FCA/Investigations & Enforcement

Last week, Mintz Levin’s Health Care Enforcement Defense Group published a new Qui Tam Update, which analyzes 46 health care-related False Claims Act qui tam cases unsealed in February and March 2018 and the trends they reflect:

  • Long delays in unsealing remain common. While one case was unsealed after 61 days (just one day over the 60-day period specified by statute), the average time under seal for these cases was 851 days (i.e., approximately 2 years, 4 months). The oldest case was under seal for just over 6 years.
  • 17 of the 46 cases were dismissed in their entirety. The remaining 29 cases were still active.
  • Former employees were again the most common type of relator, accounting for 23 of the 46 cases at issue. Current employees and business partners were also among relators.
    • Notably, patients joined the relator ranks in two of the cases we reviewed.
  • These cases were filed in 38 different courts. Jurisdictions with the most unsealed cases were:
    • Middle District of Florida (Jacksonville, Orlando, and Tampa) with six;
    • Northern District of Ohio (Cleveland) with three; and
    • District of Kansas, the Eastern District of Tennessee (Chattanooga and Knoxville), the Northern District of Illinois (Chicago), and the Southern District of Florida (Miami, Fort Lauderdale, and West Palm Beach) with two each.
  • Home health and hospice providers, as well as hospitals and hospital systems, were the most common type of defendant in the cases we reviewed (with 7 cases filed against home health and hospice providers and 7 cases filed against hospitals and hospital systems). Five cases were brought against pharmaceutical and biotech firms; three cases were filed against physicians and physician practices; and three case were filed against health insurers.

Continue Reading Mintz Levin’s Health Care Enforcement Defense Group Publishes New Qui Tam Update

Last week, the Department of Health and Human Services – Office of Inspector General (“OIG”) released a portfolio report identifying multiple vulnerabilities in the Medicare Hospice Program (the “Hospice Portfolio Report”), including concerns around billing, federal oversight, and quality of care. The OIG made 16 recommendations to CMS to strengthen the hospice program; CMS only concurred with 6 of the recommendations.

Notwithstanding CMS’ non-concurrence to the majority of the OIG’s recommendations, these findings may preview increased enforcement actions in the hospice space. In recent years, the OIG has released two other portfolio reports: one on vulnerabilities in Medicaid personal care services (“PCS”) and a second on the Medicare Part D program. Following the release of each of these reports, the number of reported investigations and prosecutions in the affected spaces surged. For example, since the OIG’s release of its report on PCS in 2012, the OIG has opened more than 200 federal criminal investigations involving fraud and patient harm by PCS providers; state investigations similarly increased.

This post outlines the OIG’s findings and recommendations related to hospice program vulnerabilities, as well as what these findings and recommendations may mean for hospice providers. Continue Reading The OIG Identifies “Significant Vulnerabilities” in the Medicare Hospice Program: What This Might Mean for Hospice Providers?

The Tenth Circuit Court of Appeals has issued a significant decision, finding that a physician’s medical judgment about the medical necessity of heart procedures can be “false or fraudulent” under the federal False Claims Act (FCA). United States ex rel. Polukoff v. St. Mark’s Hosp., et al., No. 17-4014 (10th Cir. Jul. 9, 2018). The district court previously had dismissed the FCA case on a motion to dismiss, a development my colleagues discussed in detail in a prior post. The Tenth Circuit’s ruling not only revived relator’s qui tam FCA case, but also may open the door to more FCA lawsuits based on allegations that claims for treatments or services reimbursed by federal health care programs are “false” because they are not “medically necessary.” Continue Reading Tenth Circuit Revives FCA Claim Based on Alleged Lack of Medical Necessity

Last week, Mintz Levin’s Health Care Enforcement Defense Group published a new Qui Tam Update, which analyzes 60 health care-related False Claims Act qui tam cases unsealed in December 2017 and January 2018 and the trends they reflect:

  • The government intervened in 14% of those unsealed cases (a figure that is consistent with the longer-term trends we have seen over the prior twelve months).
  • Of the 60 unsealed cases, only 28 were being litigated (at least initially). The remaining 32 cases were docketed as closed or dismissed.
  • The 60 unsealed cases were filed in 38 different courts. Jurisdictions with the most unsealed cases included:
    • The Central District of California (which includes Los Angeles) with six cases;
    • The Middle District of Florida (which includes Jacksonville, Orlando, and Tampa) with 4 cases; and
    • The District of Connecticut and Eastern District of Louisiana (New Orleans), each with 3 cases.
  • The most frequently targeted types of defendants included:
    • Pharmaceutical companies, hospitals, and healthcare systems, with each accounting for 9 of the 60 unsealed cases.
    • Physicians and physician group practices, which were targeted in 7 cases.
    • Home health and hospice providers, which were the subject of 6 cases.
    • Outpatient clinics, which were defendants in 5 cases.
  • Former employees were again the most frequent relator type, accounting for 23 of the 60 unsealed cases. Expert witnesses brought 7 cases and current employees brought 2 cases.
  • Only one of the cases was unsealed within the 60-day period specified by statute. That case was under seal for 55 days.
  • The longest time a case was under seal was almost eight-and-a-half years. Average time under seal for this cohort was 700 days, though half of these cases were unsealed in 16 months or less, and 23 of these 60 cases were unsealed in less than a year.

