Category

Enforcement

15 December 2021

DOJ Announces Increased Inflation-Adjusted False Claims Act Penalties

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…)

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05 November 2021

DOJ Walks Back Recent Flexibilities for Corporate Resolutions

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.

(more…)

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04 November 2021

DOJ Deploys the FCA on Cybersecurity Fraud

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.

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02 September 2021

Split Seventh Circuit Panel Spars Over Escobar Interpretation

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…)

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27 August 2021

HHS Hires Four Outside Firms to Audit Provider Relief Fund Recipients

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…)

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11 August 2021

FDA’s OPDP Studying Promotional Booths at Medical Conferences

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.

(more…)

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12 July 2021

Drug Diagnosis Code Data Sought by HHS OIG May Cue Enforcement

Leadership from HHS-OIG recently advocated for new mandates that physicians include a diagnosis code with each prescription and that claims data capture this information. This followed on the heels of a Congressional Research Service report suggesting that Congress should pass legislation requiring healthcare providers to include diagnostic information in prescriptions.  As Sidley lawyers Jaime L.M. Jones, Brenna E. Jenny, and Matt Bergs discuss in an article published in Bloomberg Law entitled Drug Diagnosis Code Data Sought by HHS OIG May Cue Enforcement, HHS-OIG may see diagnosis code data as a tool to engage in nuanced investigations into pharmaceutical companies for off-label promotion of prescription drugs, leveraging law enforcement’s increasingly sophisticated capacity to use data analytics to identify targets for investigation.

A copy of the article is available here.

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09 June 2021

DOJ Opposes Supreme Court Review of Granston Dismissal Standard

On May 21, 2021, the Department of Justice filed a brief in opposition to a petition for writ of certiorari filed by the relator in U.S. ex rel. Cimznhca, LLC v. UCB, Inc.  The petition challenges the Seventh Circuit’s decision reversing the district court’s denial of the government’s motion to dismiss over the relator’s objection.  In reversing, the Seventh Circuit determined that, so long as relators have an opportunity to be heard under 31 U.S.C. § 3730(c)(2)(A), the government may dismiss qui tams when it satisfies the standard contained in Federal Rule of Civil Procedure 41(a)(1)(A)(i).  That rule provides that a plaintiff may dismiss an action by serving notice of dismissal any time before the opposing party serves either an answer or a motion for summary judgment.

(more…)

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27 May 2021

DOJ Announces “First in the Nation” Fraud Charges for Abuse of Pandemic Telehealth Flexibilities

Yesterday DOJ announced another round of coordinated law enforcement actions to combat healthcare fraud related to COVID-19.  One of these indictments features “first in the nation charges for allegedly exploiting the[] expanded” opportunities to receive Medicare reimbursement for telehealth services during the COVID-19 public health emergency.

(more…)

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25 May 2021

Sunshine Act Enforcement No Longer Just on the Horizon

DOJ recently announced its second FCA settlement within the past half year that resolves alleged Anti-Kickback Statute (“AKS”) violations and corollary failures to satisfy Sunshine Act reporting obligations.  Before this pair of settlements, neither DOJ nor CMS has publicly announced any targeted efforts to enforce the Sunshine Act, and these settlements seem to be on the cutting edge of an emerging government enforcement priority.

(more…)

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