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LEGAL UPDATE 3 8 O U T P AT I E N T S U R G E R Y M A G A Z I N E O N L I N E | D E C E M B E R 2 0 1 4 claimed this transaction violated the federal Anti-Kickback Statute because the physicians' purchase price was less than fair market value and as such was a disguised kickback in exchange for their anticipated patient referrals to the ASC. Mr. Simmons noted that the physicians immediately enjoyed a 50% return on their investments. Since their referrals included Medicare patients, his lawsuit argued, the cheap buy-ins also could be consid- ered a form of defrauding the federal insurance program. While Meridian aggressively denied any wrongdoing in its syndication, the company paid handsomely — $3.32 million in restitution to the U.S. government ($913,000 of which went to Mr. Simmons) and $1.8 mil- lion in court costs — to make the matter disappear, just 2 weeks before its scheduled trial date in a Tennessee federal court. The federal Anti-Kickback Statute is exceedingly broad in scope, and many normal transactions can easily find themselves under scrutiny. The ASC safe harbors later added to it create further gray- ness in discerning exactly how a transaction might legitimately work. ASC owners and operators are not defenseless against whistleblow- ers' allegations, although taking a few precautionary steps can help to prevent them. The best defense is documentation. Those facility owners who undertake physician buy-ins without fair market value support do so at their own peril. In order to defend against a potential kick- back claim, ownership interests should be sold at fair market value, with supportive market guidance from a reputable valuation company included in the file, particularly if the sale price is much lower than recent market indicators (as it was in the Meridian case). Many owners struggle with how to price their shares, but there are solid valuation principles that can be relied upon to justify different purchase prices 1