Earlier this week, the First Circuit Court of Appeals in Regeneron held that to show falsity in an FCA action premised on an Anti-Kickback Statute (“AKS”) violation, the violation must have been the but-for cause of the submitted claim. See United States v. Regeneron Pharma., Inc., No. 23-2086, 2025 WL 520466 (1st Cir. Feb. 18, 2025). In so holding, the First Circuit joined a circuit split on the meaning of the 2010 AKS amendment providing that claims “resulting from” AKS violations are false for purposes of the FCA (as previously discussed here). Like the First Circuit, the Sixth and Eighth Circuits require but-for causation (as previously discussed here and here). The Third Circuit, meanwhile, requires merely a “link” between an alleged kickback and a subsequent claim.
https://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.png00Jaime L.M. Joneshttps://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.pngJaime L.M. Jones2025-02-21 10:37:522025-02-21 10:38:54First Circuit Joins Sixth and Eighth Circuits in Requiring But-For Causation for FCA Claims Premised on AKS Violations
In a significant opinion, the First Circuit held yesterday that to establish falsity in an FCA action premised on an Anti-Kickback Statute (AKS) violation, “the government must show that an illicit kickback was the but-for cause of a submitted claim.” That determination hinged on the text of the 2010 AKS amendment, which provides that claims “resulting from” AKS violations are false. With this holding, the First Circuit joins the circuit split on what the “resulting from” language requires. The First, Sixth, and Eighth Circuits have adopted the strict but-for standard, while the Third Circuit opted for a much looser approach. We have previously reported on the split here, here, and here. We will follow up with further analysis of the First Circuit’s opinion.
https://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.png00Jaime L.M. Joneshttps://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.pngJaime L.M. Jones2025-02-19 09:19:522025-02-19 09:21:40Joining Circuit Split, First Circuit Adopts But-For Causal Standard for Establishing FCA Falsity Premised on AKS Violations
Embedded in the FY 2025 National Defense Authorization Act, signed into law on December 23, 2024, is a provision that could significantly impact agency enforcement activity: the Administrative False Claims Act (“AFCA”). Enforcement of the federal FCA is currently limited to DOJ and whistleblowers, and agencies lack the right to pursue federal FCA claims directly on their own behalf. But effective after agencies amend their regulations—the AFCA directs them to do by June 23, 2025, although the change in administration may cause delays—each federal agency’s Inspector General can pursue administrative FCA actions for claims aggregating up to single damages of $1,000,000, which are also subject to doubling under the statute (rather than treble damages as under the federal FCA). In addition, agencies can levy civil monetary penalties, subject to yearly inflationary increases. The amount of each per-claim penalty varies by agency but, for example, HHS may impose a penalty of up to $12,800 per claim, in addition to double damages. The AFCA may increase agency appetites to convert administrative self-disclosures, such as those made to HHS-OIG relating to potential violations of the Anti-Kickback Statute, into AFCA actions.
https://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.png00Scott D. Steinhttps://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.pngScott D. Stein2025-01-30 15:11:082025-01-30 15:11:08Federal Agencies Can Now Directly Pursue FCA Cases Up to $1M
Massachusetts recently signed into law House Bill 5159, which includes a strict new rule for investors in Massachusetts health care companies, requiring them to timely disclose FCA violations of their investment entities or face FCA liability themselves. This law imposes FCA liability for a broader range of conduct by investors as compared to the federal False Claims Act, and affected investors should consider whether any operational changes should be made to address the new law.
https://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.png00Jaime L.M. Joneshttps://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.pngJaime L.M. Jones2025-01-21 09:20:312025-01-21 09:20:31Massachusetts Law Imposes FCA Liability on Healthcare Investors For Failures to Disclose
This week DOJ released its annual report on FCA settlements and new cases, available here. Although DOJ trumpeted a record-high number of qui tam cases filed (979) and a near record-high number of settlements and judgements (558), much of this increase in volume appears driven by the ongoing surge of Paycheck Protection Program cases. Healthcare FCA cases remained stable in fiscal year 2024 (“FY2024”) as compared to the prior two years, and associated recoveries were slightly down. Additional trends are outlined below.
Today the Senate Judiciary Committee held a confirmation hearing for Pam Bondi, President-elect Donald Trump’s nominee for Attorney General. During the hearing, Senator Chuck Grassley, a long-time proponent of whistleblowers in general and the FCA in particular, sought and received assurances from Bondi that under her leadership, vigorous FCA enforcement, including through qui tam cases, would continue.
