeal, the Seventh Circuit examined whether such payments for advertising and manufacturing constituted illegal referrals under the statute.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether payments to advertising/marketing companies violate the Anti-Kickback Statute | Such payments are illegal kickbacks for referrals of Medicare patients to SyMed | Payments were for lawful advertising/manufacturing, not for referrals | For Sorensen; insufficient evidence of illegal referrals |
| Applicability of the Anti-Kickback Statute to non-physician payees | Statute applies broadly to payments that result in patient referrals | Only applies to those with influencing or referral power over healthcare decisions | For Sorensen; advertisers/manufacturers lacked such power |
| Sufficiency of evidence regarding criminal intent (willfulness) | Evidence supports Sorensen’s knowing violation of the law | Sorensen lacked awareness that his conduct was illegal, as no referrals occurred | For Sorensen; no evidence of intent to induce referrals |
| Review standard for arguments on appeal not specifically raised below | New arguments limited to plain-error review | General sufficiency challenge preserves all arguments | For Sorensen; de novo review applied |
Key Cases Cited
- United States v. Polin, 194 F.3d 863 (7th Cir. 1999) (payments to those able to influence healthcare choices can violate Anti-Kickback Statute)
- United States v. George, 900 F.3d 405 (7th Cir. 2018) (focus on intent to induce referrals, not formal title)
- United States v. Shoemaker, 746 F.3d 614 (5th Cir. 2014) (statute covers those with leveraged informal influence over healthcare decisions)
- United States v. Miles, 360 F.3d 472 (5th Cir. 2004) (payments for advertising/marketing are not illegal referrals)
- United States v. Patel, 778 F.3d 607 (7th Cir. 2015) (highlighting physicians’ unique gatekeeping role for referrals)
- United States v. Borrasi, 639 F.3d 774 (7th Cir. 2011) (affirming conviction of physician for accepting kickbacks for referrals)