Key Takeaways:
- The First Circuit joined the Sixth and Eighth Circuits in holding that for a violation of the Anti-Kickback Statute (AKS) to automatically trigger False Claims Act (FCA) liability, the AKS violation must be the "but-for" cause of the submitted claim.
- Direct FCA liability for AKS violations in the First Circuit will now require proof that the alleged false claims would not have been paid for by the federal government absent the alleged kickback.
- Nonetheless, contracting entities, and particularly healthcare providers, must remain vigilant to prevent AKS violations. Beyond the statute's wide criminal reach, civil FCA liability remains available through false-certification theories, including the far-reaching "implied false certification" variety.
On February 18, 2025, the First Circuit Court of Appeals issued its decision in U.S. v. Regeneron Pharmaceuticals, ruling that the Anti-Kickback Statute ("AKS") requires the government to prove that an AKS violation was the but-for cause of any false claims submitted to federal healthcare programs in order for that violation to give rise to automatic False Claim Act ("FCA") liability. In doing so, the First Circuit deepened an existing circuit split and the ensuing uncertainty for both providers and government healthcare programs. The Third, Sixth, and Eighth Circuits had already weighed in—reaching varying conclusions—setting up a split potentially ripe for certiorari and Supreme Court resolution.
Background: The Statute and Circuit Split
The Anti-Kickback Statute
The AKS is a criminal statute located within the U.S. code chapter dedicated to Federal healthcare programs. It prohibits kickbacks meant "to induce" the recipient "to purchase, lease, order ... or recommend purchasing, leasing, or ordering any ... item" reimbursable by "a Federal health care program." 42 U.S.C. § 1320a-7b(b)(2). It also prohibits kickbacks to induce referrals payable by Federal healthcare programs, id., as well as solicitation or receipt of kickbacks for either referral or provision of services and goods, id. § 1320a-7b(b)(1).
But in addition to direct criminal liability, in 2010 Congress amended the AKS such that it now also provides for civil liability through the False Claims Act. The 2010 Amendments provide that "a claim that includes items or services resulting from a violation of this section constitutes a false or fraudulent claim for purposes of [the FCA]." Id. § 1320a-7b(g). While AKS violations could previously support FCA liability where a claim for government payment falsely certified compliance with the AKS as a condition of payment, this change made that liability more direct, removing the need for any certification element in at least some cases.
The dispute at issue in Regeneron concerns the degree of causation required by this automatic civil-liability provision: What does the act mean by a claim "resulting from" an AKS violation?
Government's Position: The "Exposure" Test
The government's favored position requires a lesser showing than but-for causation. The Third Circuit was the first to weigh in on this debate when it endorsed this view in, U.S. ex rel. Greenfield v. Medco Health Solutions Inc., 880 F.3d 89, 100 (3d Cir. 2018). That court relied heavily on the legislative history and purpose of the AKS—and particularly of the 2010 Amendments adding § 1320a-7b(g)—to reach this holding.
Specifically, in sponsoring the amendment, Senator Edward Kaufman explained that it was meant to "strengthen[] whistleblower actions based on medical care kickbacks," including by overruling U.S. ex rel. Thomas v. Bailey, 2008 U.S. Dist. LEXIS 91221 (E.D. Ark. Nov. 6, 2008). 155 Cong. Rec. S10,853 (daily ed. Oct. 28, 2009) (Sen. Kaufman). Thomas had concluded that a hospital's reimbursement claims were not false, even though a manufacturer had violated the AKS by paying doctors to use its products, because the submitting hospital had not itself paid or solicited the kickbacks or known about the violation. Sen. Kaufman explained the amendment would clarify "that all claims resulting from illegal kickbacks are 'false or fraudulent,' even when the claims are not submitted directly by the wrongdoers themselves." Id. (emphasis added); see id. at S10,854 (Sen. Leahy, making the same point).
Other courts have since echoed the view that the 2010 Amendments were intended to "strengthen," and make it easier to prove "whistleblower actions based on medical care kickbacks." See Guilefoile v. Shields, 913 F.3d 178, 190-91 (1st Cir. 2019) (commenting on legislative purpose in dicta); U.S. ex rel. Kester v. Novartis Pharmaceuticals Corp., 41 F. Supp. 3d 323, 332-33 (S.D.N.Y. 2014).
Ultimately, then, under the Third Circuit's and government's view in Regeneron, the government must show merely that a patient is "exposed to an illegal recommendation or referral and a provider submits a claim for reimbursement pertaining to that patient." U.S. ex rel. Greenfield v. Medco Health Sols. Inc., 880 F.3d 89, 100 (3d Cir. 2018).
Defendants' Position: But-For Causation Required
More recently, however, courts of appeals have endorsed a more stringent but-for causation standard. This defendant-favored position prevailed in the Eighth Circuit, in U.S. ex rel. Cairns v. D.S. Med. LLC, 42 F.4th 828, 834 (8th Cir. 2022), and the Sixth Circuit, in U.S. ex rel. Martin v. Hathaway, 63 F.4th 1043, 1052 (6th Cir. 2023).
