With its latest announcement this week of a criminal crackdown of 21 defendants for their alleged participation in various health care related fraud schemes, DOJ has underscored its commitment to aggressively pursue individuals and companies alleged to have exploited the COVID-19 pandemic. Among these actions are a collection involving alleged billing fraud arising from COVID testing; one set of defendants is alleged to have taken the data from patients seeking COVID tests and submitting bills to the federal healthcare programs for office visits that never occurred, while another set of actions involve obtaining patient samples and then billing for more expensive lab tests. Still others involve defendants alleged to have sold fake COVID vaccination cards. (more…)
This week DOJ announced one of the first civil settlements under the FCA involving abuse of the pandemic flexibilities that the Department of Health and Human Services used to authorize broader use of telehealth during the COVID public health emergency. Physician Partners of America (“PPOA”) agreed to pay $24.5 million to resolve allegations that it violated the FCA by billing for medically unnecessary telehealth visits, and by submitting claims for medically unnecessary genetic, psychological, and urine drug tests and claims tainted by violations of the Stark Law. While DOJ has previously engaged in criminal enforcement actions relating to abuse of the telehealth waiver flexibilities, as discussed further here, this case represents an expansion of telehealth enforcement scrutiny to the civil side. (more…)
Yesterday DOJ announced its first settlement under the Department’s new “Cyber-Fraud Initiative.” This initiative, announced in October 2021, aims to “utilize the False Claims Act to pursue cybersecurity related fraud by government contractors and grant recipients.” However, as discussed further here, in addition to targeting traditional government contractors, the initiative presents broader opportunities for DOJ to use the FCA to address data protection practices by healthcare providers.
The healthcare industry is consistently the recipient of disproportionate oversight under the FCA, and thus it is perhaps no surprise that DOJ’s first settlement under the Cyber-Fraud Initiative was with a healthcare provider. As announced here, a healthcare provider furnishing medical services on air force bases paid $930,000 to resolve allegations that it “violated the False Claims Act by falsely representing to the State Department and the Air Force that it complied with contract requirements relating to the provision of medical services.” The settlement also resolved allegations relating to controlled substances. (more…)
On February 1, 2022, Acting Assistant Attorney General for the DOJ Civil Division, Brian M. Boynton, announced that the Civil Division recovered over $5.6 billion in settlements and judgments under the False Claims Act (“FCA”) for fiscal year 2021. This is the second largest annual total in FCA history and a significant increase from the $2.2 billion recovered during fiscal year 2020. Detailed statistics on FCA recoveries from 1986 through FY 2021 are available here. (more…)
Last week one of the first qui tam suits alleging manipulation of the billing rules for a type of remote patient monitoring was unsealed, following the relator’s voluntary dismissal. See United States ex rel. Mathurin v. Vector Remote Care LLC (Nov. 18, 2020 E.D.N.Y.). Relators not infrequently voluntarily dismiss their case when DOJ informs them that it lacks merit. Whatever the merits of this one, given the explosive increase in remote patient monitoring during the pandemic and the predicted future increases in these patient care modalities, we expect continued whistleblower activity focused on this space. Of course, such allegations will be met with substantial challenges to establishing that these kinds of issues in fact fail to comply with the applicable coverage and reimbursement criteria or render any claims materially false.
Yesterday HHS-OIG updated its Work Plan to add yet one more audit of potential misconduct relating to the COVID-19 pandemic. This project, titled Hospital’s Compliance With the Provider Relief Fund Balance Billing Requirement for Out-of-Network Patients, focuses on compliance with a clause in the Provider Relief Fund Terms and Conditions that restricts balance billing for COVID-19 patients. That clause states: [F]or all care for a presumptive or actual case of COVID-19, Recipient certifies that it will not seek to collect from the patient out-of-pocket expenses in an amount greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network Recipient.” (more…)
The 2015 Balanced Budget Act (BBA) requires that federal agencies make inflationary adjustments to civil monetary penalties on a yearly basis to account for inflation using calculations based on the Bureau of Labor Statistics’ Consumer Price Index. In recent years, these increases have occurred less frequently. But on December 13, 2021 the Department of Justice published a final rule that increases the civil penalties in False Claims Act actions for violations that that occurred after November 2, 2015, the date the BBA was enacted. (more…)
In a recent speech, Deputy Attorney General Lisa Monaco announced three important updates to how DOJ attorneys are to approach corporate resolutions (as discussed further here). These changes depart from flexibilities offered by DOJ during the last administration. While the remarks were made against the backdrop of the Deputy Attorney General’s criminal portfolio, these Department-wide policies apply with equal force to the Civil Division’s False Claims Act work. It will be particularly important for companies in the middle of ongoing FCA investigations to reassess their strategies in light of these new policies.
Sidley lawyers Brenna Jenny and Sujit Raman recently published an article in Law360 entitled How To Minimize FCA Cyber Fraud Enforcement Risk, which analyzes the implications of DOJ’s recent formation of a Civil Cyber-Fraud Initiative to use the FCA to pursue cybersecurity-related fraud. Although the Initiative focuses generally on government contractors and grant recipients—and does not, by its terms, impose any new cybersecurity requirements—the project promises in particular to attract whistleblowers in the defense industry, as recent years have witnessed high-profile FCA cases implicating alleged cybersecurity non-compliance in that sector. The healthcare industry may also see a marked increase in cybersecurity-related qui tams, especially in light of a recent Department of Health and Human Services Office of Inspector General report taking the Centers for Medicare & Medicaid Services to task for failing to hold hospitals accountable for the cybersecurity of their networked devices. Healthcare providers and medical device manufacturers, in addition to other government contractors and grantees, would do well to heed DOJ’s warning that “cybersecurity failures…are prime candidates for potential False Claims Act enforcement.”
A copy of the article is available here.