FCA/Investigations & Enforcement

Earlier this week we released a Health Care Enforcement Advisory about a recent decision from the U.S. Court of Appeals for the Fifth Circuit that may have a significant impact on the element of “materiality” in False Claims Act (FCA) cases.  A panel of judges on the Fifth Circuit overturned a district court decision after a jury found the defendant, Trinity Industries, Inc. (Trinity), liable under the FCA for changing its highway guardrail design without disclosing such changes to the Federal Highway Administration (“FHWA”).  The Fifth Circuit decided as a matter of law that the case lacked the element of “materiality” required in FCA cases. Continue Reading Fifth Circuit Limits FCA Liability Due to Lack of “Materiality” in Highway Guardrails Case

In this post, I will be focusing on the intersection of off-label communications with government enforcement of health care fraud through the False Claims Act. Over the past eight years, the U.S. Department of Justice (“DOJ”) has been particularly aggressive in using the False Claims Act to pursue recoveries from individuals, health care providers, and drug manufacturers that participate in federal health benefit programs. In fact, from 2009 to 2016, DOJ collected $19.3 billion from health care False Claims Act settlements and judgments, with $2.5 billion recovered in fiscal year 2016, alone. (More DOJ false claims statistics can be found here.) DOJ’s enforcement efforts are not solely targeted against garden variety billing fraud, but also involve claims arising from alleged violations of health care regulatory requirements. Among other things, the DOJ has been targeting claims for reimbursement for off-label uses of regulated products. DOJ’s aggressive policy of holding manufacturers accountable for off-label claims under the False Claims Act is entirely consistent with FDA’s stance on off-label communications as described in the January memo. However, recent court interpretations of off-label communications as protected First Amendment speech, as well as interpretations of the causality component of False Claims Act claims, have apparently caused DOJ to reconsider its strategy with respect to such cases. Continue Reading The Past, Present, and Future of Government Regulation of Off-Label Communications – Part 5

Earlier this month, Mintz Levin’s Health Care Enforcement Defense Group published its most recent Health Care Qui Tam Update that looks at 23 health care-related qui tam cases unsealed in June 2017. The Update provides an in-depth analysis of six cases in which the government intervened, and discusses why these cases are notable in the health care industry.

The Update also provides a summary of the trends revealed in these recently unsealed cases:

  • The cases identified were filed in federal district courts in 18 states, including four filed in the active Middle District of Florida.
  • Of the cases identified, the federal government intervened, in whole or in part, in eight cases and declined to intervene in 13. There were two cases in which the intervention status could not be determined from the case docket.
  • The entities named in the qui tam actions included outpatient medical providers, laboratory testing companies, inpatient hospitals, and medical supply companies.
  • In all but three cases, the relators were current or former employees of the defendants.
  • Once again, there were long delays in unsealing these cases, with an average time under seal of just over two years and four months. And one case had been under seal for almost nine years.

Click HERE for the full Update and to find our key takeaways from the cases discussed.

In a major public move that has been long-awaited by proponents of evidence-based stem cell science, FDA Commissioner Scott Gottlieb issued a lengthy statement on August 28, 2017 “on the FDA’s new policy steps and enforcement efforts to ensure proper oversight of stem cell therapies and regenerative medicine.” Continue Reading FDA Commissioner Announces Stem Cell Enforcement Shift, Plans to Develop Comprehensive Regenerative Medicine Policies

On August 17, 2017, the U.S. Department of Justice (DOJ) announced that it had reached a $465 million false claims settlement with Mylan, the manufacturer of EpiPen, over the company’s alleged underpayment of Medicaid Drug Rebates for EpiPen. The settlement amount and terms were generally announced by Mylan in October 2016 – but back then DOJ refused to confirm the settlement.

Back in October 2016, we theorized that the announced “settlement” was likely a handshake deal, not yet reduced to writing and not signed off on by the necessary parties.  It’s not surprising that it would take ten months to finalize a health care false claims settlement.  In Ellyn’s government days, she worked cases that took years, not months, to get from handshake deal to announced settlement.

