A recent case in the Third Circuit, which includes Pennsylvania, New Jersey and Delaware, has increased the sentencing exposure of physicians who have been convicted of Medicare/Medicaid fraud. In United States v. Babaria, 14-2694 (3d Cir. 12-31-14), the Court held that a physician who was the medical director of a diagnostic testing and imaging company abused a position of trust under the Federal Sentencing Guidelines when he illegally paid physicians kickbacks to refer patients to his company and then billed Medicare for the diagnostic services provided, even though the services were medically necessary. The Court reasoned that the defendant’s certification to Medicare of compliance with the anti-kickback statute, when coupled with the his status as a physician, which made of the unlawful kickbacks difficult to detect, justified the increased sentence under abuse of trust provisions of U.S.S.G. 3B.1.3. The Court cited with approval an 11th Circuit case, United States v. Liss, 265 F.3d 1220 (11th Cir. 2001) which held that physicians who are recipients of kickbacks likewise violate a position of trust with respect to Medicare and, accordingly, face a more severe sentence. This is significant because it appears that the Third Circuit would have applied the abuse of trust provision even if the physician had not been the director of the diagnostic company.