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.

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May 21, 2015 3:32 PM | Posted by Scott Stein | Topic(s): Enforcement, Medicare Advantage

On May 19, Senator Charles Grassley sent letters to Attorney General Loretta Lynch (here) and to the Acting Administrator of CMS (here) demanding information concerning fraud investigations involving Medicare Advantage plans. The letters cite news reports suggesting that some Medicare Advantage plans are fraudulently manipulating risk scores, which reflect the acuity of their patient populations are used to determine reimbursement from CMS. Asserting that “risk score gaming [has] caused approximately $70 billion in improper Medicare Advantage payments,” Senator Grassley requests that CMS and DOJ articulate what steps they are taking to address fraudulent altering of risk scores, how many investigations of risk score fraud have been conducted within the last five years, and what administrative or enforcement actions have been taken to address risk score fraud.

These letters are significant because Senator Grassley is Chair of the Senate Judiciary Committee, one of the architects of the modern False Claims Act, and a founder of the recently-formed Senate Whistleblower Protection Caucus. While there have been relatively few unsealed False Claims Act cases against Medicare Advantage plans, we expect the volume of such suits to accelerate over the coming years as federal spending continues to increase.

May 18, 2015 2:30 PM | Posted by Jonathan Cohn and Brian Morrissey | Topic(s): Original Source, Financial Services, Public Disclosure, OH-ND
On May 12, a federal district court dismissed what the New York Times had described as an “innovativequi tam suit against U.S. Bank, N.A., alleging that the lender had submitted over $2.3 billion in false claims for FHA insurance payments. United States v. U.S. Bank, N.A., No. 3:13-cv-704 (N.D. Oh. May 12, 2015). In an unusual step, the suit was brought by a legal aid group, Advocates for Basic Legal Equality, Inc. (“ABLE”), rather than by an individual relator. read more
May 8, 2015 12:24 PM | Posted by Jack Pirozzolo, Jaime Jones, Brenna Jenny | Topic(s): Enforcement

Posted by Jack Pirozzolo, Jaime L.M. Jones and Brenna Jenny

Sidley lawyers Jack Pirozzolo, Jaime Jones, and Brenna Jenny recently published an article titled “Drug and Device Enforcement Trends to Watch” in the May 4, 2015 issue of BNA’s Pharmaceutical Law & Industry Report. A copy of the article can be downloaded here.

May 6, 2015 4:25 PM | Posted by Ellyce Cooper and Alexis Miller Buese | Topic(s): Discovery, Privilege Issues, TN-ED
In a recent opinion in United States ex rel. Martin v. Life Care Centers of America Inc., No. 08-cv-251 (E.D. Tenn. April 27, 2015), a federal district Court provided guidance regarding the standard for evaluating the government’s assertion of the deliberative process privilege. DOJ alleges that Life Care, a provider of skilled nursing services comprised of more than 200 facilities, submitted fraudulent claims to Medicare as part of a nationwide scheme to provide medically unnecessary services. The defendants’ discovery requests to the government sought, among other things, drafts of government reports, documents relating to funding for skilled nursing facilities, briefing papers, press releases; documents reflecting responses or comments on regulatory rules, and notes from meetings and emails of government officials. DOJ objected to many of the requests and provided thirteen privilege logs setting forth various claims of privilege, including the deliberative process privilege. read more
May 4, 2015 1:09 PM | Posted by Scott Stein and Brenna Jenny | Topic(s): Procedure, FL-MD, Upcoding
A court in the Middle District of Florida is the latest of a growing number of courts (as reported here and here) that has allowed relators to rely on statistical sampling in order to establish liability in FCA cases involving large numbers of claims. See United States ex rel. Ruckh v. Genoa Healthcare, LLC, No. 11-cv-01303 (M.D. Fla. Apr. 28, 2015). read more
April 29, 2015 2:37 PM | Posted by Ellyce Cooper, Michael Andolina and Amanda Farfel | Topic(s): Legislation

Posted by Ellyce CooperMichael Andolina and Amanda Farfel

On April 28, 2015, the Senate unanimously approved S. 304, the Motor Vehicle Safety Whistleblower Act. The bipartisan legislation was reported out of the Committee on Commerce, Science, and Transportation and placed on the Senate Legislative Calendar on April 13, 2015. The Committee modified the legislation, including additional provisions regarding the protection of whistleblower identities, extending the deadline for the Secretary to promulgate regulations consistent with the statute from 12 to 18 months, and providing that the Secretary may make an award to a whistleblower prior to the promulgation of the regulations. The legislation, as passed, can be found here, and the Committee Report can be found here. We first reported on the proposed legislation here.

The legislation now moves to the House of Representatives for consideration. We will continue to monitor the legislation.

April 23, 2015 12:28 PM | Posted by Gordon Todd and Paul Sampson | Topic(s): Intervention, Procedure, NY-SD
The Rule 15(a)(2) threshold for amending a complaint – that “[t]he court should freely give leave when justice so requires” – is not a high one. But from time to time even a State intervenor manages to miss it, as was the case in U.S. ex rel. Kester v. Novartis Pharmaceuticals Corp., No. 1:11-cv-08196, 2015 WL 1650767 (S.D.N.Y. Apr. 10, 2015). read more
April 17, 2015 12:01 PM | Posted by Gordon Todd and Adam Farra | Topic(s): Discovery, LA-ED
In a recent, sharply worded order, E.D. La. Magistrate Judge Joseph Wilkinson recently rejected the U.S. Justice Department’s objections of undue burden and expense, and ordered the Department to undertake a voluminous document review and production in response to FCA defendants’ discovery and motion to compel. read more
April 15, 2015 12:22 PM | Posted by Jaime L.M. Jones and Brenna Jenny | Topic(s): Anti-Kickback Statute, Public Disclosure, Rule 9(b), Off-Label, Release, PA-ED
A court in the Eastern District of Pennsylvania recently ruled that, despite a relator’s publication during an employment retaliation suit of allegations relating to the defendant’s alleged off-label promotion and payment of kickbacks, such allegations were not publicly disclosed, nor was the relator’s execution of a release of liability effective. U.S. ex rel. Gohil v. Sanofi-Aventis U.S. Inc., No. 02-cv-02964 (E.D. Pa. Mar. 30, 2015). This case demonstrates the way policy arguments regarding a perceived congressional intent in favor of private enforcement of the FCA can impact legal arguments in FCA litigation. read more
April 13, 2015 9:22 AM | Posted by Scott Stein and Amy Deline | Topic(s): Settlement, DC-D
As we have written about on this blog previously, Lance Armstrong’s former teammate, Floyd Landis, filed a qui tam suit alleging that Armstrong’s and his team’s use of performance enhancing drugs and practices violated their sponsorship agreement with the United States Postal Service and thereby defrauded the government of approximately $40 million over six years. Landis brought suit against Armstrong individually, as well as Armstrong’s management company, Tailwind Sports, and his talent agent, Capital Sports & Entertainment Holdings (CSE). The government joined in the claims against Armstrong and Tailwind Sports in February 2013, but declined to intervene against CSE. read more
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