By: Christopher Parrella, Esq., CPC, CHC, CPCO
Parrella Health Law, Boston, MA.
A Health Care Provider Defense and Compliance Firm

In a significant decision for healthcare marketing and fraud enforcement, the Seventh Circuit Court of Appeals reversed the criminal conviction of Mark Sorensen, owner of SyMed Inc., who had been found guilty of violating the federal Anti-Kickback Statute (AKS). The court concluded that Sorensen’s payments to advertising firms and a manufacturer did not constitute illegal “referrals” under the statute. This case sets a high bar for prosecutors and offers welcome clarity to providers and vendors navigating permissible marketing relationships.

The Business Model That Triggered Federal Charges

Sorensen’s company sold orthopedic braces to Medicare patients. To market these devices, he worked with advertising agencies that generated leads from potential patients. When a lead came in, the agencies would obtain consent and send prefilled prescription forms bearing SyMed’s logo to the patient’s physicians. Only when the doctors signed and returned these forms would braces be shipped, and billing to Medicare would be initiated.

That crucial step—the doctor’s independent decision—formed the backbone of Sorensen’s defense.

Despite this separation between marketing and medical decision-making, a federal jury convicted Sorensen of conspiracy and three counts of paying kickbacks. The government argued he had effectively “paid for referrals” of Medicare patients through a profit-sharing arrangement that compensated marketers and manufacturers based on the volume of resulting sales.

Seventh Circuit Draws a Clear Line: Advertising ≠ Referrals

The appellate court disagreed with the government’s interpretation, finding the evidence legally insufficient to support the convictions. In its April 2025 opinion, the court clarified that the Anti-Kickback Statute is aimed at payments intended to influence healthcare decision-makers—not payments to advertisers or vendors who have no control over clinical judgment.

Judge David Hamilton, writing for the court, emphasized that the marketers had no “fluid, informal power and influence” over physicians. In fact, most physicians ignored the prefilled prescription forms—80% of those sent by one agency were never signed. The judges noted that the independence of the physician was the very factor that immunized Sorensen’s business model from AKS liability.

The court distinguished this case from others where providers paid intermediaries with direct influence over medical decisions—such as home health recruiters with relationships to referring physicians. Here, Sorensen paid marketers to generate interest, not to sway physician judgment.

Why It Matters

This ruling reins in the DOJ’s attempts to stretch the AKS to include indirect marketing practices and clarifies that lawful advertising does not automatically equate to kickback-fueled referrals. Providers can—and often must—rely on marketing partners to reach eligible patients. As the court acknowledged, this is not inherently problematic unless those partners are in a position to improperly influence medical decisions.

This decision is a reminder that aggressive prosecution theories can falter when the facts and the statute’s language don’t align. It’s also a signal to compliance officers and defense counsel: if your marketing partners don’t control medical decision-making, and if you’re not paying providers to steer patients, your arrangements may be compliant, even if compensation is percentage-based.

Final Takeaway

The Sorensen reversal is a big win for healthcare advertisers, DME suppliers, and compliance lawyers alike. It restores the proper scope of the Anti-Kickback Statute and affirms that lawful marketing, however robust, isn’t a crime. As always, if you have questions or need guidance navigating marketing relationships or the AKS, contact Parrella Health Law at 857-328-0382 or email Chris directly at cparrella@parrellahealthlaw.com.