What You Need to Know

• A holding by the Eighth Circuit Court of Appeals in recent months took a stance on the causation standard for False Claims Act cases premised on violations of the Anti-Kickback Statute.
• The Court’s holding, which conflicts with a previous Third Circuit holding, provides defendants in these cases with a valid new defense.
• It is not far-fetched to imagine that this circuit split could eventually bring this issue before the U.S. Supreme Court.

Individuals and companies charged with violating the federal False Claims Act (FCA) based on Anti-Kickback Statute (AKS) violations may now have a valid defense to raise.

The FCA imposes civil liability on anyone who presents or conspires to “present[ ] ... a false or fraudulent claim” to the government. This is usually related to goods or services. The AKS, which was amended in 2010, states that submitting a claim to the government that “includes items or services resulting from a[n] [anti-kickback] violation” makes a claim “false or fraudulent” under the FCA. Plainly stated, the government’s broad interpretation has been that any claim submitted that violates the AKS is tantamount to committing a FCA violation.

Recently, the U.S. Court for Appeals for the Eighth Circuit, in the matter United States ex rel. Cairns v. D.S. Med., LLC, took a stance on the causation standard for FCA cases premised on AKS violations.

The Court’s holding in Cairns offered up a pivotal new defense for defendants in these types of...

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