Frequently, hospitals seek to purchase physician practices as a means to
retain existing referrals or to attract new referrals of patients to the hospital.
Such purchases implicate the anti-kickback statute because the remuneration
paid for the practice can constitute illegal remuneration to induce the
referral of business reimbursed by the Medicare or Medicaid programs.

Specific items that we believe would raise a question as to whether
payment was being made for the value of a referral stream would include,
among other things:

• payment for goodwill,
• payment for value of ongoing business unit,
• payment for covenants not to compete,
• payment for exclusive dealing agreements,
• payment for patient lists, or
• payment for patient records.

Payments for the above types of assets or items are questionable where
there is a continuing relationship between the buyer and the seller and the
buyer relies (at least in part) on referrals from the seller.

We believe a very revealing inquiry would be to compare the financial
welfare of the physicians involved before and after the acquisition … If the
economic position of these physicians is expected to significantly improve as a
result of the acquisition, it is likely that a purpose of the acquisition is to offer
remuneration for the referrals which these physicians can make to the buyer.