The Anti-Kickback Statute (AKS) is a criminal statute that, in broad strokes, bars the payment or receipt of “remuneration” in exchange for referrals. It has become one of the most lucrative theories of civil liability under the False Claims Act (FCA). Many of the recent eye-popping FCA settlements and verdicts sprang from AKS theories. Drawn by the possibility of multimillion-dollar bounties, qui tam relators have been creative in alleging that a vast array of modern healthcare arrangements are tainted by improper remuneration.
On March 28, 2023, the US Court of Appeals for the Sixth Circuit issued a common-sense and textualist analysis that pushes back on some of the broadest interpretations of the AKS. United States ex rel. Martin v. Hathaway et al., No. 22-1463 began as a relator-initiated FCA case. The relator, an ophthalmologist named Dr. Martin, alleged that a small-town hospital rescinded its offer to hire her because her current employer (the other ophthalmologist in town) would stop sending referrals to the hospital if it hired Dr. Martin. She responded by filing a qui tam lawsuit alleging that the hospital’s decision not to hire her was “remuneration” to her current employer and that it tainted all referrals between her employer and the hospital going forward. The government declined to intervene, and the district court dismissed her claims twice—first for lack of specificity, then on the merits and with prejudice.
In Depth
On appeal, the Sixth Circuit...
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