The Sixth Circuit expanded the existing circuit split regarding when a kickback causes a federal health care claim to be false or fraudulent under the False Claims Act (FCA) and set out a new analysis for what constitutes impermissible remuneration under the federal Anti-Kickback Statute (AKS), curbing the scope of potential liability.
On Tuesday, the Sixth Circuit released its opinion in U.S. ex rel. Shannon Martin, et al. v. Darren Hathaway, et al., a case involving alleged “remuneration” from a hospital to a local ophthalmologist. The Sixth Circuit adopted a “but-for” causation standard, joining the Eighth Circuit in a burgeoning circuit split on the applicable causation standard for FCA cases predicated on alleged violations of the AKS, which we previously discussed here. Additionally, the Sixth Circuit held that, under the AKS, unlawful remuneration must be money or some physical thing of value, and not simply “any act that may be valuable to another.”[1] Hogan Lovells submitted an amicus brief on behalf of the American Hospital Association and several state hospital associations advocating for the AKS causation and remuneration definitions adopted by the Court.
A. Background
Relators, ophthalmologist Dr. Shannon Martin and her husband Douglas Martin, an employee of Oaklawn Hospital, filed a qui tam action against ophthalmologist Dr. Darren Hathaway, South Michigan Ophthalmology, P.C. (Hathaway’s ophthalmology practice), and Oaklawn Hospital. The suit alleged that...
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