The US Court of Appeals for the First Circuit has issued a significant decision in the case of United States v. Regeneron Pharmaceuticals, impacting healthcare compliance and defense strategies. The court adopted a stringent “but-for” causation standard for claims under the False Claims Act (FCA) based on violations of the Anti-Kickback Statute (AKS). This aligns with decisions from the Sixth and Eighth Circuits and contrasts with the Third Circuit’s more lenient “causal link” standard.
While this decision does not fundamentally change compliance program structures or AKS requirements, it introduces potential defenses for those facing AKS allegations. Healthcare providers and companies are encouraged to review their compliance processes to ensure thorough documentation of medical necessity.
To mitigate false claims liability under this new standard, companies should focus on presenting clear evidence of medical necessity. If services or supplies are demonstrably necessary, proving “but-for” causation becomes more challenging for the government or relator’s counsel.
Pharmaceutical companies might consider implementing monitoring programs to assess the medical necessity of orders by healthcare professionals with financial ties to them. Other companies could require certification that tests are medically necessary when ordered or processed, which could support their defense against allegations.
The First Circuit’s decision also highlights the importance of maintaining accurate records in interactions between pharmaceutical companies and healthcare professionals. Proper documentation can be crucial in defending against false claims allegations. Companies might also strengthen provider attestation requirements to affirm that services were medically necessary and uninfluenced by external factors.
Regarding speaker programs, it may now be advantageous to select speakers who have previously prescribed or ordered services independently of financial incentives. This approach suggests that prescribing behavior is not solely driven by compensation as speakers.
The ruling is part of ongoing changes in legal standards affecting healthcare compliance related to false claims. While it complicates some aspects for government cases, it should not drastically alter existing compliance protocols since it does not affect underlying kickback analysis.
As circuit splits deepen, healthcare companies should prepare for possible US Supreme Court review while ensuring robust compliance frameworks emphasizing medical necessity and thorough recordkeeping.
For further insights into how this decision may impact your practices or assistance in strengthening them, contact any listed lawyers below.
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