Potential Liability of Investors in the Healthcare Industry Heightens as Hospital Investors Enter into Novel Settlement

A recent False Claims Act settlement between the Department of Justice, a New Jersey hospital, and the hospital’s investors also included a novel Federal Debt Collection Practices Act (“FDCPA”) settlement with the investors, highlighting the government’s continued efforts to pursue investors in the healthcare industry.

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Qui Tam Alleges Hospital Fraud Relating to Provider Relief Fund “High Impact” Payment

Earlier this month, a federal court unsealed a qui tam complaint against several New Jersey hospitals, management services organizations, and the hospitals’ Chief Executive Officer and Chief Financial Officer for allegedly refusing to return CARES Act Provider Relief Fund (“PRF”) money for which the hospitals knew they were not eligible, and for allegedly using PRF money for impermissible purposes.  See United States ex rel. Singh v. Hudson Hospital OPCO, LLC, No 21-cv-19788 (D.N.J. Nov. 5, 2021).  This case is noteworthy because it is one of the first unsealed qui tam complaints raising allegations about ineligibility for, and misuse of, PRF payments.

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D.C. Circuit Reinstates Parts C/D Overpayment Rule

The D.C. Circuit Court of Appeals recently overruled an earlier district court vacatur of the CMS Parts C/D Overpayment Rule, resulting in reinstatement of the rule.  The decision adopted the government’s arguments in full and is likely a harbinger of renewed confidence by DOJ in pressing forward with FCA cases premised on Medicare Advantage “upcoding.”

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