The Medicare Anti-Kickback Statute, 42 U.S.C. 1320a-7b, prohibits knowingly and willfully offering or paying any remuneration (including kickbacks, rebates, or bribes) in cash or in kind to any person to induce that person to make referrals for federal healthcare programs. Courts have previously held that falsely certifying compliance with the Anti-Kickback Statute, or AKS, regarding a claim submitted to a federally funded insurance program can result in liability under the False Claims Act. See US ex rel Wlkins v. United Healthcare Group, Inc., 659 F.3d 295, 312 (3rd Cir. 2011). In Wilkins the Third Circuit addressed whether two whistleblowers, or “relators”, properly alleged claims that the insurer-defendants violated the False Claims Act, 31 USC 3729, through the defendants’ submission of claims for payment by the federal government.

The Third Circuit in Wilkins found that the whistleblowers properly alleged that the insurers knowingly violated AKS while submitting claims for payment under Medicare. Significantly, the court noted that the whistleblowers “need not allege a relationship between the alleged AKS violations and the claims the [insurers] submitted to the government.” Id. at 313. Instead, the court found that the complaint instead established an implied false certification claim under the False Claims Act. Drawing on other cases, the Wilkins court noted that an “implied false certification occurs when an entity has previously undertaken to expressly comply with a law, rule or regulation, and that obligation is implicated by submitting a claim for payment even though a certification of compliance is not required in the process of submitting the claim.”

The Wilkins decision is interesting, not only because of the guidance it provides whistleblowers who seek to allege a claim under the False Claims Act. The decision does more – it provides guidance to organizations who engage in business under Medicare, explaining what is necessary to avoid liability under the FCA. The court explains that in order to avoid FCA liability under an implied certification theory, businesses submitting claims to the government must ensure that they are not violating healthcare laws they agreed to abide by when they entered in to contracts with CMS. As the court stated, “for purposes of the FCA, this compliance does not require perfect adherence to regulations which are not prerequisites to payment from the government. Compliance, however, does require a participant in a federal health care program to refrain from offering or entering into payment arrangements which violate AKS, while making claims for payment to the government under that program.” Id. at 314.

The Third Circuit in Wilkins, in citing to a government brief, explained how violating the Anti-Kickback Statute also violates the False Claims Act: “[t]he government does not get what it bargained for when a defendant is paid by CMS for services tainted by a kickback.” It was this reasoning that supported the court’s finding that the whistleblowers, by alleging that the insurer-defendants violated the AKS while submitting claims for payment to a federal health insurance program, stated a plausible claim for relief under the False Claims Act. Id.

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Jason Cornell is an attorney who represents whistleblowers with the law firm Clark Fountain LaVista Prather Keen & Littky-Rubin. Clark Fountain represents plaintiffs in various matters throughout the United States. If you have questions regarding the issues addressed in this or other posts, you can reach Jason at 561 899-2111, or jcornell@clarkfountain.com.