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
Last week a court in the District of Massachusetts took the rare step of allowing an FCA defendant to pursue an interlocutory appeal arising from the summary judgment stage of an FCA case in which DOJ is seeking $10 billion in damages and penalties. The question on appeal asks the First Circuit to take a side in an expanding circuit split on the requisite causation requirement for AKS violations to trigger FCA liability.
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. Jones2023-08-23 14:35:552023-09-11 10:06:00Court Certifies Interlocutory Appeal to First Circuit on Causation Standard Connecting AKS Violations and the FCA
In a recent decision, United States ex rel. Silbersher v. Valeant Pharmaceuticals Int’l Inc., 2023 WL 4940429 (9th Cir. Aug. 3, 2023) (“Valeant”), the Ninth Circuit ruled that the False Claims Act’s (“FCA”) public disclosure bar does not apply to inter partes review (“IPR”) proceedings—holding that, unlike patent prosecutions, IPRs are not a qualifying channel for disclosures under the bar. The panel also ruled that the qualifying disclosures the Valeant defendants did identify did “not disclose a combination of facts sufficient to permit a reasonable inference of fraud.” The panel’s decision reversed a district court’s conclusion that the bar did apply, greenlighting the relator’s lawsuit to proceed to its merits.
https://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.png00Gordon D. Toddhttps://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.pngGordon D. Todd2023-08-22 10:10:202023-09-11 09:52:33Ninth Circuit Excludes Inter Partes Review Proceedings from Public Disclosure Bar and Greenlights Relator’s Qui Tam Claims Based on Patent Activity
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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
Catherine Stewart
Chicago
catherine.stewart@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
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
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
Court Certifies Interlocutory Appeal to First Circuit on Causation Standard Connecting AKS Violations and the FCA
Last week a court in the District of Massachusetts took the rare step of allowing an FCA defendant to pursue an interlocutory appeal arising from the summary judgment stage of an FCA case in which DOJ is seeking $10 billion in damages and penalties. The question on appeal asks the First Circuit to take a side in an expanding circuit split on the requisite causation requirement for AKS violations to trigger FCA liability.
(more…)
Jaime L.M. Jones
Chicago
jaimejones@sidley.com
Brenna E. Jenny
Joseph R. LoCascio
Chicago
joseph.locascio@sidley.com
Ninth Circuit Excludes Inter Partes Review Proceedings from Public Disclosure Bar and Greenlights Relator’s Qui Tam Claims Based on Patent Activity
In a recent decision, United States ex rel. Silbersher v. Valeant Pharmaceuticals Int’l Inc., 2023 WL 4940429 (9th Cir. Aug. 3, 2023) (“Valeant”), the Ninth Circuit ruled that the False Claims Act’s (“FCA”) public disclosure bar does not apply to inter partes review (“IPR”) proceedings—holding that, unlike patent prosecutions, IPRs are not a qualifying channel for disclosures under the bar. The panel also ruled that the qualifying disclosures the Valeant defendants did identify did “not disclose a combination of facts sufficient to permit a reasonable inference of fraud.” The panel’s decision reversed a district court’s conclusion that the bar did apply, greenlighting the relator’s lawsuit to proceed to its merits.
(more…)
Gordon D. Todd
Washington, D.C.
gtodd@sidley.com
Kamila Rivas
Washington, D.C.
krivas@sidley.com
Kimberly Leaman
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