First Circuit Adopts “But-For” Standard in Anti-Kickback Statute

Healthcare fraud law does not usually sound like a grammar lesson, but sometimes one phrase does all the heavy lifting. In February 2025, the U.S. Court of Appeals for the First Circuit held in United States v. Regeneron Pharmaceuticals, Inc. that when the government tries to turn an Anti-Kickback Statute violation into automatic False Claims Act liability under the 2010 AKS amendment, it must prove but-for causation. In plain English, the government has to show the claim would not have happened without the kickback. That is a much tougher standard than saying a claim was merely “connected” to a questionable payment.

This First Circuit ruling matters because AKS-based FCA cases are a favorite enforcement tool in the healthcare world. They can involve drug manufacturers, hospitals, physicians, device companies, labs, dialysis providers, and just about anyone else who touches federal healthcare dollars. And while the decision is undeniably more defense-friendly, it is not a “kickbacks are fine now” ruling. Not even close. The AKS remains a criminal statute, the FCA still carries treble damages and penalties, and HHS OIG still oversees a thicket of fraud-and-abuse rules that can ruin an otherwise cheerful quarterly earnings call.

Why the First Circuit’s Decision Is a Big Deal

The headline is simple: the First Circuit joined the Sixth and Eighth Circuits in reading the phrase “resulting from” in the AKS amendment as requiring actual but-for causation. That means the First, Sixth, and Eighth Circuits now line up on one side, while the Third Circuit remains the notable outlier with a more forgiving “link” or causal-connection approach. For healthcare companies operating across multiple jurisdictions, that is not a minor technicality. It can shape pleading standards, summary judgment strategy, settlement leverage, and how aggressively the government or relators frame a case.

The First Circuit also made an equally important point that gets lost in the soundbite version of the case: the but-for rule applies to claims brought through the 2010 AKS amendment pathway, not necessarily to every possible FCA theory involving kickbacks. The court said false-certification theories still exist on a separate track. So this was not the court slamming the courthouse doors shut; it was the court telling plaintiffs they need the right key for the right door.

AKS and FCA Basics, Without the Legal Fog Machine

What the Anti-Kickback Statute Does

The federal Anti-Kickback Statute prohibits knowingly and willfully offering, paying, soliciting, or receiving remuneration to induce referrals or purchases of items or services payable by a federal healthcare program. The statute is broad on purpose: remuneration can be direct or indirect, overt or covert, in cash or in kind. That breadth is why compliance teams lose sleep over consulting arrangements, speaker programs, referral relationships, discounts, and patient-assistance structures that start life looking harmless and end life looking like Exhibit 47.

What the False Claims Act Adds

The False Claims Act is the government’s premier civil fraud tool. It imposes liability on those who knowingly present false claims for payment to the United States, and the Department of Justice reported more than $6.8 billion in FCA settlements and judgments in fiscal year 2025, the highest annual total in the statute’s history, with more than $5.7 billion tied to healthcare matters. So when an AKS issue also becomes an FCA issue, the exposure can move from “compliance headache” to “board-meeting emergency” with alarming speed.

The 2010 Amendment That Changed the Fight

Congress amended the AKS in 2010 to provide that “a claim that includes items or services resulting from” an AKS violation constitutes a false or fraudulent claim for FCA purposes. That language was meant to strengthen the connection between kickback violations and civil fraud enforcement. The catch, of course, is the phrase “resulting from.” Courts have spent years arguing over whether it means a claim merely needs some connection to a kickback, or whether the kickback must be the but-for cause of the claim. In 2025, the First Circuit answered that question for its jurisdiction: but-for causation wins.

The Regeneron Case, in Plain English

The First Circuit case arose from allegations that Regeneron used copay assistance tied to its eye drug Eylea to induce prescriptions reimbursed by Medicare Part B. According to the opinion, Eylea is a “buy and bill” drug for wet age-related macular degeneration, Medicare covers 80 percent while the patient typically owes 20 percent, and the drug is expensive enough that annual patient copays can exceed $2,000. The court noted that Medicare Part B had spent more than $11.5 billion on Eylea since 2013, and that a single injection cost about $1,850.

The government alleged that Regeneron paid more than $60 million over four to five years to the Chronic Disease Fund, a foundation that provided copay assistance to patients with wet AMD. For purposes of the appeal, the First Circuit assumed without deciding that some or all of those donations were unlawful kickbacks. The real issue on appeal was not whether the arrangement was shady, but what the government had to prove to show that claims for Eylea “resulted from” the alleged kickback scheme.

