District of Minnesota Rejects But-For Causation in the AKS Context

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In a recent opinion from the U.S. District Court for the District of Minnesota, the court analyzed the interplay between the False Claims Act and the Anti-Kickback Statute.  See United States ex rel. Fesenmaier v. Cameron-Ehlen Group, Inc., Case No. 13-cv-3003, 2021 WL 101193 (D. Minn. Jan. 12, 2021).  This opinion is significant because the court recognized conflicting evidence on inducements, and rejected but-for causation to violate the AKS.

In Fesenmaier, Defendant “is a distributor of intraocular lenses (IOLs) and other products related to ophthalmic surgeries.”  Its products are provided “to ophthalmologists and facilities for use in ophthalmology procedures, including cataract surgeries.”  The Relator alleged that Defendant “offered unlawful kickbacks and that, as a result of those kickbacks, false and fraudulent claims for payment were made to federal health care programs, including Medicare”.  The court detailed a story of alleged kickbacks including, inter alia, private flights to a springtime Georgia golf tournament, New York City getaways, South Dakota hunting trips, and $1,000+ steakhouse dinners.

The court’s discussion of inducements is instructive.  See id. at **7–13.  The court considered the AKS inducement element to be an intent requirement.  See id. at *8.  Although there was evidence that the gifts were given to “gain or maintain business”, there was also evidence of friendships and other social relationships that contradict an intent to induce referrals.  See id.  That conflicting evidence rendered summary judgment inappropriate.  See id. at *9.

The court also considered Defendant’s arguments that it was entitled to summary judgment because Relator lacked evidence.  See id. at **9–13.  The court reviewed the allegations as applied to both the professional fee and facility fee Medicare claims.  To start, the court rejected the “but-for causation argument in the context of FCA claims predicated on alleged AKS violations.”  See id. at *10.  As a result, the court rejected the argument that professional fee Medicare claims would be shielded from liability because they involved medical services or that they would have occurred anyway.  See id. at *11.

As for the facility fees, the court considered causation under both the AKS and FCA.  Under the AKS, the court concluded that “but-for causation is not a requirement of the AKS.”  See id. at *11.  In other words, a defendant can violate the AKS “even if no sale occurs.”  See id. at *12.  The court noted that temporal proximity by itself is not enough to show causation under the AKS, but also determined that Relator’s other evidence created a fact issue.  See id.  Under the FCA, the court reiterated that plaintiffs must “prove proximate cause.”  See id.  The court also rejected a “strict temporal cutoff such that a false claim ceases to be false if a certain amount of time has passed between the fraudulent conduct and the submission of the claim.”  See id.

The opinion in Fesenmaier highlights the sort of exhaustive analysis necessary in adjudicating FCA and AKS cases.  If you have any questions about the Federal Anti-Kickback Statute or other laws related to health care fraud, please contact the authors or another member of the healthcare department.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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