On September 27, 2023, a monumental decision emerged from the District of Massachusetts. The Chief Judge ruled that in False Claims Act (“FCA”) cases rooted in alleged infringements of the Anti-Kickback Statute (“AKS”), the applicable standard is but-for causation. This decision diverges from the regular citation of the 2018 Third Circuit case, United States ex rel. Greenfield v. Medco Health Solutions, as well as previous District of Massachusetts decisions. Instead, the Court has synced with the standard adopted more recently by the Eighth and Sixth Circuits.
The shift in legal direction was covered in JDSupra’s coverage, which provided insights into the sudden shift in approach towards but-for causation.
The but-for causation standard, typically applied in tort litigation, involves establishing a direct link between the detrimental action (kickback) and the alleged wrong (false claim) – a high bar to clear. Previously, the Third Circuit had applied a more lenient, oft-cited standard, where it wasn’t necessary to directly connect the kickback action and the false claim.
As it stands following the ruling, FCA lawsuits which are based on AKS violations will need to meet the but-for causation standard before proceeding. Should these requirements not be satisfied, such cases may not meet the criterion for progression in the District of Massachusetts.
It is noteworthy to mention that the Eighth and Sixth Circuits have also adopted the but-for causation requirement. The Sixth Circuit put forth a comprehensive reasoning in United States ex rel. Prather v. Brookdale Senior Living Communities. Similarly, the Eighth Circuit in the case of United States ex rel. Thayer v. Planned Parenthood of the Heartland unfolded its understanding of how broad and restrictive the AKS’s influence was.
The unanimous acceptance of this standard by the Eighth, Sixth and now the District of Massachusetts Courts reinforces a bridled approach to FCA cases based on claimed AKS infringements and is pivotal to watch for legal practitioners concentrating on healthcare fraud litigation and corporate compliance.