Anti-Kickback Ruling Undercuts Some False Claims Act Cases
Courts are beginning to question how aggressive whistleblowers and government lawyers are concerning the use of the Anti-Kickback Statute (AKS) as a predicate act for a False Claims Act (FCA) violation, says Patric Hooper, JD, partner with Hooper, Lundy & Bookman in Los Angeles.
The most prevalent basis for bringing an FCA action against a healthcare provider is to allege a violation of the AKS, Hooper explains. The AKS violation is a predicate to the violations of the FCA. A recent ruling from the United States Court of Appeals for the Second Circuit suggests courts will require significant proof that the organization willfully violated the statute.1
About half of FCA actions are based on alleged violations of the AKS, which is a criminal statute, Hooper says. “It has an intent requirement that the courts sometimes differ over. If I’m a whistleblower, or if I’m the government, not only do I have to prove the other elements of the False Claims Act to get any money, but I also have to prove that the underlying acts are a violation of the Anti-Kickback Statute,” he says.
That is where the Second Circuit’s ruling becomes important. The court said plaintiffs must show that the defendant willfully and knowingly violated the law, even saying the defendant must have acted with “vicious will.”
“The bottom line is that if you are under investigation, you’re already partially dead because the investigation itself kills you. But at the end of the day, it’s always nice to have some defense,” Hooper says. “If you have to try the case, you have a chance of winning. Or if you’re trying to settle, you can at least get the government to reduce the amount based on this ruling.”
REFERENCE
- United States ex rel. Hart v. McKesson Corporation LLC. Decided March 12, 2024. https://law.justia.com/cases/f...
Courts are beginning to question how aggressive whistleblowers and government lawyers are concerning the use of the Anti-Kickback Statute as a predicate act for a False Claims Act violation.
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