Judge Patti Saris in the District of Massachusetts recently granted a defense motion for summary judgment after concluding that relator failed to show that defendants knowingly submitted medically unnecessary tests or that any false claims were submitted as a result of independent contractor arrangements that allegedly violate the Anti-Kickback Statute (“AKS”). See U.S. ex rel. Omni Healthcare v. MD Spine Solutions, 18-cv-12558 (D. Mass. Jan. 6, 2025). With the latter ruling, Judge Saris joins a growing majority of courts holding that an AKS violation is only a false claim under the FCA if the claim would not have been submitted but for the kickback.
https://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.png00Jaime L.M. Joneshttps://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.pngJaime L.M. Jones2025-01-13 12:02:482025-01-13 12:02:48District Court Allows Summary Judgment on Medically Unnecessary and AKS Arguments, Joins Conversation on AKS Causation Standard
A judge in the Southern District of West Virginia sua sponte requested briefing from the parties to address the impact of the Supreme Court’s decision in Loper Bright Enterprises v. Raimondo on an FCA case to “ensure that the Stark regulatory scheme is consistent with the power given by Congress and the statute as it was signed into law.” See United States ex rel. Liesa Kyer v. Thomas Health Sys., Inc., No. 2:20-cv-00732 (S.D. W. Va.). The order highlights the new opportunities Loper Bright has created for defendants in FCA cases, although the court ultimately dismissed the case on more straightforward 9(b) grounds.
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First Circuit Joins Sixth and Eighth Circuits in Requiring But-For Causation for FCA Claims Premised on AKS Violations
Earlier this week, the First Circuit Court of Appeals in Regeneron held that to show falsity in an FCA action premised on an Anti-Kickback Statute (“AKS”) violation, the violation must have been the but-for cause of the submitted claim. See United States v. Regeneron Pharma., Inc., No. 23-2086, 2025 WL 520466 (1st Cir. Feb. 18, 2025). In so holding, the First Circuit joined a circuit split on the meaning of the 2010 AKS amendment providing that claims “resulting from” AKS violations are false for purposes of the FCA (as previously discussed here). Like the First Circuit, the Sixth and Eighth Circuits require but-for causation (as previously discussed here and here). The Third Circuit, meanwhile, requires merely a “link” between an alleged kickback and a subsequent claim.
(more…)
Jaime L.M. Jones
Chicago
jaimejones@sidley.com
Brenna E. Jenny
Washington, D.C.
bjenny@sidley.com
Scott D. Stein
Chicago
sstein@sidley.com
Joseph R. LoCascio
Chicago
joseph.locascio@sidley.com
Joining Circuit Split, First Circuit Adopts But-For Causal Standard for Establishing FCA Falsity Premised on AKS Violations
In a significant opinion, the First Circuit held yesterday that to establish falsity in an FCA action premised on an Anti-Kickback Statute (AKS) violation, “the government must show that an illicit kickback was the but-for cause of a submitted claim.” That determination hinged on the text of the 2010 AKS amendment, which provides that claims “resulting from” AKS violations are false. With this holding, the First Circuit joins the circuit split on what the “resulting from” language requires. The First, Sixth, and Eighth Circuits have adopted the strict but-for standard, while the Third Circuit opted for a much looser approach. We have previously reported on the split here, here, and here. We will follow up with further analysis of the First Circuit’s opinion.
(more…)
Jaime L.M. Jones
Chicago
jaimejones@sidley.com
Brenna E. Jenny
Washington, D.C.
bjenny@sidley.com
Scott D. Stein
Chicago
sstein@sidley.com
Joseph R. LoCascio
Chicago
joseph.locascio@sidley.com
Federal Agencies Can Now Directly Pursue FCA Cases Up to $1M
Embedded in the FY 2025 National Defense Authorization Act, signed into law on December 23, 2024, is a provision that could significantly impact agency enforcement activity: the Administrative False Claims Act (“AFCA”). Enforcement of the federal FCA is currently limited to DOJ and whistleblowers, and agencies lack the right to pursue federal FCA claims directly on their own behalf. But effective after agencies amend their regulations—the AFCA directs them to do by June 23, 2025, although the change in administration may cause delays—each federal agency’s Inspector General can pursue administrative FCA actions for claims aggregating up to single damages of $1,000,000, which are also subject to doubling under the statute (rather than treble damages as under the federal FCA). In addition, agencies can levy civil monetary penalties, subject to yearly inflationary increases. The amount of each per-claim penalty varies by agency but, for example, HHS may impose a penalty of up to $12,800 per claim, in addition to double damages. The AFCA may increase agency appetites to convert administrative self-disclosures, such as those made to HHS-OIG relating to potential violations of the Anti-Kickback Statute, into AFCA actions.
