By

Scott Stein

25 January 2019

DOJ Nominee Barr Walks Back FCA Stand, But Not Entirely

Scott Stein (Chicago), Doreen Rachal (Boston), and Naomi Igra (San Francisco) authored an article for Bloomberg Law about Attorney General nominee William Barr’s testimony on the qui tam provisions of the False Claims Act.  As discussed in the article, Barr questioned the constitutionality of the qui tam provisions earlier in his career but took a softer stance at his confirmation hearing.  The article, a copy of which can be accessed here, explains how Barr acknowledged a Supreme Court decision upholding the qui tam provisions but left open the possibility that a Barr-led DOJ would continue moving to dismiss whistleblower actions that do not advance the federal government’s interests.

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18 January 2019

DOJ Announces Over $2.5 Billion in FY 2018 FCA Recoveries From Healthcare Industry

DOJ recently announced that it recovered over $2.8 billion from FCA cases in FY 2018.  Although this number continues a multi-year downtrend in overall FCA recoveries, healthcare fraud remains a major DOJ focus, with $2.5 billion of the recoveries – 87.25%, the highest proportion in at least the past decade – coming from healthcare cases: (more…)

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14 January 2019

Trump Pick for AG to Be Scrutinized for Views on False Claims Act Enforcement

Scott Stein (Chicago), Doreen Rachal (Boston), and Naomi Igra (San Francisco) have authored an article for Bloomberg Law regarding Attorney General nominee William Barr’s views on the qui tam provisions of the False Claims Act.  As discussed in the article, Barr has previously called the qui tam provisions “patently unconstitutional.”  The article, a copy of which can be accessed here, discusses the basis for Barr’s views and how his confirmation may amplify DOJ’s recent efforts to move for dismissal of qui tam cases that do not serve the federal government’s interests.

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18 December 2018

Flexing Its Granston Muscle, DOJ Seeks Dismissal of Patient Support Services FCA Litigation

For the second time in three weeks, the Department of Justice has stepped in to seek the dismissal of high-profile FCA litigation being pursued by relators after the government initially declined to intervene.  DOJ’s recent action pertains to approximately a dozen lawsuits filed primarily in 2016 and 2017, which were unsealed over the last year as DOJ declined to intervene.  Each of the cases was filed by an LLC relator formed for the purpose of pursuing the litigation and alleging that pharmaceutical manufacturers, and third-party service providers who contracted with them, violated the Anti-Kickback Statute (and thus the FCA) by providing various support services for the manufacturers’ drugs.  The cases focused on three types of activity.  First, defendants deployed nurse educators who allegedly promoted the manufacturers’ drugs to physicians and patients through a “white coat marketing” scheme.  Second, the nurse educators allegedly instructed patients on proper use of medication.  Third, the defendants allegedly communicated with insurance companies to determine whether the plans would reimburse the manufacturers’ drugs for specific patients and what process was required to ensure such reimbursement.  The relators allege that the second and third categories of conduct violated the AKS because they provided physician practices with expense relief.  (more…)

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20 November 2018

Supreme Court Agrees to Resolve Circuit Split on FCA Statute of Limitations in Non-Intervened Cases

On November 16, the Supreme Court agreed to resolve a percolating circuit split on an issue of critical importance under the FCA: are relators in non-intervened cases entitled to invoke the FCA’s alternate 10 year statute of limitations?  The grant of certiorari in Cochise Consultancy, Inc. v. United States ex rel. Hunt, 887 F.3d 1081 (11th Cir. 2018) makes it the third Supreme Court case in recent years addressing the False Claims Act’s limitations periods.  (more…)

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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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07 September 2018

What Might A Justice Kavanaugh Portend for False Claims Act Jurisprudence?

With Judge Brett Kavanaugh seemingly headed toward confirmation to replace Justice Anthony Kennedy on the Supreme Court, readers of this blog may be interested in his prior cases addressing the False Claims Act.  A judge on the United States Court of Appeals for the D.C. Circuit for over a decade, Judge Kavanaugh has been described as a conservative textualist and a “stalwart originalist,”[1] more in line with the late Justice Antonin Scalia than swing vote Justice Kennedy, for whom Kavanaugh clerked alongside recently appointed Justice Neil Gorsuch in 1993-1994, and whom he would replace if confirmed.   (more…)

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20 August 2018

AKS Safe Harbor Defeats FCA Claim in Eleventh Circuit

In Carrel v. AIDS Healthcare Foundation, No. 17-13185 (August 7, 2018) the Eleventh Circuit affirmed summary judgment for the defendant on Anti-Kickback Statute-based FCA claims, holding that incentives to employees for referring patients for its services were covered by the employee safe harbor to the Anti-Kickback Statute, and that these payments in particular served the congressional intent of the Ryan White Act to provide AIDS patients with ease of access to services. The Court also upheld the prior dismissal of all other allegations for a lack of particularity, noting that the only instances that relators alleged with particularity were actually covered “services” under the Ryan White Act and that they would not “infer fraud from instances of lawful conduct.” (more…)

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13 August 2018

Massachusetts Prohibits Entities From Being Relators

We are increasingly seeing the use of entities as relators, in lieu of individuals.  In some instances these relator entities are actual businesses, though frequently they are special purpose entities formed for the sole purpose of pursuing qui tam litigation.  There are a number of reasons for this trend, including that the use of an entity may be used to keep secret the names of individual relator-plaintiffs secret even after unsealing, and the belief that by using a corporate entity, individual whistleblowers can be added or replaced in the event of jurisdictional problems. (more…)

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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.’”

(more…)

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