By

Jaime L.M. Jones

20 November 2018

Court Compels Medicare Advantage Plan to Comply With CID for Testimony in Diagnosis Coding Investigation

On November 13, 2018, a magistrate judge issued a report to the United States District Court for the Southern District of New York recommending that the Department of Justice’s (“DOJ”) petition to compel deposition testimony from Anthem regarding its procedures and processes for verifying diagnoses for Medicare Advantage payments be granted and that a date be set for Anthem’s witness to testify.  DOJ is seeking the testimony in connection with its investigation of Anthem as part of its broader enforcement efforts under the FCA focused on the Medicare Advantage program.  (more…)

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05 November 2018

How Long Under Seal is Too Long?

On October 16, a Philadelphia federal district court rejected the government’s eleventh request for an extension of the seal so that it could continue to investigate five-year-old allegations brought under the False Claims Act qui tam provisions.  See United States ex rel. Brasher v. Pentec Health, Inc., No. 13-05745, 2018 U.S. Dist. LEXIS 177118 (E.D. Pa. Oct. 16, 2018).  The suit, first filed by relator in 2013, alleges that Pentec Health defrauded Medicare when it submitted fraudulent bills to the government health insurance program.  In denying the request, U.S. Judge Eduardo C. Robreno of the Eastern District of Pennsylvania determined the government had failed to show good cause for an eleventh extension of the seal period and ordered it to decide within 30 days if it will intervene in the suit. (more…)

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29 October 2018

Private Equity Funds Face Increasing Risk of False Claims Act Liability

Evidence is mounting that DOJ is willing to pursue private equity funds in False Claims Act cases, particularly ones based on alleged violations of healthcare fraud and abuse laws.  Earlier this year, for the first time the Department intervened in one such False Claims Act case against a private equity sponsor, the fund’s portfolio pharmacy, and two pharmacy employees.  U.S. ex rel. Medrano v. Diabetic Care Rx, LLC, Case No. 15-62617-CIV-BLOOM, S.D.Fl.

(more…)

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07 September 2018

District Court Vacates 2014 Medicare Advantage Overpayment Rule and Curtails Potential Avenues for DOJ to Pursue False Claims Act Damages

On September 7, 2018, the United States District Court for the District of Columbia vacated CMS’s 2014 Final Overpayment Rule,[1] applicable to the Medicare Advantage program, granting summary judgment to UnitedHealthcare that the Final Rule violated the Medicare statute, was inconsistent with the Affordable Care Act (ACA) and the False Claims Act (FCA), and violated the Administrative Procedures Act (APA).  In broad strokes, the District Court confronted two statutory issues.  The first centered on the undisputed fact that the Final Rule did not account for known errors in the data (from traditional Medicare) used to calculate payments to Medicare Advantage plans.  The court found that this failure violates the statutory mandate of “actuarial equivalence” because, although “payments for care under traditional Medicare and Medicare Advantage are both set annually based on costs from unaudited traditional Medicare records,” the Final Rule “systematically devalues payments to Medicare Advantage insurers by measuring ‘overpayments’ based on audited patient records.”  As a result, the court concluded that the Final Rule “establishes a system where ‘actuarial equivalence’ cannot be achieved.”  On the same basis, the court found that the Final Rule violates the statutory requirement to use the “same methodology” in calculating expenditures in traditional Medicare and determining payments to Medicare Advantage plans.  The Final Rule “fails to recognize a crucial data mismatch and, without correction, it fails to satisfy [the Medicare statute].”  (more…)

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06 July 2018

Granston Memo Calls for DOJ to Dismiss More Declined Qui Tams; Courts Diverge on The Extent of DOJ’s Right to Do So

In the recently released Granston Memo, DOJ outlined its policy in favor of dismissing non-intervened qui tam suits when dismissal will advance other important government interests. [Reported on here].  While the FCA bar has been debating how much – if at all – the world of FCA enforcement will change in light of the Granston Memo, DOJ has been litigating over its right to act on the policy and dismiss declined qui tam suits.  In that regard, the statute appears straightforward:  “The Government may dismiss the action notwithstanding the objections of the person initiating the action if the person 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.”  31 USC § 3730(c)(2)(a).  However, in the last week DOJ lost and won this issue in sharply contrasting decisions regarding the government’s right not to pursue claims.  (more…)

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09 March 2018

DOJ Confirms Involvement in Opioid Litigation, Sheds Light on Potential Claims

In a series of speeches over the last week, DOJ has expanded on its commitment to organize enforcement efforts focused on manufacturers and distributors of opioids.  On February 27, AG Sessions announced the DOJ Prescription Interdiction & Litigation (“PIL”) Task Force, positioning it as a means aggressively to deploy “all available criminal and civil law enforcement tools . . . with a particular focus on opioid manufacturers and distributors.”  See https://www.justice.gov/opa/pr/attorney-general-sessions-announces-new-prescription-interdiction-litigation-task-force.  In that regard, Sessions suggested DOJ will leverage its decades of experience pursuing “off label” cases under the Food, Drug & Cosmetic Act (“FDCA”).  Specifically, “the PIL Task Force will build on and strengthen existing Department of Justice initiatives to ensure that opioid manufacturers are marketing their products truthfully and in accordance with Food and Drug Administration rules.”  (more…)

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07 December 2017

FCA Attention Turns To Electronic Health Records

CMS has recently committed significant resources to advance the use of electronic health records (“EHR”) systems.  One of the biggest initiatives is the “meaningful use” program, through which CMS offers incentive payments to healthcare providers who demonstrate and attest to using EHR systems that have certain qualities and satisfy specific objectives.  (more…)

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29 August 2017

District Court Rules that Claims Without Specific Misrepresentations Fail to Meet Escobar’s Test But Can Proceed Based on Fraudulent Inducement

In Escobar, the Supreme Court upheld implied certification claims “at least where two conditions are satisfied,” namely specific misrepresentations and noncompliance with a material requirement.  Some courts have interpreted this phrase as defining two necessary conditions to establish implied certification liability under the FCA.  Other courts view the phrase as introducing one potential path to liability, where the first condition, specific misrepresentations, is not required.  Citing what has emerged as a “majority view” among district courts in the Second Circuit that the two conditions are mandatory, the Southern District of New York recently deepened the divide.  See United States ex rel. Forcier v. Computer Scis. Corp., No. 12-cv-1750 (S.D.N.Y. Aug. 10, 2017).  (more…)

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