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.
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.
During the Federal Bar Association’s 2021 Qui Tam Conference, two senior government lawyers—Neeli Ben-David, the Civil Division Deputy Chief and Health Care Fraud Coordinator for the U.S. Attorney’s Office for the Northern District of Georgia and Karen Glassman, Senior Counsel at the U.S. Department of Health and Human Services Office of Inspector General (“HHS-OIG”)—provided insights into how defendants can position themselves for successful engagement with the government and how DOJ and HHS-OIG coordinate behind the scenes to investigate and resolve FCA cases.
Yesterday during the Federal Bar Association’s 2021 Qui Tam Conference, Charlene Keller Fullmer, the Civil Assistant Chief for the Eastern District of Pennsylvania, discussed how enforcement actions involving violations of the Sunshine Act are poised to increase, aided by data analytics.
Yesterday, Senator Grassley, the architect of the 1986 False Claims Act amendments, and Brian Boynton, the Acting Assistant Attorney General of DOJ’s Civil Division, delivered the opening remarks at the Federal Bar Association’s 2021 Qui Tam Conference, previewing Senator Grassley’s priority legislative changes to the FCA and DOJ’s enforcement priorities under the Biden administration.
Two recent decisions by district courts in the Third Circuit illustrate the continued divide among courts regarding the extent to which the government’s declination decision bears on the materiality analysis set forth in Escobar and also underscore the challenges defendants can face in defeating materiality at the motion to dismiss stage.
A recently leaked internal DOJ memo reveals a dramatic shift in DOJ’s approach to dismissal of non-intervened qui tam suits. Citing the “significant resources” that the government expends even in non-intervened cases, the memo—drafted by Commercial Litigation Branch Director Michael Granston—sets forth a series of factors for lawyers with DOJ and U.S. Attorneys’ offices to consider when evaluating whether to seek dismissal of a qui tam case. (more…)
As discussed here and here, courts continue to grapple with how to resolve qui tam cases where the government continued purchasing from the defendant even after being made aware of the relator’s allegations of fraud. One judge recently vacated an “unwarranted, unjustified, unconscionable, and probably unconstitutional” $350 million jury verdict for the relator, finding the government’s continued payment of the defendants’ claims dispositive on the issue of materiality. United States ex rel. Ruckh v. Salus Rehabilitation LLC, No. 11-cv-1303 (M.D. Fla. Jan. 11, 2018). The case reinforces the important role that government purchasing histories play post-Escobar.
The Supreme Court emphasized in Escobar that questions of materiality are not “too fact intensive for courts” to decide through a motion to dismiss. Nonetheless, what facts a plaintiff must allege adequately to plead materiality consistent with Escobar’s “demanding” standard remains a hotly contested question. In a recent decision, the Second Circuit held that the relator’s failure to allege that CMS, the agency allegedly defrauded, changed its reimbursement practices after becoming aware of information supposedly withheld by the defendant, doomed the complaint on materiality grounds. See United States ex rel. Coyne v. Amgen, Inc., No. 17-1522 (2d Cir. Dec. 18, 2017). The decision underscores the significance of the materiality requirement at the motion to dismiss stage. (more…)
Clinical laboratories stand in a position of tension: although laboratory tests must be medically necessary to be reimbursable by federal healthcare programs, laboratories often do not directly engage with patients in a way that would permit them to assess medical necessity. A district court recently corrected its ruling regarding the extent to which laboratories can be held liable under the FCA when the tests for which they submit claims are not medically necessary. United States ex rel. Groat v. Boston Heart Diagnostics Corp., No. 15-cv-487 (D.D.C. Dec. 11, 2017). (more…)