"The causation element under the False Claims Act is a matter of significant controversy being adjudicated in federal courts. The matter arises when claims are submitted for government reimbursement for items or services rendered or provided under federal health-care programs, in which a violation of the Anti-Kickback Statute is alleged.

On interlocutory appeal, the US Court of Appeals for the First Circuit in United States v. Regeneron on Feb. 18 decided the burden of proof the government must meet for the causation element under the FCA. A three-judge panel ruled the government must meet a “but-for” proof standard, adding to a circuit split.

The FCA specifies elements that must be proven for there to be a violation of the AKS. In 2010, Congress amended the statute to explicitly provide that, for the causation element under the FCA, a Medicare claim for payment for items and services “resulting from a violation” of the AKS constitutes a false claim under the FCA, creating a per se rule of falsity.

There is a circuit split about the meaning of “resulting from” in the text of the 2010 amendment. As pertinent here, the government filed a lawsuit involving the amendment against Regeneron Pharmaceuticals Inc. in the US District Court for the District of Massachusetts.

In United States v. Regeneron, the government alleged violations under the FCA related to Regeneron’s marketing of its drug Eylea. The government contended that Regeneron funded a charity to provide copay subsidies to Medicare Part B beneficiaries who were prescribed Eylea. It alleged that the funding’s purpose was to induce physicians to prescribe Eylea, violating the AKS. Claims submitted by physicians to the government were viewed as false, violating the FCA.

On cross-motions for summary judgment, the district court construed the text “resulting from” under the 2010 amendment to the AKS. The court said the government must meet a but-for standard to prove causation—but for the illicit inducement, the claim for payment wouldn’t have been submitted. The government advocated for a more lenient standard—whether there was a “causal connection” between the kickback and a claim for payment.

With the First Circuit decision on interlocutory appeal, the causation standard under the FCA in that circuit is now a but-for standard.

Read more here...

This article was originally published in Bloomberg Law.