Continue Reading Mintz Levin’s Health Care Enforcement Defense Group Publishes New Qui Tam Update

States may be starting to take aim at prescription automatic refill programs. Automatic refill programs have been proven to increase patient adherence, especially among patients with chronic conditions. However, these programs are not popular among regulators: Medicare Part D and several state boards of pharmacy have prohibited these programs for mail order pharmacies and an increasing number of state Medicaid programs are prohibiting automatic refill programs for both mail and retail pharmacies. Regulators argue that automatic refill programs result in waste to the system, stockpiling, and federal program payment for unneeded prescriptions.

Last week, Wal-Mart and Sam’s Club paid $825,000 to the Minnesota Attorney General and the Department of Justice to settle allegations that they violated the False Claims Act and Minnesota False Claims Act by automatically refilling prescriptions and billing Medicaid without a specific authorization from the patient. These alleged violations appear to be for prescriptions filled at both retail and mail. Continue Reading The Hazards of Prescription Auto-Refill Programs

Recently the U.S. Department of Justice (DOJ) issued a statement that it had intervened in a False Claims Act (FCA) case against Insys Therapeutics, Inc. and consolidated five separate qui tam cases into one case, U.S. ex rel Guzman v. Insys Therapeutics, Inc., filed in the U.S. District Court for the Central District of California. The complaint revealed that multiple states—California, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Louisiana, Michigan, Minnesota, Montana, Nevada, Massachusetts, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Rhode Island, Tennessee, Texas, Virginia, and Washington—as well as the District of Columbia, have also joined the case.

Continue Reading DOJ Continues Aggressive Enforcement Action Against Opioid Manufacturers

Mintz Levin and ML Strategies will host the 3rd Annual Pharmacy & Pharmaceutical Industry Summit on May 8, 2018!  This year’s summit will take place in Boston and we are thrilled to announce that Massachusetts Governor Charlie Baker will be the keynote speaker.  The Summit brings together stakeholders and thought leaders to discuss current hot topics facing manufacturers, PBMs, payors, pharmacies, and other providers.  This year’s Summit will include sessions on:

  • The evolving drug supply chain – distruptor models and the Amazon effect
  • Addressing drug pricing and supply chain economics – government investigations and ERISA litigation
  • The uncertain state of the 340B program
  • Government enforcement targeting financial relationships
  • Combatting the opioid crisis

For additional information on the Summit, including the full agenda and registration information, please visit our event website.

Mintz Levin’s Health Care Enforcement Defense Group released its most recent Health Care Qui Tam Update yesterday.  This Update analyzes 56 qui tam cases unsealed in October and November of last year. None of the 56 cases in this Update were unsealed within the statutorily-mandated 60 days, but one case was unsealed in 71 days. Additional trends include:

  • Cases were most often brought against hospitals, health systems, pharmaceutical manufacturers, and pharmacies;
  • The government intervened in 20% of the cases;
  • Of the cases in which the government declined to intervene, 60% continued to be litigated (at least initially) by the relators; and
  • Cases continue to be brought most often by former or current employees.

Click here to read the full Update.

 

Last week, the U.S. Attorney’s Office for the District of Massachusetts announced that it had entered into an agreement with a Massachusetts-based medical device manufacturer to settle allegations that the Company had violated the False Claims Act by purchasing lavish meals for physicians to induce them to use heart pumps manufactured by the Company.

The government’s allegations are not particularly novel, but do serve as an important reminder to health care providers and suppliers that it is important to institute, and remain vigilant about, sound compliance practices across all areas of their business.  These allegations also make clear that the government continues to be focused on providers’ and suppliers’ sales and marketing practices. Continue Reading Recent FCA Settlement Shows That What’s Old Is New in Health Care Fraud Enforcement

The Department of Justice (DOJ) recently intervened in a False Claims Act (FCA) case that raises a variety of interesting allegations, including payment of kickbacks by a compounding pharmacy to contracted marketing companies in the form of percentage-based compensation, to TRICARE beneficiaries in the form of copayment waivers, and to physicians who submitted prescriptions without seeing patients.  According to the complaint, Patient Care America (PCA), a Florida compounding pharmacy, implemented a scheme to manipulate the compounding formula for pain and scar creams that resulted in the submission of false claims to TRICARE.  The complaint also names two of PCA’s senior executives (one of which has since left the company) as well as the private equity firm that owns a controlling interest in PCA. Continue Reading DOJ Intervenes in False Claims Act Case Against a Compounding Pharmacy and a Private Equity Firm