DOJ Announces “First in the Nation” Fraud Charges for Abuse of Pandemic Telehealth Flexibilities
Yesterday DOJ announced another round of coordinated law enforcement actions to combat healthcare fraud related to COVID-19. One of these indictments features “first in the nation charges for allegedly exploiting the[] expanded” opportunities to receive Medicare reimbursement for telehealth services during the COVID-19 public health emergency.
Sunshine Act Enforcement No Longer Just on the Horizon
DOJ recently announced its second FCA settlement within the past half year that resolves alleged Anti-Kickback Statute (“AKS”) violations and corollary failures to satisfy Sunshine Act reporting obligations. Before this pair of settlements, neither DOJ nor CMS has publicly announced any targeted efforts to enforce the Sunshine Act, and these settlements seem to be on the cutting edge of an emerging government enforcement priority.
DOJ Continues Focus on COVID-19 Fraud with Formation of Task Force and Warning to Vaccine Providers
This week DOJ announced the formation of a COVID-19 Fraud Enforcement Task Force “to marshal the resources of the Department of Justice in partnership with agencies across government to enhance enforcement efforts against COVID-19 related fraud.” In addition to components of DOJ, key agencies overseeing pandemic relief programs will participate, as well as the Special Inspector General for Pandemic Relief and the Pandemic Response Accountability Committee.
How Life Sciences Firms Can Reduce DOJ Enforcement Risks
Sidley lawyers Jaime L.M. Jones, Brenna E. Jenny, and Jack Pirozzolo recently published an article in Bloomberg Law entitled How Life Sciences Firms Can Reduce DOJ Enforcement Risks. Scrutiny of life sciences companies, from their relationships with physicians to their promotional practices, has become one of the few constants in the evolving government enforcement landscape. But life sciences companies can mitigate this risk by making targeted updates to their compliance programs to address areas of particular interest to the Department of Justice.
A copy of the article is available here.
District Court Concludes Accurate PDE Data Can be “False Claims” Under the FCA
A district court in the District of New Jersey recently amended its dismissal of a qui tam suit to allow the relator to file a fourth amended complaint against a pharmacy asserting a new theory of liability that prescription drug event (“PDE”) data are “claims” under the FCA and accurate PDE data can be “false claims” under the FCA where a pharmacy pays kickbacks to its customers. United States ex rel. Silver v. Omnicare Inc., No. 11-cv-01326, (D.N.J. Apr. 13, 2021).
DOJ Tries to Take Materiality Off the Table for Drug Company Motions to Dismiss
In a recent Statement of Interest, DOJ articulated a problematic, and incorrect, theory of materiality in an apparent effort to make it virtually impossible for defendants to defeat bare allegations of materiality at the motion to dismiss stage in cases that involve allegedly false claims for prescription drugs.
COVID-19 Uninsured Program Under the Microscope
DOJ has repeatedly emphasized its commitment to pursuing fraud relating to the COVID-19 public health emergency (as discussed further here). But so far, little has been made public regarding enforcement scrutiny of payments from the Department of Health and Human Services Provider Relief Fund, which includes a designated fund for reimbursing providers for COVID-19 testing, treatment, and vaccination for the uninsured (“COVID-19 Uninsured Program”).
However, HHS officials recently announced that they had referred to the HHS Office of Inspector General a provider that is an outlier on reimbursement for treatment claims from the COVID-19 Uninsured Program. Providers that have received payments from the COVID-19 Uninsured Program should take steps to ensure that they are in full compliance with the terms and conditions for payment, including the balance billing restriction.
Sidley lawyer Brenna Jenny recently authored an article, available here, discussing this enforcement development.
Preparing for FCA Scrutiny of Pandemic Billing Flexibilities
Sidley lawyers Jaime L.M. Jones, Brenna E. Jenny, and Catherine D. Stewart recently published an article in Bloomberg Law entitled Tips for Responding to a DOJ Inquiry Into Pandemic Billing. The Department of Health and Human Services extended significant billing flexibility to providers during the COVID-19 public health emergency, and law enforcement can be expected to closely examine how providers have exercised those more relaxed rules. The article offers tips for the in-house legal and compliance functions of healthcare providers as to how they can best position their organizations for successfully engaging with DOJ and state attorneys general on False Claims Act investigations relating to the use of pandemic billing flexibilities.
A copy of the article is available here.
Managing the Next Big False Claims Act Whistleblower: Your Data
Sidley lawyer Brenna Jenny, along with Mihran Yenikomshian and Paul Greenberg of Analysis Group, authored an article entitled “Health Companies Can Reduce FCA Risk by Leveraging Data,” available here. One of the most notable recent trends in FCA enforcement is an evolution in how DOJ identifies cases for investigation. No longer reliant solely on whistleblowers, DOJ has begun implementing increasingly sophisticated data analytics to initiate many of its own FCA cases, as discussed further here and here. The article discusses how healthcare industry participants can defensively deploy their own data to identify potential problems through internal investigations before they become part of government investigations.
District Court Issues Rare Rebuke Denying DOJ’s Belated Motion to Intervene
A federal district court recently issued a rare order denying the Department of Justice’s (DOJ) motion to intervene in a qui tam suit after the government’s initial declination months earlier. See United States ex rel. Odom v. Southeast Eye Specialists, PLLC, 3:17-cv-00689 (M.D. Tenn. Feb. 24, 2021). The False Claims Act allows the government to intervene in a case in which it previously declined to intervene upon “a showing of good cause.” Although DOJ does so not frequently seek to intervene after previously declining to do so, courts are generally deferential to the government’s shift in position. This decision provides important precedent for defendants in the position of arguing that a late intervention by DOJ is not appropriate.