Last week, the Sixth Circuit issued an important decision limiting the scope of claims alleging violations of the Anti-Kickback Statute that are brought under the False Claims Act. See Shannon Martin, M.D., et al. v. Hathaway, et al., No. 22-1463 (March 28, 2023). Chief Judge Sutton wrote the opinion for the Court, which Judge Siler joined in full. Judge Mathis joined in part and in the judgment.
As many of our readers know, the False Claims Act imposes civil liability for "knowingly present[ing], or caus[ing] to be presented, a false or fraudulent claim [to the government] for payment or approval." 31 U.S.C. ' 3729(a)(1)(A). The Act covers many types of false claims, including claims for "items of services resulting from a violation" of the Anti-Kickback Statute, 42 U.S.C. ' 1320a-7b(g). The Anti-Kickback Statute, in turn, prohibits medical providers from making referrals "in return for" "remuneration." Id. ' 1320a-7b(b)(1)(A).
In Hathaway, the Sixth Circuit clarified the meaning of "remuneration" and "resulting from" under these provisions. The case arose from a business dispute between two physicians who maintained an ophthalmology practice in a small Michigan city called Marshall. One of the physicians was the owner of the practice and the other was an employee. The ophthalmology practice was the only local option available to patients of a local hospital when those patients required ophthalmology services. Both the ophthalmology practice and the hospital referred many patients to each other over the years.
One day, the employee physician discovered that the owner physician was negotiating a merger with another ophthalmology practice in another city. When the employee discovered she might lose her job in the process, she sought, and eventually received, a tentative offer to be a physician at Oaklawn Hospital, subject to...
