Mintz Levin’s Antitrust & Federal Regulatory Practice recently published a Health Care Antitrust Alert on the DOJ Antitrust Division’s announced settlement with Henry Ford Allegiance Health (“Allegiance”). The settlement concludes nearly three years of litigation involving claims that Allegiance and rival hospitals unlawfully conspired to restrict the marketing of competing services in some South Central Michigan counties. We published an Alert when the claims were first filed in 2015. The new Alert outlines the terms of the proposed settlement agreement.
Two new DOJ policies about False Claims Act enforcement became public last week. First, DOJ’s Associate Attorney General announced a new civil enforcement policy that instructs False Claims Act litigators not to use any sub-regulatory guidance to create legal obligations. Second, we learned that DOJ’s Civil Fraud section instructed all False Claims Act litigators to consider whether declined qui tam actions should be dismissed under the Department’s authority in Section 3730(c)(2)(A) of the False Claims Act. The central theme of this policy is that dismissal of qui tam actions is warranted when it is in the federal interest to do so, and the policy clearly sets out seven such federal interests. Continue Reading Perspective on DOJ Pivot on FCA Enforcement Policy
Last week, the Department of Justice (DOJ) entered into a $34 million settlement with Mercy Hospital Springfield (“Hospital”) of Springfield, Missouri, and its affiliate Mercy Clinic (“Clinic”). The settlement resolves an allegation that the Clinic violated the Stark Law by compensating twelve Clinic physicians in a manner that took into account the volume and value of the physicians’ referrals to the Hospital’s infusion center. The U.S. contended that the defendants’ Stark Law violations caused their reimbursement claims to Medicare for infusion services to violate the False Claims Act. Continue Reading Hospital and its Clinic Agree to $34 Million Settlement to False Claims Act Allegation that Compensation to Oncologists Violated the Stark Law
In this final installment of our Health Care Enforcement Review and 2017 Outlook series, we analyze health care enforcement trends gathered from 2016 civil settlements and criminal resolutions of health care fraud and abuse cases. Behind the headlines covering enormous recoveries in 2016, several themes are apparent.
The False Claims Act continued to generate large civil settlements.
Continuing the trend from recent years, the False Claims Act (“FCA”) remained the primary civil enforcement tool against health care providers as well as pharmaceutical, life sciences, and medical device companies, predominantly driven by qui tam FCA complaints filed by relators. In fiscal year 2016, the Department of Justice obtained more than $4.7 billion in settlements and judgments from FCA cases, $2.5 billion of which it obtained from the health care industry. Continue Reading Health Care Enforcement Review and 2017 Outlook: Significant Health Care Fraud and Abuse Civil Settlements and Criminal Resolutions
Pharmaceutical industry enforcement has been one of the hottest topics in the news in the past month. Last week, Ellyn Sternfield and Rodney Whitlock were quoted by cnbc.com regarding the recent Mylan settlement:
[T]he Justice Department ‘does not have the authority to settle states’ individual drug rebate claims against Mylan, which means any potential ‘global’ settlement with the states raises a variety of issues.’ Those issues include the fact ‘Medicaid Drug Rebate settlement terms for each individual state will have to be agreed to by each individual participating state’s Attorney General and in many states, also by the State Medicaid Agency.’
For more insight from Ellyn, Theresa Carnegie, and Larry Freedman, please join us this Wednesday, October 26 at 1pm (ET) for a webinar discussing health care fraud enforcement in the pharmacy and pharmaceutical industry. In addition to covering topics related to pharmaceutical manufacturers, the webinar will cover topics related to pharmacies, pharmacy benefit managers (PBMs), and health insurers.
The webinar is approved for CLE credit in California and New York.
You can register for the webinar here.
Earlier this week, the U.S. Department of Justice (“DOJ”) and the Federal Trade Commission (“FTC”) filed an amicus brief with the Fifth Circuit stating that the Texas Medical Board’s (the “Board”) appeal was inappropriate and the Court does not have jurisdiction over the appeal. But the government did not stop there. The brief goes on to argue that if the Court does in fact find that it has jurisdiction, it should affirm the district court’s order denying the Board’s motion to dismiss and allow the case to proceed. Continue Reading Teladoc Receives Support from the Feds
Earlier today, my colleagues Tom Crane and Larry Freedman released a Health Care Enforcement Defense Advisory regarding the Supreme Court’s long-awaited, unanimous decision in Universal Health Services v. United States ex rel. Escobar (“Escobar”). As they discuss in detail, the Court ruled that under certain circumstances the theory of “implied false certification” can give rise to liability under the False Claims Act (“FCA”).
The Court explained that FCA liability can attach when (1) “the claim does not merely request payment, but also makes specific representations about the goods or services provided,” and (2) the defendant’s “failure to disclose noncompliance with material statutory, regulatory, or contractual requirements makes those representations misleading half-truths.” However, the Court also limited the scope of the FCA by imposing a “rigorous” and “demanding” standard of materiality.
For more information and a discussion on what this decision might mean for health care enforcement defense, please click here.
A popular weapon used to contain health care expenditures is the creation by payors and employers of tiered provider networks, which by differentiated co-pays attempt to steer insureds to less expensive choices. In connection with such networks, providers will often provide better pricing in order to be placed on more favorable tiers. In a new antitrust suit, the Antitrust Division of the Department of Justice (“DOJ”) and the State of North Carolina have challenged the attempt by the dominant health care system in North Carolina to use contractual anti-steering provisions to avoid being disfavored. This Alert analyzes the Government’s complaint and how this lawsuit fits into the DOJ’s views of contractual restraints of this type.
Last week the Supreme Court heard oral argument in a False Claims Act (“FCA”) case in which the Court is considering the validity of the so-called implied false certification theory. This theory attaches FCA liability when a person submits a claim for payment notwithstanding a violation of an underlying law or regulation, but without a factually false claim form. Because of the massive volume of Medicare and Medicaid regulations that a provider could potentially violate, the case is significant. More than two dozen stakeholders weighed in with amici briefs. Here we discuss some of the important questions raised in the oral argument. Continue Reading Justices Grapple with Limits of False Claims Act Liability in Implied Certification Cases
Two West Virginia hospital systems settled a lawsuit filed yesterday by the Department of Justice (“DOJ” or “Department”) alleging that they agreed to allocate territories for marketing health care services in violation of Section 1 of the Sherman Act. The DOJ alleged that Charleston Area Medical Center (“CAMC”) and St. Mary’s Medical Center (“St. Mary’s”) agreed not to advertise in each other’s geographic territories, which the Department said deprived customers of useful information about competing health care providers. U.S. v. CAMC, Case No. 2:16-cv-03664 (S.D. W.VA. Apr. 14, 2016).
Certain types of agreements between competitors (e.g., market allocation, price fixing) are strictly prohibited under Section 1 of the Sherman Act. These types of agreements are considered per se illegal and are presumed as harmful because they deprive consumers of the benefits of competition and provide no offsetting benefit to consumers. This case is a reminder that the antitrust authorities can, and do, challenge market allocation arrangements and other naked restraints of trade that violate Section 1 of the Sherman Act. Continue Reading Hospitals Settle DOJ Suit Alleging Illegal Division of Marketing Territories