Sixth Circuit Narrowly Interprets Causation and Remuneration under the False Claims Act and Anti-Kickback Statute

By Sarah Wirskye - On

In U.S. ex rel. Shannon Martin, et al. v. Darren Hathaway, et al., No. 22-1463 (6th Cir. March 28, 2023) the court affirmed dismissal of a False Claims Act (FCA) complaint, based on its interpretation of causation and remuneration under the FCA, 31 U.S.C. §§3729-3733 and Anti-Kickback Statute (AKS), 42 U.S.C. §1320a-7b(b). The court held that the “complaint…does not turn on a cognizable theory of remuneration, and it fails to establish causation.”

In Martin, relator ophthalmologists filed a FCA action against ophthalmologist Dr. Hathaway, his practice, and a hospital. The claims were based on an allegation that the hospital did not hire the relator at Dr. Hathaway’s request in exchange for continued referrals to the hospital.

The court held that unlawful remuneration under the AKS must be “just payments and other transfers of value” and not “any act that may be valuable to another.” The court rejected the interpretation of “remuneration” advanced by HHS-OIG. To support its interpretation, the court performed a statutory analysis of the term “remuneration” in the Social Security Act and relied on HHS-OIG guidance and advisory opinions. It also applied the rule of lenity, noting that the AKS gives rise to both criminal and civil liability.

Thus, the remuneration was insufficient under the AKS in Martin because there was no payment or transfer of value. The defendants continuing their referral practices as before was not remuneration, because remuneration is limited to payment or transfers of value and not any act that may be valuable to another.

The court then addressed the “resulting from” language in the AKS. The Sixth Circuit joined the Eighth Circuit (United States ex rel. Cairns v. D.S. Medical L.L.C., 42 F.4th 828 (8th Cir. 2022)) and adopted a “but-for” causation standard for FCA cases based on AKS violations. In addition to Carins, the court relied on the plain language of the statute to support its interpretation.

Critical to the court’s conclusion that the “resulting from” language was not satisfied was that the alleged scheme did not change anything and both defendants referred patients to each other before and after the alleged wrongdoing. Moreover, when analyzing the timeline of the surgeries, it noted that “[t]emporal proximity by itself does not show causation,” possibly suggesting that even a change in referral patterns would not necessarily be sufficient.


The Sixth Circuit’s joining Eighth Circuit in adopting a “but-for” causation standard in AKS based FCA cases leaves the Third Circuit in the minority in its interpretation of the “result from” language. In United States ex rel. Greenfield v. Medco Health Solutions, Inc., 880 F.3d 89 (3rd Cir. 2018)), the Third Circuit held that only a “link” or “some connection” is required between the illegal kickback and claim for reimbursement. As circuit courts continue to address this issue, the Supreme Court will likely have to weigh in.

Regarding the interpretation of “remuneration,” the opinion is generally consistent with other cases. However, this is the first circuit court opinion to explicitly interpret the remuneration element as it did.

The Martin Court concluded by stating that “[m]uch of the workaday practice of medicine might fall within an expansive interpretation of the Anti-Kickback Statute. Worse still, the statute does little to protect doctors of good intent, sweeping in the vice-ridden and virtuous alike.” However, it recognized that “[a] faithful interpretation of the ‘remuneration’ and ‘resulting from’ requirements still leaves plenty of room to target genuine corruption.” That should be the government’s goal in both criminal and civil AKS cases.

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