The Eighth Circuit Court of Appeals recently issued a notable decision that offers defendants in FCA cases premised on violations of the Anti-Kickback Statute (“AKS”) significant new defenses relating to causation. The panel soundly rejected the government’s position that as a result of the 2010 amendments to the AKS, any claim provided in violation of the AKS is tainted, and therefore “false,” under the FCA. Instead, the Eighth Circuit held that for an AKS violation to render a claim false, the kickback must have been the but-for cause of the submission of the claim. United States ex rel. Cairns v. D.S. Medical LLC, No. 20-3010, 2022 WL 2930946 (8th Cir. July 26, 2022). The decision creates a circuit split with the Third Circuit and given the many courts of appeal that have not weighed in on this question, promises to generate renewed debate in district courts across the country as to the appropriate causation standard in FCA cases involving alleged violations of the AKS.
In 2010, as part of the Affordable Care Act, Congress amended the AKS to state 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. Interpreting this statutory language, the district court had instructed the jury that to establish falsity under the FCA, “it is enough for the United States to show that the claim failed to disclose” the AKS violation. This was consistent with the government’s position, which is that the defendant’s alleged kickbacks “tainted” the claims for reimbursement submitted to Medicare and Medicaid, rendering them false. The Eighth Circuit disagreed, concluding that the language “resulting from” unambiguously requires a but-for causation standard. The Eighth Circuit observed that the Supreme Court in Burrage v. United States, 571 U.S. 204 (2014) had interpreted the Controlled Substances Act’s use of a nearly identical phrase, “results from,” to impose a but-for causation standard. Accordingly, the panel explained “we have little trouble concluding that, in common and ordinary usage, the participle phrase ‘resulting from’ also expresses ‘a but-for causal relationship.’” Continuing to apply Burrage, the Eighth Circuit explained that the but-for standard in the AKS requires proof that the defendants “would not have included particular ‘items or services’ absent the illegal kickbacks.”
Seeking to avoid having to establish but-for causation, the government had argued that it needed only to show that a kickback either “tainted” the claim or “may have been a contributing factor.” The government often advances this causation standard during FCA investigations and it has been accepted by some district courts. Rejecting these alternative causation standards, the panel determined that they “are hardly causal at all.” This is because a “taint” could occur without any kickback causing the inclusion of any item or service on a claim. Similarly, “asking the jury if a violation ‘may have been a contributing factor’ does not establish anything more than a mere possibility.”
The court also rejected the government’s two “contextual” counterarguments. First, the government argued that because AKS compliance is a condition of payment by Medicare or Medicaid, any failure to disclose the AKS violation—regardless of the relationship between the kickback and the included items or services—is sufficient. The Eighth Circuit disagreed: the phrase “resulting from” “is unambiguously causal.”
Second, the government argued that two of the sponsors of the 2010 amendment had said in floor statements that the amendment’s purpose was to expand the universe of claims that are false under the FCA. However, the Eighth Circuit gave these statements little weight, reasoning that its duty is to interpret laws, not to reconstruct legislators’ intentions. In contrast, the Third Circuit in United States ex rel. Greenfield v. Medco Health Solutions gave greater weight to legislative history than to textual arguments in refusing to apply Burrage’s causation standard.
The Eighth Circuit’s opinion can be found here.