Welcome to Original Source: The Sidley Austin False Claims Act Blog

The False Claims Act (FCA) has long been a key enforcement tool for the federal government in matters involving government contracts or other expenditures of government funds. FCA enforcement has traditionally focused primarily on two industries receiving a substantial amount of government funds: healthcare and defense and other government contractors. Recently, however, FCA enforcement has expanded to other industries, including financial services. Through the False Claims Act Blog, lawyers in Sidley’s White Collar, Healthcare, FDA, Government Contracting, Financial Services, Appellate, and other practices will provide timely updates on new and interesting developments relating to FCA enforcement and litigation.

Follow us on Twitter:

November 13, 2014 4:38 PM | Posted by Scott Stein and Brenna Jenny | Topic(s): Overpayments
As we previously reported, the Department of Justice (“DOJ”) recently filed its first FCA suit premised solely on the untimely return of overpayments. DOJ’s November 10, 2014 memorandum in opposition to defendants’ (“Continuum’s”) motion to dismiss (which we discussed here), confirms that DOJ seeks to stake out an expansive argument for such claims. read more
November 12, 2014 2:45 PM | Posted by Scott Stein and Brenna Jenny | Topic(s): Discovery
We recently reported on several decisions supporting the expanded use of statistical sampling in FCA cases to support liability determinations. On November 5, 2014, a federal district court in Nevada joined the recent opinions of other courts in expressing receptiveness to the expanded use of statistical sampling beyond the context of establishing damages. The relator, who formerly worked for the defendant hospital system (“Renown”) as its director of clinical documentation, brought a FCA suit alleging that Renown improperly submitted claims for short-stay inpatient admissions that should have been billed as outpatient claims. In June 2014, Renown produced data on claims for short-stay admissions spanning three-and-half years and several diagnosis-related group (“DRG”) codes. Relator, however, argued that Renown should be ordered to produce all Medicare claims data necessary to enable her to develop a statistical sampling plan capable of estimating the false claims submitted by Renown during the full course of the alleged upcoding scheme. read more
November 3, 2014 1:33 PM | Posted by Scott Stein | Topic(s): Anti-Kickback Statute, Rule 9(b), Stark Law
On October 30, 2014, the Eleventh Circuit issued a 41-page unpublished opinion affirming in part the dismissal of an FCA complaint under Rule 9(b), holding that the relator failed to plead sufficient “indicia of reliability” with respect to his claims based on conduct allegedly occurring after his employment by the defendants ended. read more
October 31, 2014 11:52 AM | Posted by Scott Stein and Christopher Munsey | Topic(s): Original Source, Public Disclosure
In an October 29, 2014 opinion in Malhotra v. Steinberg, the Ninth Circuit affirmed the dismissal of an FCA action under the public disclosure bar, holding that information obtained from a deposition taken by the Office of the United States Trustee in a bankruptcy case was publicly disclosed where the relators learned of key facts on which the complaint was based in the deposition, and the relators were “outsiders” to the Trustee’s Office investigation. read more
October 27, 2014 1:14 PM | Posted by Scott D. Stein and Jessica Rothenberg | Topic(s): Original Source
On October 20, the Third Circuit affirmed the dismissal of a qui tam suit on the ground that a relator whose knowledge was based on review of documents and discussions with other company employees did not have “direct and independent knowledge” such that he satisfied the original source exception to the pre-PPACA public disclosure bar. The relator, a former employee of Medco (a pharmacy benefit management company), alleged that two pharmaceutical manufacturers violated the FCA by (1) misreporting their average and best prices for drugs sold to government health programs, and (2) improperly inducing health plans managed by Medco to favor their drugs. The relator claimed to have learned of defendants’ alleged fraud while a senior executive at Medco, during which time he met with representatives of the defendant manufacturers to negotiate agreements, and reviewed and discussed with colleagues agreements with defendants and other internal Medco documents. read more
October 23, 2014 12:18 PM | Posted by Jaime L.M. Jones and Emily Van Wyck | Topic(s): Damages
A Florida federal district court granted a motion for a new trial on damages after an $89.6 million default judgment was entered for False Claims Act violations by a doctor and cancer treatment center. See United States ex rel. McBride v. Makar, No. 8:12-cv-792-T-27MAP, 2014 WL 5307469 (M.D. Fla. Oct. 15, 2014). The court entered a default judgment against the defendant physician and American Cancer Treatment Centers, Inc. (“ACTC”) after defendants failed to respond to the complaint. In calculating damages, the court relied on data compiled by the relator from Medicare records reflecting the total amount paid in reimbursement by the government for all claims submitted by defendants during the time period at issue. read more
October 13, 2014 11:57 AM | Posted by Jonathan F. Cohn and Brian P. Morrissey | Topic(s): Anti-Kickback Statute, Knowledge/Scienter, Stark Law, Privilege Issues
A federal district court in Georgia has ordered a defendant in a False Claims Act case to produce attorney-client privileged communications to the qui tam relator. See United States ex rel. Barker v. Columbus Regional Healthcare System, Inc., No. 4:12-cv-108 (CDL), 2014 WL 4287744 (M.D. Ga. Aug. 29, 2014). The court ruled that the defendant, Columbus Regional Healthcare System, impliedly waived the privilege by pleading in its answer that it did not knowingly violate the FCA and indicating that it would offer evidence at trial that it believed its conduct was lawful. read more
October 10, 2014 4:14 PM | Posted by Jonathan F. Cohn and Brian P. Morrissey | Topic(s): Public Disclosure, Relators, Privilege Issues
A federal magistrate judge in West Virginia has granted an FCA defendant’s request to depose relators’ counsel regarding non-privileged discussions in which relators learned of the conduct they alleged in their complaint, on the grounds that such information is central to defendants’ argument that relators’ claims are foreclosed by the public disclosure bar. United States ex rel. May v. Purdue Pharma L.P., No. 5:10-1423, 2014 WL 4960944 (S.D. W. Va. Oct. 2, 2014). read more
October 2, 2014 1:33 PM | Posted by Jaime L.M. Jones and Brenna Jenny | Topic(s): Rule 9(b)
Although relators and the government have long leveraged statistical inferences to estimate damages in FCA cases, in two recent opinions, courts have permitted the extension of these approaches to efforts to establish FCA liability. This is a troubling signal for defendants because, particularly when utilized in conjunction with the lower pleading standard of certain circuits, these decisions will make it easier for FCA plaintiffs to fend off a motion to dismiss. read more
September 30, 2014 11:51 AM | Posted by Jonathan Cohn | Topic(s): Enforcement, Health Care Providers, Civil Investigative Demands
Earlier this month, the Justice Department announced that federal prosecutors are increasing their scrutiny of whistleblower complaints that allege fraud against the government, in order to discover evidence of criminal conduct. read more
older posts »
Subscribe to this blog by email. Name and email address required.