Government Program Fraud, False Claims Act & Qui Tam Litigation Playbook

The U.S. District Court for the Eastern District of Virginia is the latest court to weigh in on the continuing debate surrounding the scope of the Federal Anti-Kickback Statute (AKS) as it applies to patient assistance programs (PAPs). In a lengthy opinion issued in January 2024, the court endorsed the broad interpretation advanced by the government, expressing little sympathy for the legal or policy arguments advanced by the plaintiffs, a coalition of pharmaceutical manufacturers. The coalition has indicated it will appeal the case to the Fourth Circuit.

The Sixth Circuit Court of Appeals recently issued a key decision interpreting narrowly an important element of the Anti-Kickback Statute (AKS) and the interplay between the AKS and the False Claims Act (FCA). The court’s decision perpetuates a circuit split, now two to one, on whether the but-for causation must be proven to maintain an FCA action on an AKS-violation theory. While not ripe for Supreme Court review yet, the decision signals that this critical and controversial issue may ultimately need clarification from the high court.

On November 1, 2022, the Department of Justice (“DOJ”) announced that Florida-based electronic health record (“EHR”) vendor, Modernizing Medicine (“ModMed”), agreed to a $45 million settlement with the United States to resolve civil claims that it violated the False Claims Act (“FCA”) and Anti-Kickback Statute (“AKS”) by accepting and providing unlawful remuneration in exchange for referrals, causing users to submit tainted claims for federal incentive payments.

On July 26, 2022, the United States Court of Appeals for the Eighth Circuit issued a decision that creates a new circuit split on the question of what evidence is needed to prove that a violation of the Anti-Kickback Statute (AKS) renders a claim false or fraudulent under the False Claims Act (FCA).