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.

Senator Grassley Pushes Back on DOJ’s View of Its Right to Seek to Dismiss FCA Actions over Relators’ Objections

In a May 4, 2020 letter to Attorney General William Barr, Senator Chuck Grassley “vehemently” disagreed with the Department of Justice’s (“DOJ”) view, expressed in a brief recently filed with the Supreme Court by the Solicitor General, that the DOJ’s authority to dismiss an FCA claim “is an unreviewable exercise of prosecutorial authority.”  As a principal author of the 1986 FCA amendments that substantially expanded the whistleblower provisions, Senator Grassley argued that he could “confidently say” that the text of the FCA plainly states that the court—not DOJ—should decide whether the government’s motion to dismiss a qui tam claim succeeds.

Read More

SHARE
EmailShare

Clinical Laboratory to Pay $43 Million to Resolve FCA Liability for Medically Unnecessary Tests; Settlement Demonstrates Importance of Addressing Employee Compliance Concerns

A specialty laboratory recently agreed to pay up to $43 million to resolve FCA claims based on allegations raised internally and later in a whistleblower complaint filed by its former Chief Medical Officer (CMO). The defendant, Genova Diagnostics Inc. (“Genova”), provides laboratory testing services focused on potential interactions between the environment and the gastrointestinal, endocrine, and immune systems.  The tests are used by functional medicine specialists to help develop treatment regimens.

Read More

SHARE
EmailShare

Ninth Circuit Holds That the FCA Does Not Require Objective Falsehoods and That False Certification of Medical Necessity May Give Rise to FCA Liability

On March 23, 2020, the Ninth Circuit revived a whistleblower suit in which Jane Winter, a registered nurse, alleged that Defendants Gardens Regional Hospital (“Gardens Regional”), S&W Health Management Services (“S&W Health”), RollinsNelson, and various physicians orchestrated medically unnecessary inpatient admissions resulting in the submission of more than $1.2 million in false claims to Medicare.  The District Court held that Winter’s allegations failed to state a claim under the FCA because “subjective medical opinions . . . cannot be proved objectively false.”  Winter appealed and the Ninth Circuit reversed, finding that the FCA did not does not require plaintiffs to plead objective falsehoods and that false certification of medical necessity may give rise to FCA liability.

Read More

SHARE
EmailShare

DOJ Declines to Intervene in Risk Adjustment Qui Tam Suit Brought Against Numerous Medicare Advantage Plans

On March 6, 2020, the United States District Court for the Central District of California unsealed a qui tam complaint filed in May 2018 against Mobile Medical Examination (“MedXM”) and a number of Medicare Advantage Organizations (“MAOs), including, United Healthcare, Wellpoint, Aetna, Health Net, and Molina Healthcare.  The qui tam suit, which was brought by former employees of MedXM, alleged that the defendants engaged in a scheme to submit false claims for payment to the federal healthcare programs by inflating risk adjustment payments and providing kickbacks to MA enrollees.  The Department of Justice declined to intervene in the suit.

Read More

SHARE
EmailShare

DOJ Says Its Authority to Dismiss Qui Tam Suits Is Expansive Notwithstanding Circuit Split

In its May 4, 2020 Opposition to the Petition for Writ of Certiorari in United States ex rel. Schneider v. JPMorgan Chase NA, the Department of Justice (“DOJ”) advocated a reading of the FCA that preserves the Executive Branch’s unfettered discretion to dismiss a qui tam, absent “extraordinary circumstances.”  DOJ’s power to dismiss derives from FCA Section 3730(c)(2)(A), which provides that the Government “may dismiss” a relator’s action if the relator “has been notified by the Government of the filing of the motion and the court has provided the person with an opportunity for a hearing on the motion.”  Since the revealing of the Granston Memo, which we have addressed here and here, DOJ has more frequently sought to use this statutory power.  In hopes of doing so in an unrestricted manner, DOJ presented the Supreme Court with the following question in its Opposition: “Whether the United States’ decision to dismiss a relator’s FCA claim under Section 3730(c)(2) is subject to judicial review where the relator does not allege that the government’s dismissal decision was a fraud on the court.”

Read More

SHARE
EmailShare

DME Supplier Pays $37.5M to Settle AKS-Based FCA Claims Across Five Qui Tam Suits

DOJ has announced that ResMed Corp., a manufacturer of durable medical equipment (DME) that treats sleep apnea and other chronic respiratory diseases, has agreed to pay $37.5 million to settle claims under the False Claims Act based on allegations that ResMed paid kickbacks to DME suppliers, healthcare providers, and other entities in violation of the federal Anti-Kickback Statute.  In particular, DOJ alleged that ResMed “(a) provided DME companies with free telephone call center services and other free patient outreach services that enabled these companies to order resupplies for their patients with sleep apnea, (b) provided sleep labs with free and below-cost positive airway pressure masks and diagnostic machines, as well as free installation of these machines, (c) arranged for, and fully guaranteed the payments due on, interest-free loans that DME suppliers acquired from third-party financial institutions for the purchase of ResMed equipment, and (d) provided non-sleep specialist physicians free home sleep testing devices.”

Read More

SHARE
EmailShare
1 2 3 80
SHARE
EmailShare
XSLT Plugin by BMI Calculator