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!

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

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

While 2016 marked one of the least productive years in the history of Congress, the same cannot be said of health care enforcement and regulatory agencies.  Perhaps motivated by the impending change in administration, these agencies promulgated a number of notable regulations in 2016, including:

  • A Department of Justice (DOJ) Interim Final Rule that significantly increases penalties under the False Claims Act (FCA), making already high stakes litigation even higher.
  • An Interim Final Rule from the Office of Inspector General for the U.S. Department of Health and Human Services (OIG) and other agencies increasing civil penalties for violations of various statutes and regulations, including the Civil Monetary Penalties Law (CMPL) and its implementing regulations.
  • A Final Rule that addresses the OIG’s expanded authority under the CMPL.
  • A long-awaited Final Rule from the Center for Medicare & Medicaid Services (CMS) concerning the “60 Day Rule” for returning overpayments.
  • A Final Rule from the OIG that amends the safe harbors under the federal Anti-Kickback Statute (AKS) and adds exceptions under the CMPL’s beneficiary inducement prohibition.

Below we discuss the highlights of each rule and how we expect each to impact the enforcement environment in 2017 and beyond. Continue Reading Health Care Enforcement Review and 2017 Outlook: Significant Regulatory Developments

Mintz Levin’s Health Care Enforcement Defense Group published its most recent Health Care Qui Tam Update on August 4, 2016. This Update covers 31 health care-related False Claims Act cases that have been unsealed since the last Health Care Qui Tam Update.

The Update takes an in-depth look at three noteworthy cases and analyzes the trends observed in recently unsealed cases:

  • A substantial majority of the unsealed cases had been under seal for periods well in excess of the required statutory period. Of the 31 complaints, 28 were filed before 2015, with three unsealed complaints dating back to 2010. Of the remaining complaints, four were filed in 2012, eight in 2013, 12 in 2014 and three in 2015. As these cases illustrate, lengthy extensions of the seal on qui tam actions continue to be routine.
  • The cases identified were filed in federal district courts in 18 states, including multiple cases in California (3), New York (4), Florida (4), Kentucky (2), Massachusetts (2), Ohio (2), and Pennsylvania (3).
  • The federal government declined to intervene, or elected not to intervene at this time, in 23 of the 31 cases. The federal government intervened, in whole or in part, in eight cases.
  • Nature of the Claims
    • 15 of the recently unsealed cases involved both state and federal claims.
    • Nine involved allegations of unlawful kickbacks. Of these nine, five also alleged violations of the Stark Law.
    • Claims for relief under state or federal anti-whistleblower retaliation provisions appeared in six of the 31 recently unsealed cases.
  • In nearly two-thirds of the unsealed cases (20 of 31), relators were current or former employees of the defendant. In two cases, the relator’s relationship to the defendant was not revealed by the unsealed filings.

The full Update is available here.

Last month, we reported on a Massachusetts federal court jury’s decision to acquit the former CEO of Warner Chilcott in one of the first prosecutions of a health care executive following the Department of Justice’s (“DOJ”) Yates Memo.  Last week, another Massachusetts federal court jury acquitted two more former health care executives of felony charges following another closely watched post-Yates-Memo prosecution.  This time, the jury found William Facteau, the former CEO of Acclarent, and Patrick Fabian, Acclarent’s former Vice President of Sales, not guilty of 14 counts of felony fraud related to Acclarent’s off-label promotion of a medical device (although the jury did find them guilty of related misdemeanor charges). Continue Reading Another Jury Acquits in One of the First Few Prosecutions of Health Care Executives Following DOJ’s Yates Memo

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.

SupremeCourt_103670531A unanimous Supreme Court issued its long-awaited and closely watched decision today on the scope of the False Claims Act (“FCA”), and the Court affirmed the FCA’s long reach. Universal Health Services, Inc. v. United States ex rel. Escobar et al., No 15-7.  The decision has momentous implications for health care providers and suppliers, and other entities, who seek or cause others to seek Medicare and Medicaid reimbursement.

This post summarizes today’s decision. Mintz Levin’s Health Care Enforcement Defense Group will be providing additional insight and commentary on the decision in the coming days.

Continue Reading The Supreme Court Adopts Broad Scope of False Claims Act Liability

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