A court in the District of Maryland recently dismissed a declined qui tam action in which the relator, a bariatric surgeon, alleged that two medical device companies violated the AKS by providing surgeons with free advertising in exchange for physicians using the companies’ LAP-BAND medical devices in bariatric surgeries. See United States ex rel. Fitzer v. Allergan, Inc., et al., 1:17-cv-00668-SAG (D. Md. Sept. 10, 2021). The court’s decision granting defendants’ motions to dismiss is notable in its refusal to allow relator to proceed based on conclusory allegations that the defendants knew they were acting in violation of the AKS. (more…)
The United States Court of Appeals for the Seventh Circuit recently allowed a previously dismissed qui tam case to proceed against Molina Healthcare of Illinois (“Molina”). The suit, brought by a relator who founded Molina subcontractor GenMed, alleges that Molina fraudulently billed Illinois’ Medicaid program for skilled nursing facility (“SNF”) services that were not actually provided. The district court previously dismissed the case at the pleading stage in June 2020, finding that the relator’s complaint insufficiently alleged that Molina knew its alleged false claims were material. The Seventh Circuit, in a split decision, reversed and remanded the case for further proceedings. (more…)
Federal records recently made available by ProPublica reveal that from late February through early April 2021, Health Resources and Services Administration (“HRSA”), the component of HHS that administers the CARES Act Provider Relief Fund, engaged multiple outside contractors for work relating to auditing and oversight of the Provider Relief Fund, with task descriptions such as “PRF audit support services,” “Audit and financial review services of HRSA Provider Relief Fund programs,” and “Program integrity support for HRSA Provider Relief Fund programs.” Amounts obligated so far for this work total more than $5.3 million. (more…)
On August 12, 2021, the United States District Court for the District of Minnesota granted Boston Scientific Corporation’s (BSC) motion for summary judgment in relator Stephen Higgins’s declined qui tam, which alleged that BSC had fraudulently induced the Food and Drug Administration (FDA) to approve two types of defibrillators that the FDA later recalled. (more…)
The D.C. Circuit Court of Appeals recently overruled an earlier district court vacatur of the CMS Parts C/D Overpayment Rule, resulting in reinstatement of the rule. The decision adopted the government’s arguments in full and is likely a harbinger of renewed confidence by DOJ in pressing forward with FCA cases premised on Medicare Advantage “upcoding.”
In a 2-1 decision, the Seventh Circuit joined the Third, Eighth, Ninth, and D.C. Circuits in holding that the standard for “reckless disregard” under the Fair Credit Reporting Act (“FCRA”) established by the Supreme Court in Safeco Insurance Company of America v. Burr, 551 U.S. 47 (2007) applies equally to the False Claims Act (“FCA”). Applying Safeco, the Seventh Circuit also held that it was objectively reasonable for Defendants, a group of retail pharmacies, to charge the Medicare Part D and Medicaid programs their retail cash prices as their “usual and customary” prices for drugs rather than prices offered through competitor price-match discount programs.
FDA recently announced that the Office of Prescription Drug Promotion (“OPDP”) initiated a new study on pharmaceutical companies’ interactions with healthcare providers at promotional booths in medical conference exhibit halls. The study is intended to yield insights to inform OPDP policy making and review of proposed promotional materials submitted by companies seeking advisory comments. It may also generate insights that may be used by DOJ to pursue companies for potential instances of off-label promotion or making statements about safety or efficacy that could be characterized as false or misleading.
The recently proposed amendments to the False Claims Act have stalled out for now. As discussed here and here, these bipartisan proposed amendments—led by Senator Grassley—would have made four changes to the FCA, and most notably, would have radically altered the burden of proof for establishing materiality.
But after making a sudden appearance on Friday in the Senate infrastructure bill, last night those amendments were excluded. This means that the amendments’ proponents will need to consider other vehicles, particularly “must pass” bills such as the budget resolution. The Senate is expected to consider amendments to the budget resolution later this week.
We will continue to monitor developments regarding this proposed legislation.
As discussed further here, a bipartisan group of senators, led by Senators Grassley (R-IA), Leahy (D-VT), Wicker (R-MI), Durbin (D-IL), and Kennedy (R-LA), recently introduced proposed amendments to the False Claims Act. Those amendments have now been incorporated into the infrastructure bill currently being debated in the Senate. (more…)
A bipartisan group of senators, led by Senators Grassley (R-IA), Leahy (D-VT), Wicker (R-MI), Durbin (D-IL), and Kennedy (R-LA), has introduced the False Claims Amendments Act of 2021. This legislation is worth watching not just because it would significantly amend the FCA, but because Senator Grassley has a successful track record of shepherding through to passage legislation reversing gains made by defendants in FCA cases.