But-For Causation in Kickback-Based FCA Claims

Federal appeals courts are split on whether a kickback-tainted referral becomes False Claims Act (FCA) liability. The Anti-Kickback Statute (AKS) provision added by the Affordable Care Act, 42 U.S.C. 1320a-7b(g), says a claim resulting from a kickback is a false claim, but not what resulting from requires. Three circuits now demand but-for causation: proof the claim would not exist without the kickback. One, the Third Circuit, accepts a lower bar: proof the claim merely touched a tainted referral.

The 2010 Amendment That Created the Dispute

Before 2010, a kickback's effect on a claim's falsity was a matter for case law, not statute. The Affordable Care Act added subsection (g) to the Anti-Kickback Statute that year, stating that a claim including items or services resulting from a violation constitutes a false or fraudulent claim under the False Claims Act. Congress wrote the link into the statute but never defined resulting from, and that silence now divides the circuits.

The Third Circuit's Exposure Standard

The Third Circuit took up the question first, in Greenfield v. Medco Health Solutions, a qui tam suit over charitable contributions alleged to induce patient referrals. The court rejected but-for, holding instead that a kickback becomes a false claim once a patient is exposed to an illegal recommendation or referral and a provider submits a claim for that care, a link to a specific claim rather than proof it would not otherwise exist. That link was missing in Greenfield's case: the Third Circuit affirmed summary judgment for the defense.

Three Circuits Choose But-For Causation

The Eighth Circuit broke from the Third Circuit in 2022 in Cairns v. D.S. Medical LLC, over a neurosurgeon who ordered spinal implants from a distributor his fiancee owned. The trial court never instructed the jury on but-for causation, yet the government won. The Eighth Circuit held resulting from requires that causal link and reversed.

The following year, the Sixth Circuit reached the same conclusion in Martin v. Hathaway, over a hospital declining to hire one ophthalmologist in exchange for another's continued referrals. The arrangement never changed where those referrals went. Since resulting from ordinarily means but-for causation, the court affirmed dismissal. The Supreme Court later declined to review the decision.

The First Circuit became the third in February 2025, in United States v. Regeneron Pharmaceuticals, a case over Regeneron's funding of a charity that covered patient copays for an eye drug. On interlocutory appeal, it agreed resulting from imposes but-for causation. The split now stands three circuits to one, with only the Third Circuit on the lower standard.

Why the Standard Chosen Decides the Case

The gap between the standards is often the whole case. The Third Circuit's relator only connects a claim to a referral that touched a kickback. The but-for relator must prove the claim would not exist without it, a showing that often comes down to statistical analysis of claims data before and after the alleged inducement.

The circuit where an Anti-Kickback Statute-based False Claims Act case is filed, not just its facts, can decide whether a tainted referral automatically becomes a false claim.

What Providers Should Take From the Split

No circuit has adopted a third position, and the Supreme Court has already declined one opportunity to resolve the conflict. Venue carries outsized weight: a claim surviving dismissal in the Third Circuit might not survive the same motion in the Sixth, Eighth, or First. Many of these matters also proceed as a declined qui tam action, where the relator presses the claim without the government's resources behind it.

Resolution is rarely limited to a damages number. A settlement is often paired with a corporate integrity agreement imposing years of compliance monitoring, and a serious case can carry the separate risk of OIG exclusion from federal healthcare programs.

Why Early Legal Counsel Is Critical

It is critical that healthcare providers and healthcare companies promptly retain experienced healthcare defense counsel upon receiving a civil investigative demand, a qui tam complaint, or any government inquiry tied to an alleged kickback. Early legal intervention can shape which causation standard applies and preserve the record on whether a claim resulted from the kickback. Delaying representation can affect the outcome and expose the provider to unnecessary risk.

How Health Law Alliance Can Help

Health Law Alliance's attorneys have overseen 2,000+ audits and handled 5,000+ matters, with 25+ years of experience. Health Law Alliance defends providers against False Claims Act theories built on alleged kickback violations, building the causation record a circuit requires and negotiating a resulting corporate integrity agreement when a settlement calls for one; see Corporate Integrity Agreements: Terms, Costs, and Negotiation for what that involves. If your organization is facing a kickback-based False Claims Act claim, contact our False Claims Act defense attorneys for a free, confidential consultation.