Second Circuit Upholds District Court Ruling that FCA and AKS Scienter Is Not Present Where Defendant Previously Received Favorable HHS-OIG Advisory Opinions
This week, the Second Circuit upheld a dismissal from the Southern District of New York holding that a defendant did not fulfill the False Claims Act (“FCA”) or Anti-Kickback Statute (“AKS”) scienter requirements where the defendant sought and received favorable advisory opinions from the Department of Health and Human Services Office of Inspector General (“HHS-OIG”). See United States ex rel. Stephen Sisselman v. Zocdoc, Inc., No. 24-2807 (2d Cir. Apr. 14, 2025).
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.
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.