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

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.

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, 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

Earlier this month, Mintz Levin’s Health Care Enforcement Defense Group published its most recent Health Care Qui Tam Update that looks at 18 health care-related qui tam cases unsealed in October and November of 2016.

The Update presents two unique cases in-depth and covers some of the trends revealed in these recently unsealed cases:

  • The cases identified were filed in federal district courts in 12 states, including California (5), New York (3), Alabama (1), Arkansas (1), Florida (1), Hawaii (1), Kansas (1), New Jersey (1), New Mexico (1), North Carolina (1), Oklahoma (1), and Pennsylvania (1).
  • The federal government declined to intervene in nine of the 18 cases. Five more cases were voluntarily dismissed before any action was taken by the government. The federal government intervened, in whole or in part, in three cases. In the two remaining cases, the government’s intervention status could not be discerned from the unsealed filings.
  • Nature of the Claims
    • Nine of the recently unsealed cases included both state and federal claims.
    • Four involved allegations of unlawful kickbacks. Of these, two also alleged violations of the Stark Law (42 U.S.C. § 1395nn).
    • Claims for relief under state or federal anti-whistleblower retaliation provisions appeared in nine of the 18 recently unsealed cases.
    • The cases remained under seal for an average of just over two years (774 days). The median number of days cases remained under seal was 573.5. United States ex rel. DiBenedetto v. Vahedi, which was heard in the U.S. District Court for the Central District of California, was under seal for the shortest amount of time, at 104 days. United States ex rel. Harmsen v. Moore County Dental Care Center, which was filed in the U.S. District Court for the Middle District of North Carolina, was under seal the longest, at 2,075 days (over five and a half years)
  • In nearly three-quarters of the unsealed cases (13 of 18), relators were current or former employees of the defendant.

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

 

In a closely watched False Claims Act (“FCA”) case, the Fourth Circuit Court of Appeals decided that the Department of Justice (“DOJ”) has an unreviewable right to object to a proposed settlement agreement between a relator and a defendant when the Government has declined to intervene in the case. United States ex rel. Michaels v. Agape Senior Community, Inc., No. 15-2145 (4th Cir. Feb 14, 2017).  In addition, as most expected, the court declined to decide the legal issue whether FCA plaintiffs may rely on statistical sampling of claims to prove FCA liability and damages, concluding that it had “improvidently granted” an interlocutory appeal of the lower court’s ruling on the use of statistical sampling.  This decision thus leaves intact the district court’s decision that rejected the relator’s proposed use of statistical sampling to prove FCA liability and damages.  The Fourth Circuit’s decision not to address the use of sampling in FCA cases leaves many open questions. Continue Reading Fourth Circuit Permits DOJ to Reject an FCA Settlement, But Punts Decision on Statistical Sampling

Back in early October, we were all transfixed by the announced Mylan settlement with the U.S. Department of Justice (DOJ) over Mylan’s alleged underpayments of Medicaid Drug Rebates for the EpiPen.  Although Mylan indicated that its $465 million settlement resolved all potential liability to government programs over EpiPen’s classification for Medicaid Drug Rebate purposes, DOJ would not confirm the specifics of the settlement and it appeared that no actual settlement documents had even been drafted. We blogged our thoughts that the “settlement”  was actually a handshake deal that had not been reduced to writing, had not been agreed to by the states, and had left the extent of any releases and future compliance to be negotiated.  And we said Congressional scrutiny would not end due to the announced settlement.

Multiple state and government officials decried the announced settlement as inadequate. Senator Grassley went so far as to schedule a Senate hearing on the settlement, but was forced to postpone it when no one from DOJ or Mylan would agree to attend and testify.

Then the election intervened, and EpiPen rebates were yesterday’s news. However, Senator Grassley, for one, is not letting go.  But at this point, his focus is more on government action, or inaction, over drug classifications.  And depending on what his inquiry reveals, it may end up hurting, not helping, any government case against Mylan, and potentially other drug manufacturers, based on classification of drugs for purposes of Medicaid Drug Rebates.

Continue Reading Grassley Continues To Press CMS on Medicaid Drug Rebate Classifications: What Will Be the Fallout?

money_388130419The civil monetary penalties for violations of myriad health care laws continue to rise. In June, we discussed the enormous increase in penalties under the federal False Claims Act (“FCA”).  Through an interim final rule, the Department of Justice nearly doubled the per-claim FCA penalty. The minimum per-claim FCA penalty increased from $5,500 to $10,781 and the maximum per-claim FCA penalty increased from $11,000 to $21,563. The FCA penalties nearly doubled because the Federal Civil Penalties Inflation Adjustment Act of 2015 (the “2015 Adjustment Act”) required federal agencies to update civil monetary penalties (“CMPs”) within their jurisdiction by August 1, 2016 to catch-up with inflation.

Because of the 2015 Adjustment Act, numerous other CMPs—in addition to the FCA—recently have increased or likely will increase. Continue Reading Penalties For Health Care Law Violations Surge