The Department of Commerce (“Commerce”) has published the inflationary adjustments to civil monetary penalties associated with False Claims Act violations that went effect January 15, 2024. As we previously reported, the 2015 Balanced Budget Act provides for federal agencies to make inflationary adjustments to civil monetary each year to account for inflation using calculations based on the Bureau of Labor Statistics’ Consumer Price Index (“CPI”), which measures the change between the prices urban consumers pay for a market basket of consumer goods and services. The 2024 civil monetary penalties adjustment was calculated using the percentage of change between the October 2022 CPI and the October 2023 CPI. The adjusted penalties will be assessed for violations that occurred prior to the adjustment, but are assessed after January 15, 2024. The minimum False Claims Act penalty has increased from $13,508 to $13,946 per claim and the maximum penalty has increased from $27,018 to $27,894 per claim.
https://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.png00Scott D. Steinhttps://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.pngScott D. Stein2024-01-22 17:32:532024-01-22 17:32:532024 Inflationary Adjustments to FCA Penalties Announced
As discussed here, the Department of Justice (“DOJ”) has prioritized investigating whether Medicare Advantage (“MA”) plans and providers have submitted unsupported risk-adjusting diagnosis codes, in violation of the False Claims Act. The U.S. Department of Health and Human Services Office of Inspector General (“HHS-OIG”) has also been active in this space and issued a number of audits of MA plans within the past few years, often focusing on diagnosis codes it characterizes as “high risk.” HHS-OIG acknowledged that stakeholders “have asked us to share with them how we decided which diagnosis codes were at high risk for being miscoded,” and in response, HHS-OIG issued this toolkit detailing how it has used data analytics to guide its work. The toolkit offers compliance functions at MA plans and providers a path to assessing whether their coding puts them at risk of government scrutiny.
Earlier this month, the Department of Justice (“DOJ”) issued a press release announcing that healthcare system Community Health Network Inc. (“Community”) agreed to pay $345 million to resolve allegations that it had violated the False Claims Act by knowingly submitting claims to Medicare for services that were referred to it in violation of the Stark Law. In connection with the settlement, Community also entered into a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General.
https://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.png00Jaime L.M. Joneshttps://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.pngJaime L.M. Jones2023-12-27 14:05:582023-12-27 16:11:04DOJ Announces Largest Stark Law FCA Settlement Since 2006
A recent decision from the District of Minnesota applying the Eighth Circuit’s new but-for causation requirement for connecting violations of the Anti-Kickback Statute (AKS) to FCA violations emphasizes the importance of the circuit split over the correct causation standard, while also highlighting challenges defendants can face post-Supervalu, particularly at the motion to dismiss stage, when arguing that their intent was inconsistent with the FCA’s scienter element. See United States ex rel. Louderback v. Sunovian Pharmaceuticals, Inc., No. 17-cv-1719 (D. Minn. Nov. 27, 2023). (more…)
As reported last week here, the Chief Judge of the District of Massachusetts held that a claim “result[s] from” a kickback only if the defendant would not have included particular items or services in the claim but for the kickback. United States v. Regeneron Pharma., Inc., No. 20-11217-FDS (D. Mass. Sept. 27, 2023). In so holding, the court aligned itself with decisions in the Sixth and Eighth Circuits, and rejected the Third Circuit’s looser standard that a false claim “result[s] from” a kickback where a patient was merely “exposed to an illegal recommendation or referral” and a physician submitted a claim “pertaining to that patient.” We have previously reported on this circuit split here and here.
https://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.png00Scott D. Steinhttps://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.pngScott D. Stein2023-10-03 15:09:192023-10-03 15:09:19District of Massachusetts Adopts But-For Causation Test for FCA Claims Premised on AKS Violations
On September 27, 2023, the District of Massachusetts, assessing the causation standard linking Anti-Kickback Statute violations to FCA liability, determined that a claim “result[s] from” a kickback only if the defendant would not have included particular items or services in the claim but for the kickback. We have previously written about the circuit split on this issue here and here. We will follow up with an additional post describing the court’s opinion, available here, in greater detail.
https://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.png00Scott D. Steinhttps://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.pngScott D. Stein2023-09-29 19:05:062023-09-29 19:05:06District of Massachusetts Adopts But-For Causation Test for FCA Claims Premised on AKS Violations
Recently, DOJ quietly began implementing what appears to be a new policy to memorialize in FCA settlements the basis for the settling company earning credit for various forms of cooperation.
Chastising DOJ for asking eighteen times to extend the seal period, the Fifth Circuit recently held that due to its “dilatory conduct,” DOJ could not avail itself of the FCA’s tolling provision. In the same opinion, the court held that continued reimbursement does not defeat materiality where there are “valid reasons why an agency may continue to pay claims despite allegations of fraud.”
https://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.png00Scott D. Steinhttps://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.pngScott D. Stein2023-09-08 12:31:382023-09-08 12:31:38Chiding DOJ for “Inexcusable” Delay in Deciding to Intervene, Fifth Circuit Makes Notable Determinations on Materiality and Statute of Limitations
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2024 Inflationary Adjustments to FCA Penalties Announced
The Department of Commerce (“Commerce”) has published the inflationary adjustments to civil monetary penalties associated with False Claims Act violations that went effect January 15, 2024. As we previously reported, the 2015 Balanced Budget Act provides for federal agencies to make inflationary adjustments to civil monetary each year to account for inflation using calculations based on the Bureau of Labor Statistics’ Consumer Price Index (“CPI”), which measures the change between the prices urban consumers pay for a market basket of consumer goods and services. The 2024 civil monetary penalties adjustment was calculated using the percentage of change between the October 2022 CPI and the October 2023 CPI. The adjusted penalties will be assessed for violations that occurred prior to the adjustment, but are assessed after January 15, 2024. The minimum False Claims Act penalty has increased from $13,508 to $13,946 per claim and the maximum penalty has increased from $27,018 to $27,894 per claim.
