On July 26, 2022, the Eighth Circuit raised the bar for plaintiffs seeking to allege a violation of the False Claims Act (“FCA”) predicated on the Anti-Kickback Statute (“AKS”). Under this decision, the plaintiff must prove “but for” the illegal kickbacks, the defendants would not have submitted particular claims for reimbursement. United States ex rel. Cairns v. D.S. Medical, LLC, 2022 WL 2930946 (8th Cir. July 26, 2022).
In D.S. Medical, the government alleged that the defendant neurosurgeon favored certain spinal implants distributed by a company wholly owned by his fiancée. Despite the defendant neurosurgeon being her only large customer, the arrangement was quite lucrative — the fiancée made more than $1.3 million in commissions in a single year from a single manufacturer. On the other hand, the neurosurgeon –– received an offer to purchase company stock from the manufacturer.
The government alleged three claims under the FCA, one of which arose under the AKS. Under the 2010 amendment to the AKS, the statute requires that a claim “result from” an AKS violation to constitute a false claim under the FCA. See 42 U.S.C. 1320a-7b(g). However, the statute does not define what “resulting from” means, leading to a circuit split of statutory interpretation.
Here, the Eighth Circuit relied on a plain reading of the statute. Citing Burrage v. United States, 571 U.S. 204 (2014), the court identified that the Supreme Court had previously addressed this issue in an unrelated statute, and interpreted the phrase “results from” to “[require] proof that the harm would not have occurred in the absence of — that is, but for — the defendant’s conduct.” In reaching this conclusion, the court declined to follow United States ex rel. Greenfield v. Medco Health Solutions, Inc., 880 F.3d 89 (3rd Cir. 2018), where the Third Circuit applied a lower standard requiring only “some connection” between an illegal kickback and a claim for reimbursement. In rejecting this approach, the Eighth Circuit concluded that the AKS “resulting from” language creates a but-for causal requirement between an AKS violation and the “items or services” in a claim for reimbursement. Thus, the court found that “the government had to prove here that the defendants would not have included particular ‘items or services’ absent the illegal kickbacks.” Because the district court never instructed the jury on but-for causation, the Eighth Circuit remanded.
Cases interpreting the 2010 amendment to the AKS have stated that the alleged kickback must bear some relation to the submission of a claim for reimbursement. The court in D.S. Medical goes further in holding that the plaintiff must prove a but-for causation. That is, absent the alleged illegal kickback, the defendant would not have submitted the claim for reimbursement. This standard appears in line with the goal and purpose behind the AKS, which is to prevent healthcare providers from paying for referrals. However, the majority of circuits have not addressed this issue so it will be interesting to see whether courts in future cases follow the reasoning in this case.
