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On May 28, 2020, the United States Court of Appeals for the Fifth Circuit affirmed the dismissal with prejudice of a False Claims Act suit brought against Baylor Scott & White Health (“Baylor”), a network of acute care hospitals. The suit, brought by Integra Med Analytics, alleged that Baylor submitted $61.8 million in fraudulent claims to Medicare by using unsupported “higher-value” diagnosis codes to inflate Medicare reimbursements. The U.S. government previously declined to intervene in the suit.

5th Circuit, Enforcement, Medicare/Medicaid, Rule 9(b), TX-WD, Upcoding

DOJ Updates Guidance on Evaluating Corporate Compliance Programs

Jun 05 2020

Ike Adams, Craig Francis Dukin, Kristin Graham Koehler, Karen A. Popp, Leslie A. Shubert, Angela M. Xenakis and Sally Bohmfalk

On June 1, 2020, the Criminal Division of the U.S. Department of Justice (DOJ) publicized an updated version of its “Evaluation of Corporate Compliance Program” guidance. This is the third version of the document, with the DOJ having issued the guidance in 2017 (which we analyzed here) and revised it in April 2019 (which we analyzed here). This further revision is another reminder of the DOJ’s heightened focus and increasing sophistication regarding evaluating compliance programs during investigations. While the overall structure of the guidance generally remains consistent with the last version, the revisions provide additional insight into the DOJ’s expectations for corporate compliance programs. More specifically, the revisions highlight the importance of an adequately resourced and empowered compliance department, a constantly evolving compliance program based on the company’s current risk profile and relevant compliance issues, and the use of key compliance metrics to test the effectiveness of a compliance program.

Compliance, Enforcement

Senator Grassley Pushes Back on DOJ’s View of Its Right to Seek to Dismiss FCA Actions over Relators’ Objections

May 27 2020

Scott Stein and Joseph LoCascio

In a May 4, 2020 letter to Attorney General William Barr, Senator Chuck Grassley “vehemently” disagreed with the Department of Justice’s (“DOJ”) view, expressed in a brief recently filed with the Supreme Court by the Solicitor General, that the DOJ’s authority to dismiss an FCA claim “is an unreviewable exercise of prosecutorial authority.” As a principal author of the 1986 FCA amendments that substantially expanded the whistleblower provisions, Senator Grassley argued that he could “confidently say” that the text of the FCA plainly states that the court—not DOJ—should decide whether the government’s motion to dismiss a qui tam claim succeeds.

Enforcement, Granston Memo

Clinical Laboratory to Pay $43 Million to Resolve FCA Liability for Medically Unnecessary Tests; Settlement Demonstrates Importance of Addressing Employee Compliance Concerns

May 11 2020

Jaime L.M. Jones and Catherine Stewart

A specialty laboratory recently agreed to pay up to $43 million to resolve FCA claims based on allegations raised internally and later in a whistleblower complaint filed by its former Chief Medical Officer (CMO). The defendant, Genova Diagnostics Inc. (“Genova”), provides laboratory testing services focused on potential interactions between the environment and the gastrointestinal, endocrine, and immune systems. The tests are used by functional medicine specialists to help develop treatment regimens.

Ability To Pay, Laboratories, Medical Necessity, NC-WD, Stark Law

Ninth Circuit Holds That the FCA Does Not Require Objective Falsehoods and That False Certification of Medical Necessity May Give Rise to FCA Liability

Apr 01 2020

Scott Stein and Matt Bergs

On March 23, 2020, the Ninth Circuit revived a whistleblower suit in which Jane Winter, a registered nurse, alleged that Defendants Gardens Regional Hospital (“Gardens Regional”), S&W Health Management Services (“S&W Health”), RollinsNelson, and various physicians orchestrated medically unnecessary inpatient admissions resulting in the submission of more than $1.2 million in false claims to Medicare. The District Court held that Winter’s allegations failed to state a claim under the FCA because “subjective medical opinions . . . cannot be proved objectively false.” Winter appealed and the Ninth Circuit reversed, finding that the FCA did not does not require plaintiffs to plead objective falsehoods and that false certification of medical necessity may give rise to FCA liability.

Falsity, FCA Liability, Medical Necessity

DOJ Declines to Intervene in Risk Adjustment Qui Tam Suit Brought Against Numerous Medicare Advantage Plans

Mar 20 2020

Jaime L.M. Jones and Jennifer Haney

On March 6, 2020, the United States District Court for the Central District of California unsealed a qui tam complaint filed in May 2018 against Mobile Medical Examination (“MedXM”) and a number of Medicare Advantage Organizations (“MAOs), including, United Healthcare, Wellpoint, Aetna, Health Net, and Molina Healthcare. The qui tam suit, which was brought by former employees of MedXM, alleged that the defendants engaged in a scheme to submit false claims for payment to the federal healthcare programs by inflating risk adjustment payments and providing kickbacks to MA enrollees. The Department of Justice declined to intervene in the suit.

Enforcement, Medicare Advantage, Overpayments

DOJ Says Its Authority to Dismiss Qui Tam Suits Is Expansive Notwithstanding Circuit Split

Mar 10 2020

Jaime L.M. Jones and Joseph LoCascio

In its May 4, 2020 Opposition to the Petition for Writ of Certiorari in United States ex rel. Schneider v. JPMorgan Chase NA, the Department of Justice (“DOJ”) advocated a reading of the FCA that preserves the Executive Branch’s unfettered discretion to dismiss a qui tam, absent “extraordinary circumstances.” DOJ’s power to dismiss derives from FCA Section 3730(c)(2)(A), which provides that the Government “may dismiss” a relator’s action if the relator “has been notified by the Government of the filing of the motion and the court has provided the person with an opportunity for a hearing on the motion.” Since the revealing of the Granston Memo, which we have addressed here and here, DOJ has more frequently sought to use this statutory power. In hopes of doing so in an unrestricted manner, DOJ presented the Supreme Court with the following question in its Opposition: “Whether the United States’ decision to dismiss a relator’s FCA claim under Section 3730(c)(2) is subject to judicial review where the relator does not allege that the government’s dismissal decision was a fraud on the court.”

Granston Memo, U.S. Supreme Court

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Welcome to Original Source: The Sidley Austin False Claims Act Blog

Fifth Circuit Affirms Dismissal of FCA Case Based on Inadequate Pleading of Upcoded Claims

DOJ Updates Guidance on Evaluating Corporate Compliance Programs

Senator Grassley Pushes Back on DOJ’s View of Its Right to Seek to Dismiss FCA Actions over Relators’ Objections

Clinical Laboratory to Pay $43 Million to Resolve FCA Liability for Medically Unnecessary Tests; Settlement Demonstrates Importance of Addressing Employee Compliance Concerns

Ninth Circuit Holds That the FCA Does Not Require Objective Falsehoods and That False Certification of Medical Necessity May Give Rise to FCA Liability

DOJ Declines to Intervene in Risk Adjustment Qui Tam Suit Brought Against Numerous Medicare Advantage Plans

DOJ Says Its Authority to Dismiss Qui Tam Suits Is Expansive Notwithstanding Circuit Split

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