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.
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
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
Earlier this week, Mintz Levin’s Health Care Enforcement Defense Group published its most recent Health Care Qui Tam Update. This Update covers 34 health care-related qui tam cases that were unsealed in July 2017.
Here are some of the highlights:
– Of the 34 cases unsealed in July 2017, the government intervened (in whole or in part) in six cases and declined to intervene in 28.
– These 34 unsealed cases were filed in 21 different courts, including:
- Five in the Southern District of Ohio;
- Three in the District of Arizona; and
- Three in the Western District of Virginia.
Earlier this month, Mintz Levin’s Health Care Enforcement Defense Group published its most recent Health Care Qui Tam Update that looks at 23 health care-related qui tam cases unsealed in June 2017. The Update provides an in-depth analysis of six cases in which the government intervened, and discusses why these cases are notable in the health care industry.
The Update also provides a summary of the trends revealed in these recently unsealed cases:
- The cases identified were filed in federal district courts in 18 states, including four filed in the active Middle District of Florida.
- Of the cases identified, the federal government intervened, in whole or in part, in eight cases and declined to intervene in 13. There were two cases in which the intervention status could not be determined from the case docket.
- The entities named in the qui tam actions included outpatient medical providers, laboratory testing companies, inpatient hospitals, and medical supply companies.
- In all but three cases, the relators were current or former employees of the defendants.
- Once again, there were long delays in unsealing these cases, with an average time under seal of just over two years and four months. And one case had been under seal for almost nine years.
Click HERE for the full Update and to find our key takeaways from the cases discussed.
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.
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