(more…)
Scott D. Stein
Chicago
sstein@sidley.com
Catherine Stewart
Chicago
cstewart@sidley.com
HHS-OIG Releases Medicare Advantage Toolkit to Guide Internal Auditing
As discussed here, the Department of Justice (“DOJ”) has prioritized investigating whether Medicare Advantage (“MA”) plans and providers have submitted unsupported risk-adjusting diagnosis codes, in violation of the False Claims Act. The U.S. Department of Health and Human Services Office of Inspector General (“HHS-OIG”) has also been active in this space and issued a number of audits of MA plans within the past few years, often focusing on diagnosis codes it characterizes as “high risk.” HHS-OIG acknowledged that stakeholders “have asked us to share with them how we decided which diagnosis codes were at high risk for being miscoded,” and in response, HHS-OIG issued this toolkit detailing how it has used data analytics to guide its work. The toolkit offers compliance functions at MA plans and providers a path to assessing whether their coding puts them at risk of government scrutiny.
(more…)
Jaime L.M. Jones
Chicago
jaimejones@sidley.com
Brenna E. Jenny
Washington, D.C.
bjenny@sidley.com
Francesca R. Ozinal
Washington, D.C.
fozinal@sidley.com
DOJ Announces Largest Stark Law FCA Settlement Since 2006
Earlier this month, the Department of Justice (“DOJ”) issued a press release announcing that healthcare system Community Health Network Inc. (“Community”) agreed to pay $345 million to resolve allegations that it had violated the False Claims Act by knowingly submitting claims to Medicare for services that were referred to it in violation of the Stark Law. In connection with the settlement, Community also entered into a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General.
(more…)
Jaime L.M. Jones
Chicago
jaimejones@sidley.com
Brenna E. Jenny
Washington, D.C.
bjenny@sidley.com
Catherine Stewart
Chicago
cstewart@sidley.com
Court Requires But-For Causation for AKS-FCA Violations But Highlights Potential Defense Challenges from the Supervalu Decision
A recent decision from the District of Minnesota applying the Eighth Circuit’s new but-for causation requirement for connecting violations of the Anti-Kickback Statute (AKS) to FCA violations emphasizes the importance of the circuit split over the correct causation standard, while also highlighting challenges defendants can face post-Supervalu, particularly at the motion to dismiss stage, when arguing that their intent was inconsistent with the FCA’s scienter element. See United States ex rel. Louderback v. Sunovian Pharmaceuticals, Inc., No. 17-cv-1719 (D. Minn. Nov. 27, 2023). (more…)
Jaime L.M. Jones
Chicago
jaimejones@sidley.com
Brenna E. Jenny
Washington, D.C.
bjenny@sidley.com
Lauren McBride
Chicago
lmcbride@sidley.com
District of Massachusetts Adopts But-For Causation Test for FCA Claims Premised on AKS Violations
As reported last week here, the Chief Judge of the District of Massachusetts held that a claim “result[s] from” a kickback only if the defendant would not have included particular items or services in the claim but for the kickback. United States v. Regeneron Pharma., Inc., No. 20-11217-FDS (D. Mass. Sept. 27, 2023). In so holding, the court aligned itself with decisions in the Sixth and Eighth Circuits, and rejected the Third Circuit’s looser standard that a false claim “result[s] from” a kickback where a patient was merely “exposed to an illegal recommendation or referral” and a physician submitted a claim “pertaining to that patient.” We have previously reported on this circuit split here and here.
(more…)
Scott D. Stein
Chicago
sstein@sidley.com
Jaime L.M. Jones
Chicago
jaimejones@sidley.com
Joseph R. LoCascio
Chicago
joseph.locascio@sidley.com
District of Massachusetts Adopts But-For Causation Test for FCA Claims Premised on AKS Violations
On September 27, 2023, the District of Massachusetts, assessing the causation standard linking Anti-Kickback Statute violations to FCA liability, determined that a claim “result[s] from” a kickback only if the defendant would not have included particular items or services in the claim but for the kickback. We have previously written about the circuit split on this issue here and here. We will follow up with an additional post describing the court’s opinion, available here, in greater detail.
Scott D. Stein
Chicago
sstein@sidley.com
Jaime L.M. Jones
Chicago
jaimejones@sidley.com
Joseph R. LoCascio
Chicago
joseph.locascio@sidley.com
DOJ Begins Memorializing Basis for Cooperation Credit in FCA Settlement Agreements
Recently, DOJ quietly began implementing what appears to be a new policy to memorialize in FCA settlements the basis for the settling company earning credit for various forms of cooperation.
(more…)
Jaime L.M. Jones
Chicago
jaimejones@sidley.com
Brenna E. Jenny
Washington, D.C.
bjenny@sidley.com
Jane E. Fisher
Chicago
jane.fisher@sidley.com
Chiding DOJ for “Inexcusable” Delay in Deciding to Intervene, Fifth Circuit Makes Notable Determinations on Materiality and Statute of Limitations
Chastising DOJ for asking eighteen times to extend the seal period, the Fifth Circuit recently held that due to its “dilatory conduct,” DOJ could not avail itself of the FCA’s tolling provision. In the same opinion, the court held that continued reimbursement does not defeat materiality where there are “valid reasons why an agency may continue to pay claims despite allegations of fraud.”
(more…)
Scott D. Stein
Chicago
sstein@sidley.com
Jaime L.M. Jones
Chicago
jaimejones@sidley.com
Joseph R. LoCascio
Chicago
joseph.locascio@sidley.com
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