This post is co-authored with Health Care Enforcement + False Claims Act Litigation team members Theresa Lane, Edward Heath, and Seth Orkand.
In a much-anticipated decision, the First Circuit unanimously ruled the government and relators must prove that a violation of the federal Anti-Kickback Statute (AKS) was the “but-for” cause of a false claim under the False Claims Act (FCA). By adopting the more stringent “but-for” causation standard, the First Circuit now joins the Sixth and Eighth Circuits, forming a majority regarding the applicable causation standard.
A victory for laboratories and healthcare entities, this decision sets a higher standard for relators and the government to prove FCA claims predicated on AKS violations. Notably, the First Circuit’s decision affirms the causation standard Judge Patti B. Saris recently applied in OMNI Healthcare, Inc. et al. v. MD Spine Solutions LLC when granting the defendant’s summary judgment motion.[1] Robinson+Cole represented MD Spine Solutions LLC.
In U.S. v. Regeneron Pharmaceuticals, Inc., the government alleged Regeneron improperly funneled over 60 million dollars to the Chronic Disease Fund (CDF) to subsidize patient copays for Eylea, a drug manufactured by Regeneron.[2] Specifically, the government argued that the CDF payments were meant to incentivize physicians to write more prescriptions of Eylea, which Regeneron would submit for reimbursement under the Medicare Part B program.[3] The government claimed Regeneron’s purported kickback scheme caused false claim submissions.[4] On summary judgment, Chief Judge Dennis F. Saylor concluded that “but-for” causation was the proper standard to determine whether the government could show that Regeneron’s donations resulted in false claims, creating a split among judges in the District of Massachusetts.[5]
On appeal, the First Circuit was asked to determine the proper standard of causation required to turn an AKS violation into a per se false claim under the FCA, thus resolving the intra-district split. In dispute was the meaning “resulting from” as used in the 2010 amendment to the AKS.[6] The 2010 amendment states that “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 FCA.[7]
The government urged the First Circuit to follow the Third Circuit and adopt the less stringent causation standard. In 2018, the Third Circuit hadf interpreted “resulting from” to mean a plaintiff must show a “causal link” between an illegal remuneration and a subsequent reimbursement claim.[8] Regeneron asserted that “resulting from” required the plaintiff to prove that a kickback actually caused a healthcare provider to prescribe a different treatment, therefore submitting a false claim.[9]
In a 28-page decision released February 18, 2025, the First Circuit agreed with Regeneron and affirmed the district court’s ruling that the government must prove that an AKS violation was the “but-for” cause of the false claim.[10] In reaching this decision, the First Circuit rejected the government’s contention that this issue had already been decided in the circuit.. In Guilfoile v. Shields, [11] the court had stated that “if there is a sufficient causal connection between an AKS violation and [a] claim submitted to the federal government, that the claim is false within the meaning of the FCA” in reference to the 2010 amendment.[12] The government highlighted that the Guilfoile Court cited the Third Circuit’s opinion when making this statement.[13] However, the First Circuit found that its prior dicta in Guilfoile did not control because the court explicitly asserted that “the issue before us is not the standard for proving an FCA violation based on the AKS, but rather the requirements for pleading an FCA retaliation claim.”[14] By determining that Guilfoile did not guide its decision, the First Circuit analyzed the statutory text of the phrase “resulting from” and found that “there is no language in the 2010 amendment that by itself runs counter to the presumption that ‘resulting from’ calls for but-for causation.”[15]
The government next argued that the absence of a required causation standard to establish criminal AKS liability suggested that minimal causation should be required to prove civil AKS liability.[16] Again, the First Circuit remained unpersuaded and concluded that “the criminal provisions of the AKS serve a different purpose than the provisions of linking an AKS violation to FCA falsity.”[17] The court stated, “[c]riminal liability under the AKS exists to protect patients from doctors whose medical judgments might be clouded by improper financial considerations,” whereas “the chief purpose of the FCA’s civil penalties is to provide for restitution to the government of money taken by fraud.”[18] Additionally, the First Circuit noted that because the FCA creates a civil cause of action for private citizens, “it makes sense for the 2010 amendment to render a claim false (for FCA purposes) only when a kickback is the cause of that claim’s submission to the government.”[19]
Finally, the First Circuit indicated that, despite adopting the stricter “but-for” causation standard, plaintiffs are not barred from bringing an FCA case premised on AKS violations when based on a “false certification theory.” Under this theory, it is not the AKS violation that renders the claim false; it is the false representation that there is no AKS violation.[20] The First Circuit clarified the distinction between the separate types of false claims by stating, “[p]ut simply, claims under the 2010 amendment run a separate track than do claims under a false-certification theory.”[21]
The First Circuit’s interpretation of the phrase “resulting from” has significant implications for the government and relators who routinely bring civil actions for damages under the FCA based on AKS violations. In fiscal year 2023, the government settled or had judgments under the FCA exceeding $1.8 billion.[22] Federal agencies recovered over $3.4 billion in restitution and compensatory damages, with relators receiving over $462 million.[23] With the federal appellate courts split (the majority favoring the “but-for” causation standard) and the possibility of the government seeking certiorari from the Supreme Court of the United States in Regeneron, it is likely that, moving forward, the government and relators will heavily rely on the false certification theory in AKS cases rather than attempting to prove the “but-for” causation standard.
[1] OMNI Healthcare, Inc. et al. v. MD Spine Solutions LLC, No. 18-cv-12558, 2025 WL 32676, at *8-9 (D. Mass. Jan. 6, 2025) (concluding that the phrase “resulting from” in the 2010 amendment of the AKS requires a showing of but-for causation).
[2] U.S. v. Regeneron Pharmaceuticals, Inc., No. 20-11217-FDS, 2023 WL 6296393, at *1 (D. Mass. Sept. 27, 2023).
[3] Id.
[4] Id.
[5] Id. at *10-11; cf. U.S. v. Teva Pharmaceuticals USA, Inc., 682 F. Supp. 3d 142, 148 (2023) (rejecting the “but-for” causation standard and holding if there is sufficient casual connection between an AKS violation and a claim submitted to the federal government, that claim is false within the meaning of the FCA).
[6] 42 U.S.C. § 1320a-7b; see U.S. v. Regeneron Pharmaceuticals, Inc., No. 23-2086, at *3 (1st Cir. Feb. 18, 2025).
[7] 31 U.S.C. § 3729-33.
[8] U.S. ex rel. Greenfield v. Medco Health Sols. Inc., 880 F. 3d 89, 100 (3d Cir. 2018).
[9] Regeneron Pharmaceuticals, Inc., No. 23-2086, at *7.
[10] Id. at *8.
[11] Guilfoile v. Shields, 913 F.3d 178 (1st Ct. 2019).
[12] Id. at 190.
[13] Regeneron Pharmaceuticals, Inc., No. 23-2086, at *9.
[14] Id. at *9-10. See also Guilfoile, 913 F.3d at 190.
[15] Regeneron Pharmaceuticals, Inc., No. 23-2086, at *14.
[16] Id. at *17.
[17] Id. at *18.
[18] Id.
[19] Id.
[20] Id. at *20.
[21] Id. at *23.
[22] U.S. Department of Justice and U.S. Department of Health and Human Services, Annual Report of the Departments of Health and Human Services and Justice Health Care Fraud and Abuse Control Program FY 2023, available at https://oig.hhs.gov/documents/hcfac/10087/HHS%20OIG%20FY%202023%20HCFAC.pdf
[23] Id.