These courts have held that the AKS requires but-for causation, based primarily on a close textual reading of 42 U.S.C. § 1320a-7b(g). The phrase "resulting from," in the Eighth Circuit's view of the statutory text, "imposes ... a requirement of actual causality" and thus "expresses a but-for causal relationship." Cairns, 42 F.4th at 834.
District courts have similarly split on the causation issue, with courts even within the First Circuit reaching opposite conclusions—and a rare intra-circuit split—before the Regeneron appeal. Compare U.S. v. Teva Pharmaceuticals, 682 F. Supp. 3d 142 (D. Mass. 2023) (Gorton, J.) (adopting Greenfield position from Third Circuit), with U.S. v. Regeneron Pharmaceuticals, 2023 U.S. Dist. LEXIS 172618 (D. Mass. Sept. 27, 2023) (Saylor, J.) (adopting but-for causation standard after close textual analysis).
The First Circuit's Regeneron Decision
Causation Analysis
The First Circuit sided with the Sixth and Eighth Circuits, definitively resolving the intra-district split and deepening the lopsided split from the Third Circuit.
The court first addressed its prior dicta in Guilfoile v. Shields, 913 F.3d 178 (1st Cir. 2019), which had cited the Third Circuit Greenfield decision approvingly in referring to "a sufficient causal connection between an AKS violation and a claim submitted to the federal government." Id. at 190. The Regeneron court dismissed this approving citation as non-controlling, particularly because Guilfoile directly addressed only a limited, separate issue of pleading standards for an FCA retaliation claim.
The court then proceeded to examine the statutory language "resulting from," and agreed with the Sixth and Eighth Circuits that in accordance with Supreme Court precedent in other contexts, this language "imposes . . . a requirement of actual causality," and that the default standard is "a requirement of but-for causation." Burrage v. United States, 571 U.S. 204, 211 (2014).
The government's arguments that textual and contextual factors should counsel deviation from this standard, as applied to the AKS, failed to persuade. First, the court disagreed that the breadth of the AKS's criminal standards should automatically counsel a loose interpretation of the additional causation element for civil liability. Second, the court was unconvinced by the legislative history of Sen. Kaufman's remarks, because the 2010 Amendments would still have satisfied the apparent purpose of closing the gap identified by Sen. Kaufman in the Bailey case, even with a but-for standard. In that case, the hospital certified AKS compliance "to the best of [its] knowledge," which was not false. But under even a but-for reading of the 2010 Amendments, the hospital's claims would nonetheless give rise to per se FCA liability, because they were caused by a physician's kickbacks, regardless of the nature of the hospital's certification.
Notably, the court recognized the risk of overbroad FCA claims in two contexts.
- First, it stated that the but-for standard is appropriate, in part, because these cases can be pursued by whistleblowers without any affirmative government approval—implicitly recognizing the expansive reach of some adventurous relators' claims.
- Second, the court similarly recognized that the difficulty of proving why a physician prescribed a given drug is not a reason to adopt a lower standard—the government must do its work to support FCA penalties with respect to but-for causation, as with other FCA elements, like scienter.
Caution: False-Certification Theories Remain Viable
Finally, the court addressed—and reaffirmed—the availability of "false certification" theories to bring FCA claims based on AKS violations.
Compliance with the AKS is recognized as a precondition for payment under federal healthcare programs. Historically, then, the government had successfully argued before the 2010 Amendments that a violation of the AKS can give rise to FCA liability when a claim falsely certifies compliance with all material conditions of payment. False certification can be express, or, under the variety of the theory ratified by the Supreme Court in Universal Health Services, Inc. v. United States, 579 U.S. 176, 190 (2016), implied, when a healthcare provider submits a claim with specific representations about the goods or services provided but misleads the government by failing to disclose noncompliance with material requirements.
The Regeneron court recognized the availability of false certification theories, but found no inconsistency with an added causation element that applies only for the per se form of liability added by the 2010 Amendments; these are simply separate types of false claims. One is false per se because of its source in an AKS violation (regardless of any certification), while the other is false because of the certification (regardless of causation). Thus, contracting entities, and particularly healthcare providers, remain subject to expansive liability under false-certification theories without any causal nexus.
Even before the Regeneron decision, the government appeared to have begun pivoting away from the legal quagmire presented by the 2010 Amendments and returning to the false-certification theory of liability, as evidenced in its successful arguments in U.S. ex rel. Fesenmaier v. Cameron-Ehlen Group Inc., 2023 U.S. Dist. LEXIS 788 (D. Minn. Jan. 4, 2023) and U.S. ex rel. Heller v. Guardian Pharm. Of Atlanta, LLC, 2024 U.S. Dist. LEXIS 4157 (N.D. Ga. Jan. 9, 2024).
Even with the Regeneron decision in hand, the circuit split remains. Accordingly, the government may choose to seek certiorari in Regeneron. But even if it does not, entities should expect the government to continue to pursue false certification as a more streamlined theory in AKS cases.
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.