The government argued for a looser test. In essence, it said that if a patient was exposed to an improper inducement and a claim later followed, that should be enough. Regeneron argued that the statutory language required more: the government had to show the alleged kickback actually caused the prescription and resulting claim, meaning the claim would not have occurred absent the kickback. The First Circuit sided with Regeneron.

Why the Court Chose But-For Causation

The First Circuit’s reasoning started with text. The court said the Supreme Court has treated phrases like “resulting from” as requiring actual causation and, in the ordinary course, but-for causation. The panel leaned heavily on Burrage v. United States and Paroline v. United States, which recognize that while context can sometimes justify another causal standard, but-for causation is the default unless strong textual or contextual clues point elsewhere. The First Circuit found no such clues in the AKS amendment.

The court was especially unmoved by the government’s broader policy arguments. Yes, the AKS itself can be violated without proof that a particular claim would not have been paid. Yes, Congress wanted to strengthen anti-fraud enforcement. But the First Circuit said those points did not answer the narrower statutory question: what does “resulting from” mean in this specific amendment? And to the court, that phrase still sounded like a classic but-for standard, not a vibes-based “tainted somehow” test.

The Sixth Circuit had already taken the same view in Martin v. Hathaway, stating that the ordinary meaning of “resulting from” is but-for causation unless strong contextual indicators point elsewhere. The Eighth Circuit had reached a similar conclusion in Cairns, rejecting softer formulations such as claims “tainted by” or “provided in violation of” a kickback scheme. The First Circuit’s decision therefore did not appear out of nowhere; it joined an emerging appellate majority.

The Circuit Split Is Now Sharper, Not Smaller

The Third Circuit’s Greenfield decision is still the main counterweight. There, the court said a relator needed to show “some connection” between an alleged kickback and a reimbursement claim, but not necessarily direct proof that the referral would not have happened without the kickback. At the same time, the Third Circuit also said temporal proximity alone is not enough. So even the more plaintiff-friendly approach is not a free pass. Still, compared with the First Circuit’s but-for standard, the Third Circuit’s rule is clearly less demanding.

That split matters. A relator or government lawyer evaluating venue now faces two very different causation frameworks. A defense lawyer evaluating risk does too. Legal commentators immediately noted that the First Circuit’s decision deepened the divide and increased the possibility of eventual Supreme Court review, even though any such review remains speculative unless and until the Court takes a case.

This Is Not the End of AKS-Based FCA Cases

If you represent healthcare companies, this is the paragraph to tape next to the coffee machine: the government can still pursue AKS-related FCA claims. The First Circuit expressly said the 2010 amendment did not wipe out alternative FCA theories such as express or implied false certification. Under that route, liability may flow from falsely representing compliance with the AKS on forms or in claims submissions, and those theories carry their own requirements, including materiality. In other words, the road narrowed, but it did not disappear.

That means compliance programs should not celebrate like the company just won a parade permit. The better takeaway is that plaintiffs may need more targeted proof and tighter pleadings. Defendants, meanwhile, still need strong controls around speaker programs, referral arrangements, patient-assistance support, consultant payments, grants, marketing practices, and relationships with physicians or vendors. A but-for standard is helpful in litigation, but nobody wants their first line of defense to be “see you at summary judgment.”

What Healthcare and Life Sciences Companies Should Do Now

1. Recheck Arrangements That Touch Referrals or Utilization

The AKS remains broad, and OIG continues to emphasize safe harbors and fraud-and-abuse guardrails. Companies should review agreements involving referral sources, marketing support, data sharing, advisory boards, speaker fees, copay support, and charitable donations. If an arrangement depends on everyone promising to “keep it clean,” that is not a compliance structure; that is wishful thinking wearing a blazer.

2. Treat Patient Assistance Programs Like a High-Risk Zone

OIG’s 2005 and 2014 guidance on patient assistance programs reflects longstanding concern that independent charities can become conduits for manufacturer subsidies rather than truly independent aid organizations. That concern sits at the center of the Regeneron dispute. Companies that donate to assistance funds should pay careful attention to disease-fund design, donor influence, data firewalls, and any signals suggesting the charity is functioning less like a charity and more like a helpful-but-legally-terrifying pass-through.

3. Build a Causation Record Before Litigation Forces the Issue

Regeneron highlights that causation evidence matters. Plaintiffs will look for proof that the alleged remuneration changed prescribing behavior, referral volume, purchasing decisions, or utilization. Defendants should think ahead about documentation showing clinical independence, legitimate business rationales, and decision-making factors unrelated to remuneration. In a but-for world, records that explain why a physician, facility, or patient chose a product or provider can become extremely important.

