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.

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Judge Saris Green Lights FCA Claims Against PE Fund Based on Regulatory Non-Compliance of its Portfolio Company Healthcare Provider for Trial

Late last week, Judge Patti Saris (D. Mass.) issued an opinion on cross-motions for summary judgment filed by a qui tam relator and Massachusetts and a group of defendants that includes South Bay Mental Health Center (“South Bay”) and its private equity fund owner, permitting the vast majority of plaintiffs’ claims to proceed to the jury.  The opinion addresses important questions of law as to each of the elements of the FCA related to claims to Medicaid for services allegedly provided in violation of various state regulatory requirements.  However, the opinion is most notable for being the first to hold at the dispositive motion stage that a private equity fund and its principals can act with the requisite scienter and cause the submission of false claims, and thus be exposed directly to the treble damages and statutory penalties of the FCA as a result of conduct by a healthcare provider portfolio company.  As such, we may expect it to add momentum to DOJ’s stated intent to pursue FCA claims against PE investors in the industry.

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DOJ Continues Focus on COVID-19 Fraud with Formation of Task Force and Warning to Vaccine Providers

This week DOJ announced the formation of a COVID-19 Fraud Enforcement Task Force “to marshal the resources of the Department of Justice in partnership with agencies across government to enhance enforcement efforts against COVID-19 related fraud.”  In addition to components of DOJ, key agencies overseeing pandemic relief programs will participate, as well as the Special Inspector General for Pandemic Relief and the Pandemic Response Accountability Committee.

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How Life Sciences Firms Can Reduce DOJ Enforcement Risks

Sidley lawyers Jaime L.M. Jones, Brenna E. Jenny, and Jack Pirozzolo recently published an article in Bloomberg Law entitled How Life Sciences Firms Can Reduce DOJ Enforcement Risks.  Scrutiny of life sciences companies, from their relationships with physicians to their promotional practices, has become one of the few constants in the evolving government enforcement landscape.  But life sciences companies can mitigate this risk by making targeted updates to their compliance programs to address areas of particular interest to the Department of Justice.

A copy of the article is available here.