(more…)
Scott D. Stein
Chicago
sstein@sidley.com
Brenna E. Jenny
Washington, D.C.
bjenny@sidley.com
Joseph S. Katz
Washington, D.C.
joseph.katz@sidley.com
Massachusetts Law Imposes FCA Liability on Healthcare Investors For Failures to Disclose
Massachusetts recently signed into law House Bill 5159, which includes a strict new rule for investors in Massachusetts health care companies, requiring them to timely disclose FCA violations of their investment entities or face FCA liability themselves. This law imposes FCA liability for a broader range of conduct by investors as compared to the federal False Claims Act, and affected investors should consider whether any operational changes should be made to address the new law.
(more…)
Jaime L.M. Jones
Chicago
jaimejones@sidley.com
Brenna E. Jenny
Washington, D.C.
bjenny@sidley.com
Lauren McBride
Chicago
lmcbride@sidley.com
DOJ Releases FY2024 FCA Statistics
This week DOJ released its annual report on FCA settlements and new cases, available here. Although DOJ trumpeted a record-high number of qui tam cases filed (979) and a near record-high number of settlements and judgements (558), much of this increase in volume appears driven by the ongoing surge of Paycheck Protection Program cases. Healthcare FCA cases remained stable in fiscal year 2024 (“FY2024”) as compared to the prior two years, and associated recoveries were slightly down. Additional trends are outlined below.
(more…)
Jaime L.M. Jones
Chicago
jaimejones@sidley.com
Scott D. Stein
Chicago
sstein@sidley.com
Brenna E. Jenny
Washington, D.C.
bjenny@sidley.com
AG Nominee Bondi Commits to Defending FCA Constitutionality
Today the Senate Judiciary Committee held a confirmation hearing for Pam Bondi, President-elect Donald Trump’s nominee for Attorney General. During the hearing, Senator Chuck Grassley, a long-time proponent of whistleblowers in general and the FCA in particular, sought and received assurances from Bondi that under her leadership, vigorous FCA enforcement, including through qui tam cases, would continue.
(more…)
Jaime L.M. Jones
Chicago
jaimejones@sidley.com
Brenna E. Jenny
Washington, D.C.
bjenny@sidley.com
Emily Schneider
Washington, D.C.
emily.schneider@sidley.com
District Court Allows Summary Judgment on Medically Unnecessary and AKS Arguments, Joins Conversation on AKS Causation Standard
Judge Patti Saris in the District of Massachusetts recently granted a defense motion for summary judgment after concluding that relator failed to show that defendants knowingly submitted medically unnecessary tests or that any false claims were submitted as a result of independent contractor arrangements that allegedly violate the Anti-Kickback Statute (“AKS”). See U.S. ex rel. Omni Healthcare v. MD Spine Solutions, 18-cv-12558 (D. Mass. Jan. 6, 2025). With the latter ruling, Judge Saris joins a growing majority of courts holding that an AKS violation is only a false claim under the FCA if the claim would not have been submitted but for the kickback.
(more…)
Jaime L.M. Jones
Chicago
jaimejones@sidley.com
Brenna E. Jenny
Washington, D.C.
bjenny@sidley.com
Lauren McBride
Chicago
lmcbride@sidley.com
District Court Briefing Request Highlights Loper Bright’s Potential Impact on FCA Litigation
A judge in the Southern District of West Virginia sua sponte requested briefing from the parties to address the impact of the Supreme Court’s decision in Loper Bright Enterprises v. Raimondo on an FCA case to “ensure that the Stark regulatory scheme is consistent with the power given by Congress and the statute as it was signed into law.” See United States ex rel. Liesa Kyer v. Thomas Health Sys., Inc., No. 2:20-cv-00732 (S.D. W. Va.). The order highlights the new opportunities Loper Bright has created for defendants in FCA cases, although the court ultimately dismissed the case on more straightforward 9(b) grounds.
(more…)
Jaime L.M. Jones
Chicago
jaimejones@sidley.com
Brenna E. Jenny
Washington, D.C.
bjenny@sidley.com
Jane E. Fisher
Chicago
jane.fisher@sidley.com
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