Under the Anti-Kickback Statute, a claim submitted to a federal healthcare program for items or services "resulting from" a violation of the AKS constitutes a false claim under the False Claims Act
On February 18, 2025, the U.S. Court of Appeals for the 1st Circuit issued a highly anticipated ruling interpreting the relationship between the False Claims Act ("FCA") and the federal Anti-Kickback Statute ("AKS"), holding that a "but-for" causation standard applies when determining whether allegedly false claims submitted to government healthcare payors predicated on AKS violations violate the FCA.
As amended in 2010, the AKS specifically provides that a claim for payment submitted to a federal healthcare program for items or services "resulting from" a violation of the AKS constitutes a false or fraudulent claim under the FCA. 42 U.S.C. § 1320a-7b(g). In United States v. Regeneron Pharmaceuticals, Inc., the 1st Circuit evaluated what causation standard is required for a false claim to be "resulting from" an AKS violation and joined the 6th and the 8th Circuits in requiring "but-for" causation. This standard is expected to make it more difficult for plaintiffs to prove FCA claims arising from alleged improper kickbacks.
Federal district courts in the 9th Circuit in recent years have declined to adopt a "but-for" causation standard in kickback cases. See United States v. Pac. Dermatology Inst., Inc., 2024 WL 3086586, at *9 (C.D. Cal. May 16, 2024); United States v. Sutter Health, 2024 WL 4112315, at *6 (N.D. Cal. Sept. 6, 2024); Kuzma v. N. Ariz. Healthcare Corp., 607 F. Supp. 3d 942, 956-57 (D. Ariz. 2022). But Regeneron was closely watched and could be persuasive in future cases in the 9th Circuit.
Here, the government brought FCA claims against Regeneron related to the drug company's contributions (cited as totaling over $60 million) to a foundation that provided copay assistance to patients suffering from neovascular age-related macular degeneration ("wet AMD"). Regeneron manufactures Eylea, one of the few FDA-approved wet AMD drugs. Medicare has spent over $11.5 billion on Eylea since 2013, but the drug's cost requires beneficiaries to pay copays that "routinely exceed $2,000" annually and can deter beneficiaries from using Eylea in the absence of copay assistance.
For purposes of the interlocutory appeal, the government and Regeneron agreed that all or some of the foundation contributions were kickbacks in violation of the AKS. But the parties disputed the applicable causation standard, with Regeneron asserting that if a doctor would have prescribed Eylea regardless of any copay assistance, no false claim "resulted from" the alleged improper kickback.
With minimum per-claim penalties of over $14,000 under the FCA, as well as potential treble damages, Regeneron faced enormous liability given the number of claims for Eylea submitted to government payors depending on the causation standard that the 1st Circuit recognized.
The government argued for an "exposure" standard in accordance with a 2018 ruling by the 3rd Circuit—i.e., "all that is required to prove a causal link … is that a particular patient is exposed to an illegal recommendation or referral and a provider submits a claim for reimbursement pertaining to that patient." But the 1st Circuit agreed with Regeneron and adopted a "but-for" causation standard in line with recent rulings by the 6th and 8th Circuits, concluding that "to treat an AKS violation as a false or fraudulent claim under the FCA, the government must prove that the AKS violation was a but-for cause of the false claim."
The court referenced the "default presumption" that "resulting from" language in a statute requires "actual causality" or "but-for" causation. The court then concluded that the AKS did not support a contrary interpretation to the presumptive "but-for" standard based on either its text or the context of the AKS's statutory scheme. The court expressed that under the government's laxer exposure standard, false claims for Eylea "can 'result from' a kickback even if that kickback had no causal impact whatsoever on a patient's decision to opt for Eylea." While something short of "but-for" causation may be permissible, Supreme Court precedent "provide[s] no license to read 'resulting from' as requiring no actual causality whatsoever."
The court emphasized that FCA claims based on the alleged false certification of compliance with a material statutory, regulatory, or contractual requirement remain viable and are a "separate track" from FCA liability predicated on claims "resulting from" a violation of the AKS with no certification requirement. As the court summarized these two theories of FCA liability, "[i]f a medical provider accepts kickbacks, and then personally represents compliance with the AKS, then FCA liability can flow from that false representation" under a false-certification theory. And even if the provider made no such certification, the claims still would be "per se false" "if the government can show that the illegal kickback was a but-for cause of the submitted claim."
The court recognized that a "but-for" causation standard would make it more difficult to prove an FCA claim, with the government arguing that it would be "difficult" to prove why a doctor prescribed a particular drug, and whether the prescription resulted from an unlawful kickback. "We do not doubt that such proof may be more difficult to nail down in some cases."
But the court added, "the same could be said about the requirement to prove other elements of a successful action under the FCA," including scienter requirements as to the defendant's knowledge in submitting allegedly false claims.
In joining the 6th and 8th Circuits, the 1st Circuit's ruling reflects a growing consensus recognizing a "but-for" causation standard for FCA claims predicated on AKS violations. Whether the Supreme Court accepts review to resolve the issue and circuit split remains to be seen, but a "but-for" standard is expected to make it more difficult for plaintiffs to pursue FCA claims based on AKS violations.
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