First Circuit Upholds Implied Certification in Anti-Kickback Statute-Based False Claims Act Cases and Clarifies Causation Standard in Regeneron Decision.
The federal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b) (“AKS”), makes it a felony for any person or entity to knowingly and willfully offer, make, or accept payments of any kind, directly or indirectly, to induce or reward any person for referring, recommending, or arranging for the purchase of any item for which payment may be made under any federally-funded health care program. The AKS is a critical safeguard for patients, aiming to ensure that the medical judgment of their providers remains free from undue influence. When medical device companies, pharmaceutical manufacturers, other health care providers, or any other person or entity involved in the healthcare industry offers to buy or sell a provider’s independent medical judgment, patients are at significant risk. The AKS aims to ensure that medical decisions are made based on patients’ best interests, rather than which company provides the fanciest trip, nicest gift, or the biggest check, by criminalizing such conduct.
The False Claims Act, 31 U.S.C. § 3729 (“FCA”), in turn, imposes liability on any person who, amongst other things, knowingly presents, or causes to be presented, a false claim for payment or knowingly makes, or causes to be made, a false record or statement material to a false claim. Because of the significant danger that AKS violations pose to patient safety, the Government has long declared that any claim for reimbursement where the underlying service or item was provided with exposure to an AKS violation is a false claim for the purposes of the FCA, and requires participants in the federal healthcare programs to attest that they will comply with the AKS.
This interrelationship provides a powerful set of tools to combat AKS violations, and ensure that patients receive appropriate medical care, rather than serve as conduits for the enrichment of their providers. The AKS was amended in 2010, through which Congress codified that any federal healthcare claim “that includes items or services resulting from a violation of [the AKS] constitutes a false or fraudulent claim for purposes of [the FCA].”
Against this backdrop, on February 18, 2025, the First Circuit Court of Appeals issued its much-anticipated opinion in United States v. Regeneron Pharmaceuticals Inc., No. 23-2086.The First Circuit’s opinion was cabined to determining the causation standard implicated by the phrase “resulting from,” as contained in the 2010 amendment to the AKS. United States v. Regeneron Pharms., Inc., 128 F.4th 324, 327-28 (1st Cir. 2025). Prior to this opinion, the meaning of the phrase “resulting from” remained an open question in the First Circuit. The United States District Court for the District of Massachusetts held in United States v. Regeneron Pharms., Inc., that a plaintiff must establish “but-for” causation. 2023 U.S. Dist. LEXIS 172618 at *30-31 (D. Mass. Sep. 27, 2023). The same court, in United States ex rel. Bawduniak v. Biogen Idec, Inc., held that but-for causation was not required, and that any claim exposed to a kickback “‘resulted from’ the kickback[].” 2018 U.S. Dist. LEXIS 70848, at *17-18 (D. Mass. Apr. 27, 2018). The Bawduniak court relied on the Third Circuit’s reasoning in United States ex rel. Greenfield v. Medco Health Sols., Inc., 880 F.3d 89 (3d Cir. 2018), as well as the fact that there was “no indication in either the law itself or the legislative history that Congress intended to narrow the scope of ‘falsity’ under the FCA when it amended the AKS” and that, instead, the purpose of the amendment was “part of an overall effort . . . to strengthen[] whistleblower actions based on medical care kickbacks.” Bawduniak, 2018 U.S. Dist. LEXIS 70848, at *15 (quotations omitted). The question was thus ripe for appellate consideration.
While the question before the First Circuit has oft been phrased as what is the requisite causation standard a relator or the Government must prove under the AKS, the Court provided a more nuanced answer. Rather than holding that the AKS demands but-for causation, the Court clarified that such a standard is only required if the plaintiff is proceeding in reliance on the 2010 amendment to the AKS alone. Regeneron, 128 F.4th at 336. The Court clarified that the “resulting from” language “establish[ed] a new pathway to liability for AKS violations” (id. at 331) and agreed with the Eighth Circuit’s analysis in United States ex rel. Cairns v. D.S. Med. LLC that this language does nothing to disturb the “false-certification,” or material falsity, theory of liability that has existed since the dawn of AKS-predicated FCA liability (id. at 333 citing 42 F.4th 828, 834–36 (8th Cir. 2022)). The Sixth Circuit, in United States ex rel. Martin v. Hathaway, 63 F.4th 1043 (6th Cir. 2023), also adopted the reasoning of the Cairns court regarding the application of but-for causation to FCA liability under the 2010 amendment. Thus, there are two paths forward when pleading and litigating AKS-predicated claims, the distinctions between which have important implications for False Claims Act practitioners.
When proceeding under the 2010 amendment, a relator need not plead any false certification or misrepresentation on the part of the defendant. Regeneron, 128 F.4th at 335.Instead, the amended statute renders all claims implicated by the AKS “per se false claim[s] under the FCA,” but only when the relator can establish that those claims “result[ed] from” the AKS violation. Id. at 334. It is under this theory that a relator must plead and establish but-for causation. The trade-off is that “[t]here is no [] materiality requirement for claims brought under the 2010 amendment.” Id. citing Guilfoile v. Shields, 913 F.3d 178, 190 (1st Cir.2019).
