First Circuit upholds but-for causation standard for False Claims Act cases premised on Anti-Kickback Statute violations

In United States v. Regeneron Pharms., Inc., the government alleges that Regeneron violated the FCA by way of the AKS when it provided copay assistance to a third-party patient assistance foundation.¹ The government contended that assistance to the foundation supposedly induced providers to prescribe Eylea, Regeneron’s macular degeneration drug. The issue in this interlocutory appeal stems from a 2010 amendment to the AKS, which provides a “claim [for payment by a federal healthcare program] that includes items or services resulting from a violation of [the AKS] constitutes a false or fraudulent claim for purposes of” the False Claims Act.² According to the government, when doctors filed Medicare claims for Eylea patients receiving copayment assistance, those claims “resulted from” a violation of the AKS whether or not those claims would have been made even if Regeneron had not provided co-pay assistance to the independent foundation. Regeneron countered that an AKS violation must be a but-for cause of the challenged claim; if a doctor would have bought (and sought reimbursement for) Eylea anyway – regardless of any alleged kickback – then the subsequent Medicare claim could not have “result[ed] from” Regeneron's allegedly illicit payments.³

The First Circuit relied on the text and context of the statute in affirming the district court’s decision that “resulting from” in the 2010 amendment imposes a but-for causation standard. The Court began its analysis by examining the plain text of the AKS, finding that “there is no language in the 2010 amendment that by itself runs counter to the presumption that ‘resulting from’ calls for proof of but-for causation.”⁴ Next, the Court reviewed – and rebuffed – the government’s contextual arguments. For example, the government argued that because the AKS’s criminal provisions do not mandate proof that reimbursement would not have occurred absent kickbacks, the same standard should supposedly apply in the civil (FCA) context. The Court disagreed, explaining that “the criminal provisions of the AKS serve a different purpose than the provisions linking an AKS violation to FCA falsity.”⁵ The Court similarly was unmoved by the government’s citation to the legislative history, and found “no convincing ‘textual or contextual’ reason to deviate from the default presumption” that the term resulting from imposes a but-for causation standard.⁶

In so holding, the First Circuit joined the Sixth and Eighth Circuits which had previously held that but-for causation is required to establish FCA liability based upon alleged violations of the AKS.⁷ The First Circuit’s decision signals a clear trend toward the but-for causation interpretation of the 2010 AKS amendment. Of the four circuit courts to examine the issue, only one favored a looser approach to causation back in 2018;⁸ every circuit court to take up the matter since then has held otherwise. It is possible that the Supreme Court may weigh in on this issue down the road, though the three-to-one split leaves open the strong possibility that a consensus will form without the high Court’s intervention. The Supreme Court recently denied certiorari on October 2, 2023, in the Sixth Circuit case United States ex rel. Martin v. Hathaway.

Authored by Michele Sartori, Hunter Davis, Stephanie Walsh, Gejaa Gobena, and Emily Lyons.