And in reviewing the EpiPen settlement and related unsealed documents, there were things we expected to see in the settlement; admittedly we are grizzled veterans when it comes to false claims settlements.  But there were some things about this settlement that raised our eyebrows. So we will (briefly) recap how we got here and the settlement terms, and discuss the four things that surprised us about this settlement.  Continue Reading The Four Things That Surprised Us in the EpiPen False Claims Settlement

Last week, Mintz Levin’s Health Care Enforcement Defense Group published a new Qui Tam Update, which analyzes 21 health care-related False Claims Act qui tam cases unsealed in May 2017, and the findings include:

  • long delays in unsealing remain the norm;
  • relators overwhelmingly consisted of current and former employees (and physicians); and
  • the most common alleged violation was billing fraud (which was claimed in two-thirds of the 21 unsealed cases).

Also of note in this Update:

  • The targeted entities in these 21 cases included outpatient medical and psychological providers, laboratory testing companies, inpatient hospitals, and home health care providers.
  • Of the 21 cases, the government intervened, in whole or in part, in seven cases and declined to intervene in 10.  (Intervention status could not be determined from the docket in four cases.)
  • The cases were filed in 17 different courts (including the Central District of California, the District of South Carolina, the Eastern District of Michigan, and the Northern District of California).

This Update provides in-depth analysis of three of the unsealed cases, which involve allegations regarding (1) “up coding” by a hospital that allegedly billed routine transport as emergency transport, which was reimbursed at a higher rate; (2) billing for medically unnecessary tests that purported to identify susceptibility to opioid addiction and engaging in a kickback scheme; and (3) processing prior authorization requests for MCOs using automated procedures to expedite processing and circumvent medical necessity determinations, resulting in submission of false claims.

Continuing its annual tradition, the U.S. Department of Justice (“DOJ”) and the U.S. Department of Health and Human Services (“HHS”) announced last week the largest ever health care fraud enforcement action by the Medicare Fraud Strike Force.  As part of the national health care fraud takedown, the government charged 412 defendants with approximately $1.3 billion in alleged fraud. In addition to these charges, HHS Office of Inspector General (“OIG”) is in the process of excluding 295 health care providers from participating in federal health care programs.

Continue Reading DOJ and OIG Announce Largest Ever National Health Care Fraud Takedown; Focus on Opioids

Whistleblowers remain a steady source of False Claim Act (FCA) suits against health care and life science companies each year.  Join our upcoming webinar – “Qui Tam Relators: What You Need to Know” on July 12 at 1pm ET. Colleagues in our Health Care Enforcement Defense Practice Group will help companies better understand how to deal with FCA cases, which result in billions of dollars of recovery for the government each year.  Hope Foster, Larry Freedman, Karen Lovitch and Ellyn Sternfield will share insights to the relator process, help companies understand how to react if it is named in a whistleblower suit, and provide tips for how to prevent them.

Register now!

Last week, in a case being watched locally and nationally, the Massachusetts Supreme Judicial Court (“SJC”) ruled that local government approval is not required for the operation of a private needle exchange program and that the Town of Barnstable cannot bar such a program from operating.  The ruling confirms that private needle exchange programs — an important tool in combating the spread of HIV and hepatitis C associated with injection drug use — can continue in Massachusetts as the Commonwealth copes with an ongoing opioid epidemic.   My Mintz Levin colleagues, Andrew DeVoogd and Tiffany Knapp, and I drafted an amici curiae brief in the case in support of the plaintiff’s position on behalf of approximately thirty public health organizations, healthcare providers, and payors.  Continue Reading Private Needle Exchange Programs Do Not Require Local Approval: Massachusetts Supreme Judicial Court Weighs In

Earlier this week, my colleagues Bruce Sokler, Robert Kidwell, Dionne Lomax, and Farrah Short published an alert about the federal district court for the Eastern District of Michigan’s recent decision to deny both the government’s and defendant hospital’s respective motions for summary judgment in a suit filed by the Department of Justice and the Michigan Attorney General in 2015 against W.A. Foote Memorial Hospital, d/b/a Allegiance Health (“Allegiance”), Hillsdale Community Health Center (“HCHC”), Community Health Center of Branch County (“Branch”), and ProMedica Health System, Inc. (“ProMedica”).  In this case, the government alleged that HCHC orchestrated agreements among the hospitals not to advertise or otherwise market in each other’s territories for competing health care services in violation of the Sherman Act.  (You can read Dionne’s previous alert on the Allegiance complaint here.)  HCHC, Branch and ProMedica have each settled, leaving Allegiance as the sole defendant. Continue Reading Antitrust Suit Against Michigan Hospital Moves Forward After Federal District Court Denies Both Sides’ Motions for Summary Judgment