In contrast, the Court held that “there is nothing in the 2010 amendment that requires proof of but-for causation in a false-certification FCA case.” Regeneron, 128 F.4th at 333.Instead, under this theory, an AKS-predicated FCA claim remains viable even when “there [is] no AKS violation in connection with the claim” for payment. Id. As such, “false-certification claims require no proof of causation.” Id. at 334. This is because under the false-certification theory “it is not the AKS violation itself that renders the claim false . . . it is the false representation that there is no AKS violation.” Id. at 333. Phrased differently, because AKS compliance is a material condition of payment for federal healthcare claims, a false representation of compliance with the AKS creates liability under the FCA. Id. Under this theory, a relator need not prove causation, but the tradeoff is that they must prove that the defendant’s certification of AKS compliance “was material to the Government’s payment decision.” Id. at 334.
It is important to note that in affirming the “false-certification,” or material falsity, theory of liability, the Court reiterated its observation “that the term ‘certification’ never appears in the text of the FCA” and that the phase “false-certification” was simply used by the Court “for the sake of simplicity,” given that the parties used that phrase. Regeneron, Regeneron, 128 F.4th at 327, n.1 citing United States ex rel. Hutcheson v. Blackstone Med., Inc., 647 F.3d 377, 385–86 (1st Cir. 2011). In so observing, the Court was not taking issue with the theory, but rather was rejecting the need for “magic words” in a pleading and rejecting “[j]udicially-created” terms or categories. Hutcheson, 647 F.3d at 385. Hutcheson’s analysis was adopted by the Supreme Court in Universal Health Servs. v. United States ex rel. Escobar, which also rejected the need to employ artificial labels to invoke a valid theory of liability. 579 U.S. 176, 192 (2016). Under Hutcheson and Escobar it is not whether there is a specific express false certification, but whether the underlying compliance with the AKS is material, which the First Circuit found to be established by the billing agreement that every provider and supplier signs when enrolling as a Medicare provider. Hutcheson, 647 F.3d at 393.
“Put simply, claims under the 2010 amendment run on a separate track than do claims under a false-certification theory.” Regeneron, 128 F.4th at 334. This presents a choice for relator’s counsel – on which track should you proceed? The answer, of course, depends on the facts of your case. If missing facts supporting causation, material falsity may be the best path. Conversely, if missing facts supporting materiality the 2010 amendment may provide the best track. And, of course, a case will be especially strong where you can proceed under both theories. This distinction was most recently exemplified in the litigation that gave rise to the jury verdict in a post-Cairns case in the Eighth Circuit, where the District Court for the United States District of Minnesota held that “if Plaintiffs can establish all the elements of their material falsity theory without reliance on the 2010 Amendment—including that the purported AKS violations were material—Plaintiffs need not prove but-for causation to establish liability under the FCA.” United States ex rel. Fesenmaier v. Cameron-Ehlen Grp., Inc., 2023 U.S. Dist. LEXIS 788, at *8 (D. Minn. Jan. 4, 2023).
While patients are best served when laws like the AKS are read broadly, it is important to note that “but-for” causation is likely not the stone wall defendants often claim. As the lower court observed in Regeneron, “but-for causation does not normally require that an actor be the sole factual cause of a harm.” 2023 U.S. Dist. LEXIS 172618 at *30-31. The Supreme Court has explained that “but-for” is a broad, rather than an exacting, standard, which “can be [] sweeping.” Bostock v. Clayton Cty., 140 S. Ct. 1731, 1739-40 (2020) (“[T]raditional but-for causation standard means a defendant cannot avoid liability just by citing some other factor that contributed . . .”); Ford Motor Co. v. Mont. Eighth Judicial Dist. Court, 141 S. Ct. 1017, 1034 (2021) (Gorsuch, J., concurrence) (“but-for causation test isn’t the most demanding. At a high level of abstraction, one might say any event in the world would not have happened ‘but for’ events far and long removed.”); Paroline v. United States, 134 S. Ct. 1710, 1722 (2014) (“sometimes that showing could be made with little difficulty”). As the Court recognized in Bostock, if Congress intended the prohibited conduct to be the main cause of the challenged result, the statute at issue could have specified so with langue like “solely” or “primarily because of.” 140 S. Ct. at 1739-40 at 1739. And a relator, “like any litigant, is entitled to attempt to prove its case through circumstantial evidence and reasonable inferences” including “in the right circumstances, [] proof of temporal proximity…” Regeneron, 2023 U.S. Dist. LEXIS 172618, at *32.
Following the First Circuit’s order in Regeneron, the matter was returned to the United States District Court for the District of Massachusetts for further proceedings consistent with the First Circuit’s holding. On May 2, 2025, the United States requested leave to file a second motion for partial summary judgment and to reopen discovery, as the Government did not originally seek summary judgment or discovery on a false certification theory. The district court granted the Government’s motion, setting a briefing schedule and a hearing for May 28, 2025.
Jonathan Lischak is an Attorney at Morgan Verkamp. This piece was edited by Tony Munter of Price Benowitz and Andrea Fischer of Fischer Legal Group.
