Federal Court Orders New Trial in Anti-Kickback Case, Emphasizing Physician Independence and Proof of Improper Influence

A federal judge in the Northern District of Texas has granted a new trial to a laboratory owner convicted on healthcare kickback, conspiracy, and money-laundering charges, finding that the weight of the evidence did not support the jury’s conclusion that the defendant intended to improperly influence healthcare decisionmakers.

The September 18, 2026, decision in United States v. Keith J. Gray is notable for its analysis of what the government must prove in a criminal Anti-Kickback Statute (“AKS”) case involving healthcare marketers and, in particular, the significance of physicians retaining independent authority over whether services are actually ordered.

The Government’s Case

Gray controlled several laboratories that performed cardiovascular genetic testing. According to the evidence at trial, his laboratories hired American Health Screening (“AHS”) to market the testing to Medicare beneficiaries. AHS telemarketers screened beneficiaries and, when a beneficiary qualified, another company sent a pre-filled testing order to the beneficiary’s physician. If the physician signed the order, the specimen was collected, the laboratory performed the testing, and claims were submitted to Medicare.

Following a seven-day trial, a jury convicted Gray of conspiracy, multiple AKS violations, and monetary transactions involving criminally derived property.

Applying the standard under Federal Rule of Criminal Procedure 33, which permits a trial judge to independently weigh the evidence and assess witness credibility, the court found that the evidence weighed so heavily against the verdict that allowing it to stand would constitute a miscarriage of justice. The judge noted that, in more than 16 years as a federal and state trial judge, this was the first time she had granted a new trial.

The Relevant Decision-Maker Test

A central issue was whether Gray intended to improperly influence the person making the relevant healthcare decision. Relying on recent Fifth Circuit precedent applying the so-called “relevant decision-maker test,” the court explained that the government was required to show an intent to improperly influence those making healthcare decisions for patients. The court concluded that, in this case, the relevant decisionmakers were the beneficiaries’ physicians, not the marketing company.

The evidence showed that physicians retained the ability to approve or reject the genetic testing orders. Indeed, approximately 80% to 90% of the order forms sent to physicians were never signed. One physician declined to authorize testing after reviewing the patient’s record, while another testified that he had signed the form without sufficiently reviewing it. The court viewed those facts as substantial evidence that physicians—not the marketers—made the ultimate decision whether testing would occur.

That distinction became critical to the court’s AKS analysis.

Compensation Structure Alone Was Not Enough

The government also relied on evidence that Gray paid AHS on a per-sample basis. But the court emphasized that the structure of a marketing compensation arrangement, standing alone, does not establish an illegal kickback.

The court noted that the government had not shown a meaningful relationship between Gray or AHS and the physicians beyond sending them the testing materials. Nor was there evidence that the physicians themselves received financial incentives or other benefits to induce them to order testing.

The court also found significant that the pre-filled forms expressly required physician approval and characterized the physician’s signature as a certification of medical necessity. The accompanying materials instructed physicians to confirm the diagnostic codes rather than simply accept them. In the court’s view, this supported the conclusion that physicians were expected to exercise independent medical judgment.

The laboratory also had compliance procedures intended to prevent testing without a physician order. According to testimony credited by the court, specimens could be rejected during compliance review, and Gray did not direct employees to override those rejections.

Taken together, the court concluded that the evidence weighed heavily against finding that Gray intended to improperly influence the physicians and therefore ordered a new trial on the substantive kickback counts.

The Conspiracy Charges Also Failed Under Rule 33

The court reached a similar conclusion regarding the conspiracy charge.

The government argued, among other things, that certain agreements and payments were designed to conceal the true compensation arrangement. But the court found substantial credibility problems with two cooperating witnesses whose testimony supported that theory, including the incentives created by their plea agreements.

The court also found insufficient evidence that Gray knowingly joined an agreement whose purpose was to submit claims for medically unnecessary testing. Significantly, the government’s own medical expert testified that the physician—not the laboratory—was responsible for determining whether the testing was medically necessary.

Because the conspiracy and kickback counts were subject to a new trial, the court likewise ordered a new trial on the related money-laundering counts, which depended on those offenses as the alleged source of criminal proceeds.

Why This Matters

The decision does not establish that per-patient, per-lead, or per-specimen healthcare marketing arrangements are permissible. Those arrangements can present significant AKS risk, and the legality of any particular arrangement remains highly dependent on its structure and facts.

But Gray illustrates an increasingly important issue in criminal AKS cases: identifying the actual relevant decision-maker and determining whether the defendant sought to improperly influence that person.

For laboratories and other healthcare providers using outside marketing organizations, the opinion also underscores the potential importance of preserving genuine physician independence. Documentation requiring the physician to determine medical necessity, meaningful opportunities to reject proposed services, and internal controls preventing services from being performed without appropriate physician authorization may become important evidence if the government later challenges a marketing arrangement.

The decision also serves as a reminder that compensation methodology is not necessarily the end of the AKS analysis. Courts may look beyond the payment formula to determine who actually controlled the healthcare decision and whether the evidence demonstrates an intent to improperly influence that decision.

GWB represents healthcare providers in connection with government investigations and enforcement actions. If you need assistance with such a matter, contact us today.