False Claims Act (FCA) practitioners have been closely watching cases in which courts address the causation requirement in FCA actions based on Anti-Kickback Statute (AKS) violations.
As we've covered, the question is, what causal link must the government or a relator prove between the alleged AKS violation and the allegedly false claim for payment? This issue is important given the government's and relators' heavy use of AKS-based FCA claims. Appellate courts are divided:
- The Sixth and Eighth Circuits held in U.S. ex rel. Martin v. Hathaway and U.S. ex rel. Cairns v. D.S. Medical LLC, respectively, that but-for causation is required.
- The Third Circuit, on the other hand, held in U.S. ex rel. Greenfield v. Medco Health Solutions that a direct causal link is not required.
The First Circuit has been expected to weigh-in on this split. Last year, appeals involving this issue were filed in both United States v. Teva Pharmaceuticals USA and United States v. Regeneron Pharmaceuticals.
Teva recently moved to hold its appeal in abeyance pending settlement discussions with the government, noting it was "optimistic" about a resolution. On June 20, the First Circuit granted Teva's motion, pausing the appeal for an indefinite time.
As of now, the Regeneron appeal is unaffected by this change and is scheduled for oral argument on July 22. The district court in that case sided with the Sixth and Eighth Circuits, holding that but-for causation is required.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.