4. Do Not Forget the FCA’s Bigger Enforcement Climate

Even with tougher causation standards in some circuits, the enforcement climate remains intense. DOJ’s fiscal year 2025 FCA numbers show record recoveries, a record number of qui tam filings, and continued emphasis on healthcare matters. That is the opposite of a sleepy enforcement environment. So while Regeneron may sharpen defenses in AKS-per-se FCA cases, it does not signal retreat from healthcare fraud enforcement overall.

Specific Examples of How the Ruling Could Change Litigation

Imagine a pharmaceutical manufacturer donates to an independent charity, and patients who receive assistance later receive the manufacturer’s drug. Under a loose “link” theory, the government might argue that the claims are false because the assistance program helped keep demand flowing. Under the First Circuit’s rule, that is not enough by itself. The plaintiff must prove the assistance was the but-for cause of the claim, meaning the claim would not have happened absent the kickback. That is a much more evidence-heavy proposition.

Now imagine a provider signs forms or makes certifications representing compliance with federal program requirements while allegedly operating under a kickback-tainted arrangement. Here the government may try a false-certification theory instead. The First Circuit specifically preserved that possibility, while also noting that those cases involve different elements, including materiality. Translation: plaintiffs may have to work harder, but clever pleading is not taking the year off.

Real-World Experiences and Practical Lessons From the AKS Battlefield

The most useful “experience” from this area of law is that AKS cases rarely begin with a dramatic movie-scene bribe slid across a table. More often, they start with an arrangement that looked efficient, charitable, growth-oriented, or “industry standard” until someone asked the fatal compliance question: why exactly is this money moving? In healthcare, that question has a nasty habit of growing teeth. A perfectly polished consulting agreement may still look ugly if the consultant never consults. A patient-assistance program may still create risk if independence is more slogan than reality. A speaker program may still become a problem if the audience seems suspiciously interested in the shrimp cocktail and not at all interested in the slides.

Another practical lesson is that causation fights are rarely abstract in real cases. They turn on operational details. Who selected the patients? What information did the donor receive? Could the manufacturer identify which patients were receiving assistance? Did physicians have lower-cost alternatives? Did internal emails discuss removing financial barriers to preserve market share? In Regeneron, the First Circuit focused on whether the government could tie the alleged kickback to actual claims in a but-for sense. That forces litigants to move beyond broad allegations of “taint” and toward proof about decision-making in the real world.

Compliance officers also know a frustrating truth: safe harbors are helpful, but not every business arrangement fits neatly inside one. OIG’s safe-harbor framework is valuable because it tells industry participants what kinds of payment practices may avoid AKS treatment, but it does not bless creativity for creativity’s sake. When executives say, “We found a new structure nobody has tried before,” compliance counsel rarely hears innovation; they hear distant thunder. The practical experience from years of AKS enforcement is that novel arrangements involving referral sources, utilization, or patient cost-sharing deserve skepticism early, not after the subpoena arrives.

Whistleblower experience matters too. The FCA remains powered in large part by insiders who see conduct up close and decide to file. DOJ reported 1,297 qui tam suits in fiscal year 2025, the highest number in a single year. That means companies should assume employees, former employees, consultants, and competitors are all potential narrators in the story of an arrangement. If the internal justification for a payment sounds weak, inconsistent, or overly cute in an email, it may one day sound even worse in a complaint. Nobody has ever improved an AKS case by typing, “Let’s keep this off compliance’s radar.”

Finally, the real experience after a decision like Regeneron is not that the work stops. It changes shape. Plaintiffs refine theories. Defendants press causation. Judges ask sharper questions. Compliance teams revisit old relationships that were approved under a softer enforcement mood. And companies operating nationally must remember that circuit geography still matters. In the First Circuit, but-for causation now carries real force in AKS-per-se FCA cases. In the Third Circuit, the government still has a friendlier causal framework. So the smartest response is not triumphalism. It is disciplined documentation, cleaner contracting, tighter oversight, better training, and a very healthy suspicion of arrangements that seem too commercially elegant to be legally innocent.

Conclusion

The First Circuit’s adoption of the but-for standard in AKS-based FCA cases is one of the most important healthcare fraud decisions in recent years. It raises the bar for plaintiffs using the 2010 AKS amendment as an automatic route to FCA falsity, aligns the First Circuit with the Sixth and Eighth Circuits, and sharpens the existing circuit split with the Third Circuit. But this is not a free pass for the healthcare industry. The AKS remains broad, OIG guidance remains relevant, false-certification theories remain available, and DOJ continues to treat healthcare fraud as a top FCA priority. The safest takeaway is simple: if money, referrals, utilization, and federal reimbursement are all in the same room, someone in compliance should be there too. Preferably before the coffee gets cold.