In the Spring of 2023, the Sixth Circuit, which is the federal appellate court with jurisdiction for Kentucky, Michigan, Ohio and Tennessee, issued an unprecedented opinion in Martin v. Hathaway, holding for the first time by a federal appellate court that “remuneration” in the federal Anti-Kickback Statute (AKS) means “just payments and other transfers of value” and not “any act that may be valuable to another.” 

Additionally, the Sixth Circuit joined the Eighth Circuit, the federal appellate court with jurisdiction for Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota and South Dakota, in determining that reliance on a violation of the AKS to find a violation of the False Claims Act (FCA) requires a showing of “but-for” causation, deepening a split with the Third Circuit, the federal appellate court with jurisdiction for Pennsylvania, New Jersey, Delaware and the U.S. Virgin Islands,  on what connection is required between a kickback and a subsequent reimbursement claim. 

The Facts of the Case

In Martin v. Hathaway, Dr. Martin, an ophthalmologist sued her former employer, Dr. Hathaway, the owner of an ophthalmology practice, and Oaklawn, the local hospital, under the federal and state False Claims Acts. Dr. Martin alleged that Dr. Hathaway and Oaklawn engaged in an illegal fraudulent scheme under the AKS. 

The alleged scheme involved Dr. Hathaway interfering with Oaklawn hiring Dr. Martin by informing Oaklawn that the hiring would force Dr. Hathaway to refer his patients to a different hospital where he could perform surgical procedures instead of referring to Oaklawn where Dr. Martin would be on staff to perform the procedures for the hospital, cutting into Dr. Hathaway’s revenue stream.  


The AKS prohibits payment or receipt of “remuneration” in exchange for referrals of patients to receive services paid for by federal or state health care programs. The Sixth Circuit determined that Oaklawn’s refusal to hire Dr. Martin in return for Dr. Hathaway’s continued surgical referrals was not “remuneration” under the AKS. 

The term “remuneration” is not defined in the AKS. Instead, the Sixth Circuit looked to the dictionary definitions of “remuneration,” other federal law definitions of “remuneration,” the U.S. Health and Human Services’ Office of the Inspector General opinions and the general theme of the AKS safe harbors to determine that “remuneration” requires a transfer of payment or value. 

The court determined that Oaklawn’s decision not to hire Dr. Martin was too attenuated from the referrals made by Dr. Hathaway to Oaklawn to find that the decision could be “remuneration.” The court pointed to the fact that there wasn’t any agreement in place between Oaklawn and Dr. Hathaway, no requirement for a specific volume of referrals, and no time frame for the agreement to take place. Additionally, the court argued that because the AKS creates both civil and criminal liability, a narrower definition of “remuneration” is appropriate where the statutory language is ambiguous.


The FCA imposes civil liability for knowingly submitting a false or fraudulent claim to the government for payment. The AKS prohibits payment or receipt of “remuneration” in exchange for referrals of patients to receive services paid for by federal or state health care programs. Any claims “resulting from” an AKS violation, which is a criminal statute, are considered false claims for purposes of the FCA. 

To find a violation of the FCA in reliance on a violation of the AKS, a court must determine that the claims at issue “resulted from” the illegal “remuneration” under the AKS. Relying on the 2014 Supreme Court decision in Burrage v. United States, the Sixth Circuit in Martin v. Hathaway determined that the ordinary meaning of “resulting from” is but-for causation, meaning that the referral would not have occurred “but-for” Oaklawn’s refusal to hire Dr. Martin.  

The Sixth Circuit determined that Dr. Martin had not alleged the required causation because the decision by Oaklawn not to hire Dr. Martin, allegedly to maintain a referral source in Dr. Hathaway, did not change anything in the referral relationship between Oaklawn and Dr. Hathaway. Therefore, the decision did not cause the referrals. 

The Sixth Circuit joins the Eighth Circuit in determining that “but-for” causation is the appropriate standard in these cases. In opposition, the Third Circuit in 2018, held that some connection is required between the illegal kickback and the submission of a claim, but it is not necessary to prove that the claim would not have occurred without the kickback. The Third Circuit reasoned that health care fraud is often difficult to prove and a more lenient interpretation would increase the challenges in FCA enforcement cases based on the AKS. 


The Sixth Circuit in Martin v. Hathaway provides an opportunity for other circuits to adopt the narrower definition of “remuneration” and join the circuit split on the required causation to find an FCA violation under the AKS, making it more difficult for the government and individual complainants to bring successful AKS and FCA cases against providers.