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

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

Mintz Levin’s Health Care Enforcement Defense Group recently published its most recent Health Care Qui Tam Update. This Update analyzes the 47 health care-related qui tam cases unsealed in August and September 2017.  Highlights from this Update include:

  • a relatively high rate of intervention;
  • cases filed in 30 different courts;
  • cases brought against a variety of different health care providers;
  • almost half of the cases filed by current or former employees; and
  • faster times for unsealing cases.

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

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

In both civil and criminal enforcement proceedings, 2017 was perhaps most notable for the cases brought against individual health care providers and small physician practice owners.  Among the factors that may have resulted in the uptick in cases against individuals are the Yates Memo issued in late 2015, improved and increased reliance on sophisticated data analytics, and the aggressive focus on opioid addiction and its causes. Continue Reading Health Care Enforcement Review and 2018 Outlook: Criminal and Civil Enforcement Trends

Like prior years, 2017 saw large government recoveries and a high volume of False Claims Act (“FCA”) cases, which remain the government’s primary health care enforcement tool. The Department of Justice (“DOJ”) reported on December 21, 2017 that it obtained $3.7 billion in FCA settlements and judgments during the fiscal year (“FY”) ending September 30, 2017, down from $4.7 billion in FY 2016. Federal recoveries from the health care industry (including drug companies, hospitals, pharmacies, laboratories, and physicians), however, remained consistent:  $2.4 billion in FY 2017 compared to $2.5 billion in FY 2016.

DOJ also reported that relators filed 669 qui tam FCA lawsuits last year, an average of more than 12 new cases every week. Among this high volume of qui tam FCA cases, relators asserted myriad theories of FCA liability against many different types of health care providers and suppliers.

In 2017, courts issued numerous decisions interpreting the legal standards under the FCA and assessing the viability of a multitude of FCA liability theories. These decisions will affect the prosecution and defense of FCA cases for years to come. In particular, district and appellate courts grappled with the Supreme Court’s 2016 decision in Universal Health Servs., Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016) (“Escobar”). Given the large volume of decisions under Escobar, we will discuss the application of that decision in tomorrow’s post. Continue Reading Health Care Enforcement Year in Review and 2018 Outlook: Major Case Law Developments

The volume of health care–related qui tam litigation under the False Claims Act (FCA) remained robust in 2017.  Based on our review of the data in Mintz Levin’s Health Care Qui Tam Database, we identified over 150 qui tam lawsuits that were unsealed in the twelve months ended November 30, 2017.  This post, which is the first in our Health Care Enforcement Review and 2018 Outlook series, discusses a number of interesting trends. Continue Reading Health Care Enforcement Year in Review and 2018 Outlook: Trends In Health Care False Claims Act Cases

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