Members of Robinson+Cole’s Health Care Enforcement + False Claims Act Litigation team, Edward J. Heath, Seth B. Orkand and Danielle H. Tangorre achieved a groundbreaking victory obtaining summary judgment in a False Claims Act (FCA) case in the District of Massachusetts this month. The court granted summary judgment in a FCA case in favor of a clinical laboratory and its owners. The case tested theories of liability that the government has used for years in FCA prosecutions, related to medical necessity of testing and the payment of commissions to independent contractor marketers. Of particular note, Judge Patti Saris held that the government or a relator must prove that a violation of the Anti-Kickback Statute (AKS) as the but-for cause of a false claim, a stricter standard that some other courts have adopted. “

The question on the causation standard has not only divided federal courts across the country, but it has also led to a split in decisions from the Massachusetts district court,” said attorneys Heath, Orkand and Tangorre in a statement to Law.com. The article also quoted Seth, “We are very pleased that Judge Saris recognized that the payment of commissions to independent contractors, although outside any AKS safe harbor, is not per se illegal…We are grateful for the Court’s thorough analysis of the facts in this case.”

Law360 also covered the decision pointing out that Judge Saris ruled that no reasonable jury could find that the commission arrangement had caused the submission of false claims or that the laboratory knowingly submitted false claims. Judge Saris pointed out that the doctor who owned the medical practice acknowledged having ordered the tests from MD Labs to substantiate FCA claims against the laboratory. This decision further deepens the divide within the District of Massachusetts where four judges are now split on the causation standard.

In their coverage of the decision, G2 Intelligence pointed out the numerous implications for clinical laboratories including the growing split among courts in determining FCA liability; answering the question of who is responsible for determining medical necessity; and expanding the discussion of who is liable for FCA violations. While some lab leaders may feel relieved, the article counsels that they should remain cautious as this recent summary judgment reflects the evolving landscape of FCA liability. They suggest that lab leaders continue to confirm the medical necessity of any test orders they receive and review their billing practices and all marketing materials.

The Dark Report noted that this decision “caught the attention of the legal field…” in their article “Federal Lawsuit Favors Lab Accused of AKS Violations,” published on January 27, 2025. Much of the judge’s decision related to the standard for determining a causal connection between payments to contractors and claims submitted to the government. Danielle commented that while Judge Saris adopted the “but-for” standard favored by some appellate courts, other courts have adopted a standard that would make is easier for an Anti-Kickback Statute charge to stick under the False Claims Act. Either way, this doesn’t necessarily mean that labs should reflexively return to old commission-based payment arrangements, she cautioned. Labs that do so could still be exposing themselves to costly litigation and penalties. Danielle said the decision is an important contribution to the limited case law surrounding commission payments to contractors. “We’ve seen several settlements between labs and the government over the last couple years, but few facts were made public. I think that we’ll see further developments as to case law developing under both AKS and EKRA, and what it means to fall outside the safe harbor.”

The District of Massachusetts' decision was also covered in the article, “Favorable Ruling for MD Labs in False Claims Case Is Big Win for Lab Industry,” published in the February 2025 issue of Laboratory Economics. Dismissing all counts in a whistleblower lawsuit, the decision is significant because it tested theories of liability that the government has used for years in False Claims Act prosecutions, explained Danielle. “[I]t addresses a few theories and is counter to a lot of the settlements we’ve seen in the last year and a half.” According to Danielle, takeaways from the ruling include the judge’s reaffirming that labs can rely on the ordering provider’s determination that ordered tests are medically necessary and that commissions to independent contractors are not per se illegal.

Massachusetts Lawyers Weekly highlighted the attorneys comments on the decision with Danielle adding that her client “was pleased with the thoroughness of Saris’ analysis and her dismissal of all theories of FCA liability,” and Seth noting that the “but-for standard” which has split the judicial colleagues is currently on appeal to the 1^st U.S. Circuit Court of Appeals in the case of U.S. v. Regeneron Pharms., Inc. Ed suggested that the decision serves as a “cautionary tale” to relators about the significance of their own conduct. “Judge Saris properly scrutinized the relator’s actions here, relying on them in dismissing the case,” Ed said, referencing the fact that Omni’s owner instructed his staff to order polymerase chain reaction testing from MD Labs even when the provider had selected a cheaper bacterial urine culture test for a particular patient, and that he did so in order to substantiate Omni’s FCA claims. Ed continued, “[A]s Saris pointed out in her decision, the relator caused claims for polymerase chain reaction testing that he knew were medically unnecessary.

The matter was also defended by Kevin Daly, Julianna Charpentier and Theresa Lane.