Category

Enforcement

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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17 December 2018

DOJ Official Outlines Enforcement Priorities Under the Food, Drug, and Cosmetic Act

James Burnham, the Deputy Assistant Attorney General for the Consumer Protection Branch (“CPB”), addressed the annual Food and Drug Law Institute Conference (“FDLI”) on December 13, 2018 about DOJ’s enforcement priorities and tools in the FDA-regulated space.  As head of the branch within DOJ that has responsibility for bringing civil and criminal actions for violations of the Federal Food, Drug, and Cosmetic Act (“FDCA”), and that works with DOJ Civil Frauds to bring actions based on those violations under the False Claims Act (“FCA”), Burnham outlined the principles that motivate enforcement action, the CPB’s current enforcement priorities, and some of the “new” enforcement tools CPB has at its disposal with respect to opioids. (more…)

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04 December 2018

Court Recommends Dismissal of FCA Claims Against Pharmacy and Private Equity Fund, But Provides Insight Into When Funds May Be Held Responsible For Conduct of Portfolio Companies

As we previously reported, the government has intervened in a qui tam suit against a compounding pharmacy and its private equity fund owner alleging the pharmacy filed claims with Tricare that were rendered false by kickbacks allegedly paid to marketing companies in exchange for patient referrals and directly to patients in the form of co-pay waivers.  The government alleged the pharmacy executed a provider agreement with Tricare’s contracted pharmacy benefits manager in which it agreed to be bound by fraud waste and abuse laws and the provider manual, which also required compliance with the Anti-Kickback Statute and other laws.  Defendants moved to dismiss and on November 30, the Magistrate Judge filed an opinion recommending the FCA claims be dismissed.  U.S. ex rel. Medrano v. Diabetic Care Rx, LLC, Case No. 15-62617-CIV-BLOOM, S.D.Fl.

(more…)

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30 November 2018

DOJ Announces Important Changes to Yates Memo

In a speech delivered yesterday, Deputy AG Rod Rosenstein announced important limitations to the policies regarding individual accountability for corporate wrongdoing set forth in the 2015 Yates Memo.  Under the policy announced in that Memo, summarized here, DOJ limited the ability of its lawyers to offer any cooperation credit in civil or criminal matters to those corporations that provided “all relevant facts” regarding all of the individuals involved in the alleged corporate misconduct.  Companies and counsel that have been engaged in DOJ investigations have experienced the challenges in complying with this standard and it was far from clear that DOJ itself did or even could adhere to the standard.  In his speech, Rosenstein acknowledged the challenges and that “the policy was not strictly enforced in some cases because it would have impeded resolutions and wasted resources.”  In light of those realities and a recognition that the Department’s “policies need to work in the real world of limited investigative resources,” Rosenstein announced a revised policy that “return[s] discretion to Department attorneys.”  (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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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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