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

New York State Attorney General Eric Schneiderman recently announced that his office had reached a $2.5 million settlement in a federal False Claims Act (FCA) case with Trinity HomeCare and its related entities.  The case, filed as a qui tam action in federal district court in the Eastern District of New York, alleged that Trinity’s violations of New York’s Medicaid regulations in the delivery of hemophilia drugs resulted in its submission of false claims to the New York Medicaid Program, in violation of both the federal and state FCAs.

The Trinity settlement may seem relatively insignificant, especially in comparison to other FCA cases which settled for billions, not millions, of dollars.  But the Trinity case may be more representative of the future of FCA enforcement.  Indeed, there are five current FCA trends evidenced by the Trinity case. Continue Reading Trinity Homecare Settlement: Five False Claims Trends

Written by: Ellyn L. Sternfield

Once again, a pharmacy employee has filed a qui tam involving a drug discount program, alleging that the failure of the pharmacy to use the discounted pricing as the “usual and customary” price in Medicaid and Medicare Part D billings resulted in falsely inflated claims to those programs. And once again, the qui tam case has survived a Motion to Dismiss.

In September of 2013, I blogged about qui tams based on usual and customary billings.  That blog post was prompted by a ruling in U.S. ex rel. Garbe v. K-Mart, that a qui tam Complaint alleging the chain pharmacy’s failure to use discounted pricing as the “usual and customary” price for medications in government program claims, was sufficient to pass muster under Rules 9(b) and 12(b)(6).

Pharmacy claim forms contain a required field for the pharmacy to submit its “usual and customary” price for the billed medication.  That price is often factored into the reimbursement formula for government-funded health care programs.  However, government programs each define how “usual and customary” price is determined, and when it comes to Medicaid, each state is free to define the term differently.  In some instances the term may be defined as inclusive of any discount offered (akin to a most-favored-nation clause), in other instances the term may be defined as an average charged to or paid by any payor, or in still other instances the term may be defined as the amount charged to or paid by any cash-paying customer.

Continue Reading Pharmacy Qui Tam Based On U&C Price Billing Survives Motion to Dismiss