McGuireWoods Trio Pens Article on Anti-Kickback Ruling

May 20, 2022

Thomson Reuters Westlaw recently published a column by McGuireWoods partners Brett Barnett and Timothy Fry and associate Garrison B. Ambrose highlighting a federal court ruling that said violations of the Anti-Kickback Statute are per se material under the False Claims Act.

In the May 9, 2022, practitioner insights commentary titled “District court finds that AKS violations are per se material,” the McGuireWoods attorneys analyzed the U.S. District Court for the Central District of California’s decision to grant the government’s affirmative motion for partial summary judgment in United States v. Reliance Medical Systems. The analysis was originally published on The FCA Insider, a McGuireWoods blog covering False Claims Act litigation issues.   

The U.S. Department of Justice alleged that several physician-investors in various spinal implant distribution companies recommended spinal fusion surgeries even when they weren’t medically necessary, which compelled a need for their own spinal implant devices. The government sought partial summary judgment on the grounds that, as a matter of law, the physician-investors’ alleged AKS violations were material for FCA purposes.

The Reliance Medical court agreed with the majority of courts in holding that compliance with the AKS is per se material to the payment of Medicare claims. Citing various cases and quoting language articulated by the 1st U.S. Circuit Court of Appeals, it reasoned that the Affordable Care Act obviated the need for a plaintiff to plead materiality.

“In sum, the court found that compliance with the AKS was per se material to the payment of Medicare claims as regards claims that pre and postdate the ACA’s 2010 enactment. Therefore, the court granted the government’s motion for partial summary judgment in substantial part,” the attorneys wrote.

“As it stands, courts are trending toward agreeing with the California district court and finding that compliance with the AKS is per se material for the payment of Medicare claims regardless of the date of the claim.”