More Disagreement About The Causation Standard For AKS Cases Under The FCA

• Jurisdiction: United States,Federal
• Law Firm: Arnold & Porter
• Subject Matter: Food, Drugs, Healthcare, Life Sciences, Criminal Law, White Collar Crime, Anti-Corruption & Fraud
• Author: Mr Manvin Mayell
• Published date: 25 July 2023

At Qui Notes, we have been keeping a close eye on decisions regarding the showing required for a claim to be false because it "resulted from" a violation of the Anti-Kickback Statute (AKS). Specifically, we blogged about recent decisions by the Sixth Circuit and the Eighth Circuit holding that "but-for" causation between an alleged kickback and a specific claim is necessary to establish liability under the FCA for a claim to have "resulted from" an alleged kickback. At the time, we noted that how widely those decisions would be followed by other courts would have significant impact on FCA cases based on alleged kickbacks in which the government usually alleges a "taint" theory based on little more than a temporal relationship between an alleged kickback and the submission of a claim.

Last week, a Massachusetts district court ruled on dueling summary judgment motions of the government and defendant in United States v. Teva Pharm. USA Inc., Civ. Act. No. 20-11548-NMG, 2023 WL 4565105 (D. Mass. July 14, 2023) rejecting defendant's argument to apply the "but-for" causation standard to the government's claim that co-pay subsidies resulted in false claims to Medicare. In Teva, the defendant moved for summary judgment, relying on the Sixth and Eighth Circuit causation standard, claiming that the government had no evidence of but-for causation between its payments for co-pay assistance and claims submitted to Medicare. On the flip side, the government moved for partial summary judgment arguing against a "but-for" causation standard.

The district court ruled in Teva that "[t]he government need not prove 'but for' causation." Rather, the court relied on an amorphous standard in a First Circuit case holding that there needs to be a "sufficient causal connection" between an AKS violation and claim. Guilfoile v. Shields, 913 F.3d 178, 190 (1st Cir. 2019). Significantly, the First Circuit did not explain what would make a causal...