On Feb. 18, 2025, the U.S. Court of Appeals for the First Circuit adopted the “but for” causality standard for violations of the federal Anti-Kickback Statute (AKS) that give rise to violations of the federal False Claims Act (FCA). In United States v. Regeneron, the First Circuit held that for a violation of the AKS to constitute a false claim subject to the FCA, the government must demonstrate that the illicit kickback was the “but for” cause of a submitted claim.
This holding ended an intra-circuit split between two district court opinions including the lower court’s ruling in this case and aligns the First Circuit with the Sixth and Eighth circuits’ interpretations. The holding leaves the Third Circuit as the only circuit allowing the government to rely on a “causal link” standard between an AKS violation and the submission of a false claim subject to the FCA.
Circuit Split
The Patient Protection and Affordable Care Act (ACA) amended the AKS in 2010 to add a provision stating that “a claim that includes items or services resulting from a violation of [the AKS] constitutes a false or fraudulent claim for purposes of” the FCA. A question arose as to what “resulting from” means as a causality standard for AKS-based FCA cases. In 2018, the Third Circuit held in DiFiore v. CSL Behring that it is sufficient for the government to show only that the kickback payment was made in the chain of events leading to the false claim. The Third Circuit is the only circuit to apply this standard.
The First Circuit joins the Sixth and Eighth circuits in holding that “resulting from” means a “but for” connection. The government must show that a claim submitted to a federal healthcare program would not have been submitted but for the payment of a kickback specifically related to that claim. This standard is more rigorous and may potentially bar relators and the government from bringing claims under the FCA.
First Circuit Holding in Regeneron
In United States v. Regeneron, the government alleged that Regeneron Pharmaceuticals directed donations to the Chronic Disease Fund, a charitable organization, to help cover patient co-payments for the Regeneron drug Eylea. The government alleged that Regeneron’s donations constituted a knowing inducement of the prescription of Eylea in violation of the AKS. The government claimed that any time a Medicare beneficiary received the benefit of co-pay assistance from the Chronic Disease Fund to purchase Eylea and a claim for the drug was submitted to Medicare for payment, the claim was false in violation of the FCA.
The First Circuit directly addressed the district courts’ interpretations of “resulting from” in the AKS, resolving two district court opinions that conflicted within the circuit. The court noted that statutes that use “resulting from” usually impose a requirement of actual causality. Thus, without textual or contextual indications that support an alternative approach, a “but for” meaning was the appropriate standard under the AKS.
The First Circuit found no contextual reasons for the court to depart from the “but for” standard. It rejected the government’s arguments that the statutory amendment in 2010 built on the AKS scheme and denied the imposition of criminal liability when such standard did not exist. The First Circuit reasoned that Congress could establish new pathways for liability under AKS without connecting to the previous scheme. The First Circuit found that the AKS’ statutory history does not indicate any intention to depart from a direct causation standard because there was no convincing history to demonstrate that Congress had different intentions. Finally, the court rejected the contention that a “but for” standard would create an impossible standard since the 2010 amendment created a pathway that does not require proof of a false certification, and held that the “but for” standard is not more strenuous than other elements under the FCA.
Split Moving Forward
The First Circuit’s holding sets a clear split between the First, Sixth and Eighth circuits and the Third Circuit in the interpretation of the “resulting from” language that ties AKS violations to the FCA. The “but for” standard in the First, Sixth and Eighth circuits creates a more stringent standard for relators and the government, requiring complainants to demonstrate the alleged false claim would not have been submitted but for a violation of the AKS. It remains unclear if or when the U.S. Supreme Court will have the opportunity to resolve the circuit split, after having previously denied certiorari to the Sixth Circuit’s decision in U.S. ex rel. Martin v. Hathaway in 2023. Beyond potential judicial review, there also could be legislative action amending the FCA to clarify the AKS causation standard.
McGuireWoods will continue to monitor developments in this circuit split.