United States of America et al v. Biogen Idec Inc., 1:12-cv-10601

Background:

Relator Michael Bawduniak alleged Biogen paid kickbacks to health-care providers, causing fraudulent Medicare/Medicaid reimbursement claims in violation of the False Claims Act (FCA) and various state false claims acts.
Relator moved for a determination that violations of the federal Anti‑Kickback Statute (AKS) are per se material to FCA claims; the United States supports Relator’s position.
The State of Texas filed a Statement of Interest addressing interpretation of the Texas Medicaid Fraud Prevention Act (TMFPA); Biogen opposed Relator and challenged Texas’s interpretation.
The 2010 PPACA amendment to the AKS added §1320a‑7b(g), stating claims including items or services resulting from AKS violations “constitute[] a false or fraudulent claim for purposes of” the FCA.
The court concluded that an AKS violation is a per se violation of the federal FCA (including for claims predating the 2010 amendment) and of the named state false claims acts other than Texas’s; the TMFPA will be interpreted under Texas law and jury instructions will follow the parties’ agreed formulation.

Issues:

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether an AKS violation is per se a false claim under the FCA	AKS violation “constitutes” a false claim under §1320a‑7b(g), obviating a separate materiality requirement	Escobar’s demanding materiality standard requires case‑specific proof that the violation was material to the government’s payment decision	Court held AKS violations are per se violations of the FCA (no separate materiality pleading required)
Applicability to claims predating the 2010 AKS amendment	The amendment codified the pre‑existing view that AKS noncompliance was material; thus pre‑2010 claims are covered	Biogen argued the First Circuit’s reasoning in Guilfoile focused on post‑amendment claims and is not dispositive for pre‑2010 claims	Court held AKS violations are per se violations of the FCA even for claims before March 23, 2010
Whether federal AKS violations are per se violations of the identified state false claims acts (except Texas)	AKS violations should be treated as per se false claims under analogous state statutes	Biogen contended state statutes incorporate the same materiality inquiry as the FCA and opposed a per se ruling	Court found federal AKS violations are per se violations of the listed state statutes (other than Texas)
How to treat Texas’s TMFPA and any materiality requirement	Relator proposed differing instructions for the TMFPA, acknowledging it isn’t identically modeled on the FCA; Texas argued AKS violations are per se violations under TMFPA	Biogen disputed Relator’s characterization and noted no allegation of a Texas AKS violation	Court held TMFPA interpretation is governed by Texas law and will instruct the jury consistent with the parties’ agreed language (with a minor edit)

Key Cases Cited

Guilfoile v. Shields, 913 F.3d 178 (1st Cir. 2019) (interpreting §1320a‑7b(g) to treat AKS‑derived claims as per se false under the FCA)
Universal Health Servs., Inc. v. Escobar, 579 U.S. 176 (U.S. 2016) (articulating demanding materiality standard for FCA claims)
United States ex rel. Lutz v. United States, 853 F.3d 131 (4th Cir. 2017) (AKS violation resulting in payment qualifies as a false claim)
United States ex rel. Greenfield v. Medco Health Sols., Inc., 880 F.3d 89 (3d Cir. 2018) (analyzing causal link between AKS violation and FCA liability)
U.S. ex rel. Hutcheson v. Blackstone Med., Inc., 647 F.3d 377 (1st Cir. 2011) (discussing judicially created materiality in FCA context)