By

Kristen A. Knapp

19 March 2019

Third Circuit Finds Individual Ownership Interest in Corporation Not Required for FCA Liability and Unsworn Testimony Insufficient to Create a Material Issue of Fact

On March 14, 2018, the Third Circuit affirmed in part and vacated in part a district court ruling granting the United States’ motion for summary judgment.  The case raised three issues:  (1) whether an individual without any ownership interests in a company can face FCA liability for the company’s failure to perform a required act to qualify for Medicare reimbursement; (2) whether an unsworn statement is sufficient to create a material issue of fact when weighed against facts admitted during a plea colloquy; and (3) whether a defendant corporation is collaterally estopped from contesting FCA liability or damages based on an individual’s plea colloquy.

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20 July 2018

Tenth Circuit Holds That Claims For Medical Care That Fail To Meet Industry Standards May Be Deemed Objective False

Earlier this month, in U.S. ex rel. Polukoff v. St. Mark’s Hospital et al., No. 17-4014 (Jul. 9, 2018), the Tenth Circuit reversed a lower court’s dismissal of FCA claims, holding that “[i]t is possible for a medical judgment to be ‘false or fraudulent’” under the FCA.  As previously reported here, the relator had alleged that a cardiologist performed and billed Medicare and Medicaid for unnecessary heart surgeries known as PFO closures.  The District of Utah, in granting defendants’ motion to dismiss, had concluded that claims associated with those procedures, in which the doctor represented that the procedures were medically necessary, could not be deemed objectively false because “liability may not be premised on subjective interpretations of imprecise statutory language such as ‘medically reasonable and necessary.’”

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22 June 2018

Acting Associate Attorney General Discusses Trump Administration FCA Enforcement Policy

On June 14, 2018, at the ABA’s National Institute on the Civil False Claims Act and Qui Tam Enforcement, Acting Associate General, Jesse Panuccio, delivered wide-ranging remarks on the False Claims Act. Of particular interest, AAG Panuccio discussed several recent high profile enforcement priorities of the Trump Administration. (more…)

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04 May 2018

DOJ Backs Down From Challenge to CIDs Issued After It Declined to Intervene in FCA Case

Faced with a challenge to its authority to do so, DOJ recently withdrew several Civil Investigative Demands (“CIDs”) which it had issued after declining to intervene in a qui tam case brought by former employees who had accused their employer, Lexington Foot & Ankle Center PSC, of fraudulent billing.  In re Civil Investigative Demands 18-13-EDKY, 18-02-EDKY, and 18-03-EDKY, No. 5:18-cv-00283 (E.D. Ky.) (filed Apr. 23, 2018).  (more…)

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16 October 2017

Tenth Circuit Bars Attorney’s Attempt To Step In As A Relator To Save Complaint Barred By First-to-File

Last month, in United States ex rel. Little et al. v. Triumph Gear Systems, Inc., the Tenth Circuit answered in important question about the interplay between Federal Rule of Civil Procedure 15 regarding leave to amend parties, and the FCA’s first-to-file bar.  The specific question before the court was whether the FCA’s first-to-file rule precludes a non-party from intervening in a pending qui tam action by seeking leave to amend under Rule 15.  The Tenth Circuit held that it does.  (more…)

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14 June 2017

New Jersey Supreme Court Curtails Attorney General’s Subpoena Power in FCA Action

On June 7, 2017, the New Jersey Supreme Court, in a 3-2 decision affirming the decision of the Appellate Division, found that the Attorney General’s administrative subpoena power under New Jersey’s False Claims Act is limited to the 60 day period (which may be extended by motion) in which the Attorney General must make his or her intervention decision. “[A]fter the Attorney General declines to intervene in a qui tam action and leaves that action in the relator’s control, the Attorney General loses the authority to issue administrative subpoenas.” In the Matter of the Enforcement of New Jersey False Claims Act Subpoenas, A-5-16 (No. 077506). (more…)

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24 January 2017

Court Holds That Disputes Over Medical Necessity Fail To Satisfy FCA’s Falsity Standard

In a January 19, 2017 decision, a federal judge in Utah considered whether claims submitted by a physician could be deemed “objectively false” based on alleged non-compliance with industry standards.  The court concluded that allegations that a doctor failed to comply with an industry standard for medical care do not satisfy the objective falsity standard and do not render false the physician’s certification that he or she believed that the services “were medically indicated and necessary for the health of the patient.”  United States ex rel. Polukoff v. St. Mark’s Hospital et al., No. 2:16-cv-00304-JNP-EJF (D. Utah Jan. 19, 2017).

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28 June 2016

First Circuit Upholds Dismissal of FCA Claims with Prejudice Taking Middle-Ground Approach to Particularity Requirement

The First Circuit, in United States ex rel. Garcia v. Novartis AG, upheld the dismissal of a FCA claim with prejudice against Novartis Pharmaceutical Corporation, Novartis Corporation, Genentech, Inc. and Roche Holdings, Inc. (collectively “Defendants”) on the basis that the complaint did not include sufficient specific allegations regarding the who, what, where, and when of the fraud to satisfy Federal Rule of Civil Procedure 9(b).  In so doing, the First Circuit appears to have taken a fact-specific middle-ground approach to the Rule 9(b) particularity standard, rather than wholly following either side of the Circuit split on the particularity standard.

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01 April 2016

Universal Health Services Urges Court to Reject Implied Certification Theory of Liability

On March 28, 2016, Petitioners in Universal Health Services v. United States ex rel. Escobar filed their reply brief reinforcing their argument that the implied certification theory of liability is not a valid basis of liability under the False Claims Act (“FCA”).  Alternatively, Petitioners argue that if the Court accepts the implied certification theory of liability, the theory must be limited to noncompliance with an express condition of payment.

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29 February 2016

Whistleblowers Urge Supreme Court Not to Restrict Government’s Ability to Prosecute Fraud

On February 25, 2016, Respondents in Universal Health Services v. United States ex rel. Escobar, cautioned the Supreme Court against limiting the Government’s ability to prosecute fraud and argued that the Supreme Court should find the implied certification theory of liability a viable theory under which to bring claims against contractors.

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