HHS-OIG Flags Certain Extreme Outlier Telehealth Providers as Potentially Engaging in Fraudulent Billing During the Pandemic

HHS-OIG recently issued a report assessing Medicare program integrity risks arising from telehealth services furnished during the first year of the pandemic.  Although HHS-OIG identified only 1,714 providers whose billing for telehealth services “poses a high risk to Medicare”—  a relatively small percentage of the 742,000 providers who billed for telehealth services during the relevant time period—a closer review of the report (OEI-02-20-00720) reveals that HHS-OIG focused on only the most extreme outliers.  Providers who took advantage of CMS telehealth billing flexibilities during the pandemic should consider assessing their own organizations for potential outliers based on HHS-OIG’s metrics.

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D.C. Circuit Holds Defendants Are Entitled To Offset Damages By Amounts Paid By Other Settling Defendants

The D.C. Circuit recently issued an important opinion on an issue of first impression: under what circumstances is an FCA defendant entitled to offset damages by amounts the government or relator has received in settlement from other defendants involving the same claims. The opinion is available here.

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Ninth Circuit Construes Post-2010 Public Disclosure Bar to Include Facts Disclosed During a Patent Office Patent Prosecution

In United States ex rel. Silbersher v. Allergan, Inc., 2022 WL 3652967 (9th Cir. Aug. 26, 2022), the Ninth Circuit ruled that the FCA public disclosure bar, as amended in 2010, encompasses information provided to the U.S. Patent & Trademark Office (“PTO”) during a patent prosecution.  Accordingly, a qui tam action premised entirely on materials obtained from PTO records is barred.

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Provider Escapes, Contractor Remains in Qui Tam Alleging Noncompliance With Bad Debt Regs

Recently, the Seventh Circuit partially reversed a district court’s dismissal of a qui tam complaint alleging that debt collection agencies and their client hospital are liable under the FCA for the agencies’ knowing failing to comply with Medicare’s “bad debt” collection requirements.  See United States ex rel. Sibley v. University of Chicago Medical Center, No. 21-2610 (7th Cir. Aug. 11, 2022).  In reaching this decision, the court concluded that the relators had adequately pled that reasonable collection efforts are material to the government’s decision to reimburse Medicare bad debts.

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Fourth Circuit Underscores the Risk of Commission-Based Compensation Agreements with Independent Contractors

In a recent decision, the Fourth Circuit Court of Appeals for the second time in two years held that commission-based compensation arrangements with independent contractors cannot be safe harbored and do violate the Anti-Kickback Statute and FCA.  See United States ex rel. Nicholson v. Medcom Carolinas, Inc., No. 21-1290 (4th Cir. July 21, 2022).

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Eighth Circuit Holds that AKS Violations Do Not “Taint” All Claims

The Eighth Circuit Court of Appeals recently issued a notable decision that offers defendants in FCA cases premised on violations of the Anti-Kickback Statute (“AKS”) significant new defenses relating to causation.  The panel soundly rejected the government’s position that as a result of the 2010 amendments to the AKS, any claim provided in violation of the AKS is tainted, and therefore “false,” under the FCA.  Instead, the Eighth Circuit held that for an AKS violation to render a claim false, the kickback must have been the but-for cause of the submission of the claim.  United States ex rel. Cairns v. D.S. Medical LLC, No. 20-3010, 2022 WL 2930946 (8th Cir. July 26, 2022).  The decision creates a circuit split with the Third Circuit and given the many courts of appeal that have not weighed in on this question, promises to generate renewed debate in district courts across the country as to the appropriate causation standard in FCA cases involving alleged violations of the AKS.

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Court Rejects “Tenuous” Connection Between FDCA Regulatory Violations and Claims for Payment

Recently, a district court in the Southern District of Florida dismissed with prejudice a qui tam complaint premised on the alleged sale of products adulterated and misbranded under the Food Drug and Cosmetic Act (“FDCA”). United States ex rel. Crocano v. Trividia Health Inc., No. 22-CV-60160-RAR (S.D. Fla. July 18, 2022).  In so doing, the court declined to embrace the arguments asserted in a Statement of Interest filed by DOJ and reiterated that “the False Claims Act is not the proper avenue for holding [companies] accountable” for violations of the FDCA, because “the FDA’s use of its regulatory enforcement  powers may be exercised fully to ensure further compliance.”

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CBO Reports on Grassley Bill That Would Modify Escobar Materiality and Impose Rational Relation Test on Granston Dismissals

On July 15, 2022, the Congressional Budget Office (CBO) issued a cost estimate concerning the False Claims Amendments Act of 2021, a bill sponsored by Senator Grassley.  The bill would alter the False Claims Act in three important ways. (more…)

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