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On August 6, 2019, the United States District Court for the Western District of Texas granted a motion to dismiss filed by Baylor Scott & White Health (“Baylor”), a network of inpatient short-term acute care hospitals, in a False Claims Act suit alleging that Baylor submitted “more than $61.8 million in false claims” by upcoding certain diagnosis codes. The Court dismissed all claims with prejudice, finding that the Relator, Integra Med Analytics LLC, alleged only “naked assertions devoid of further factual enhancement” that were “insufficient under Rule 8’s pleading standards.” The Department of Justice declined to intervene in the suit.

Medicare Advantage, Motion to Dismiss, Overpayments, Providers, TX-WD, Upcoding

Court Establishes a Test to Determine the Scope of the FCA’s “News Media” Provision

Aug 09 2019

Jaime L.M. Jones and Joseph LoCascio

On July 16, 2019, the United States District Court for the Central District of California granted in part and denied in part motions to dismiss a declined FCA suit against defendants Providence Health & Services (“Providence”), its affiliates, and J.A. Thomas and Associates, Inc. (“JATA”), a clinical documentation consultant. The suit alleges that Providence perpetrated an upcoding scheme whereby it trained its doctors to describe medical conditions with language that would support increasing the severity levels of the DRGs that Providence reported to Medicare, leading to inflated Medicare reimbursements.

Anti-Kickback Statute, CA-CD, Motion to Dismiss, Providers, Public Disclosure

Eleventh Circuit Holds That It Is Relator’s Burden To Prove Lack of Fair Market Value As An Essential Element of AKS-Based Claims

Aug 05 2019

Scott Stein, Jaime L.M. Jones and Neil Nandi

Last week, the Eleventh Circuit issued an opinion holding that a Relator bringing an FCA claim premised on an AKS violation – at least when relating to lease arrangements – must show that the financial arrangements were not at fair market value. See Bingham v. HCA, Inc., Case No. 1:13-cv-23671 (11th Cir. 2019). Significantly, this ruling provides that proving fair market value (or lack thereof) is not a burden imposed solely on defendants as part of a safe harbor defense, but is instead an essential element to establishing the existence of remuneration in the first instance. In the same opinion, the court also held that a Relator cannot rely upon information gleaned in discovery to satisfy Rule 9(b)’s pleading requirements.

11th Circuit, Anti-Kickback Statute, Rule 9(b), Stark Law, Summary Judgment

Minnesota District Court Orders Government to Identify Specific False Claims and Provide Witness Interview Materials

Aug 05 2019

Kristin Graham Koehler and Elizabeth Kolbe

A recent decision from the District of Minnesota denied the government’s appeal of a federal magistrate judge’s order requiring that, as part of discovery, the government detail specific false claims and turn over notes and reports of witness interviews. The underlying case is a qui tam alleging that Precisions Lens and its founder provided kickbacks to physicians to induce the use of its eye surgery products.

Discovery, Privilege Issues

D.C. Circuit Rejects Expansive Theory of FCA Liability Predicated on Failure to Pay an Unassessed Penalty

Jul 22 2019

James M. Perez and Waqas Akmal

On July 5, 2019, the D.C. Circuit affirmed the dismissal of a qui tam lawsuit against several chemical manufacturers alleging that they violated the False Claims Act by failing to pay civil penalties owed under the Toxic Substances Control Act, 15 U.S.C. §§ 2601 (1976) (“TSCA”) for the manufacturers’ repeated failures to report “information regarding the dangers of isocyanate chemicals” to the EPA. The law firm Kasowitz Benson Torres LLP, which is the relator in the case, urged the D.C. Circuit “to become the first court to recognize FCA liability based on the defendants’ failure to meet a TSCA reporting requirement and on their failure to pay an unassessed TSCA penalty.” The D.C. Circuit declined that invitation.

D.C. Circuit, Overpayments, Reverse False Claims

Seventh Circuit Remand on “Proximate Cause” Issue Results in Summary Judgment for Defendant on FCA Claim

Jul 17 2019

Robert J. Conlan and P. Kai Knight

Two years ago, the Seventh Circuit reversed itself by abandoning its “but-for” causation test in FCA cases in favor of a “proximate cause” rule that had been adopted by all other circuits that had addressed the issue. See United States v. Luce, 873 F.3d 999 (7th. Cir. 2017) (overruling United States v. First National Bank of Cicero, 957 F.2d 1362 (7th Cir. 1992)). The Seventh Circuit remanded the case to the district court with instructions to determine whether the government could establish that the defendant’s conduct proximately caused harm to the government. In an opinion issued last week, the district court strictly applied the new standard and concluded the government could not show proximate cause. United States v. Luce, 2019 U.S. Dist. LEXIS 114718 (N.D. Ill. July 10, 2019).

7th Circuit, Causation, Summary Judgment

Sutter Health Files Motion to Dismiss Criticizing DOJ’s Outdated FCA Theories in Medicare Advantage Case

Jun 28 2019

Jaime L.M. Jones and Jennifer Haney

On June 14, 2019, Sutter Health (“Sutter”) filed a Motion to Dismiss the Department of Justice’s Complaint-in-Intervention in a False Claims Act suit alleging Sutter knowingly submitted and caused the submission of unsupported diagnoses codes for Medicare Advantage patients in order to inflate Medicare reimbursements. The Department of Justice filed its Complaint-in-Intervention on March 4, 2019, which we previously discussed here.

CA-ND, Medicare Advantage, Motion to Dismiss, Overpayments, Providers, Upcoding

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

District Court Dismisses FCA Suit in Medicare Advantage Upcoding Case

Court Establishes a Test to Determine the Scope of the FCA’s “News Media” Provision

Eleventh Circuit Holds That It Is Relator’s Burden To Prove Lack of Fair Market Value As An Essential Element of AKS-Based Claims

Minnesota District Court Orders Government to Identify Specific False Claims and Provide Witness Interview Materials

D.C. Circuit Rejects Expansive Theory of FCA Liability Predicated on Failure to Pay an Unassessed Penalty

Seventh Circuit Remand on “Proximate Cause” Issue Results in Summary Judgment for Defendant on FCA Claim

Sutter Health Files Motion to Dismiss Criticizing DOJ’s Outdated FCA Theories in Medicare Advantage Case

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