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

Much like the rest of the health care world, we have been following the AseraCare case since May of last year when the Alabama federal district court granted AseraCare’s motion to bifurcate its False Claims Act (FCA) trial into Phase I that would address “falsity” and Phase II that would address “knowledge” and other FCA elements.  In October, the jury sided with the Department of Justice (DOJ) and qui tam relators in Phase I and found that Medicare claims submitted by the provider of hospice and palliative care services for 104 patients were objectively false.  Yesterday, the district court granted summary judgment in favor of AseraCare on the basis that the government’s proof on the falsity element fails as a matter of law.  The court held that if “all that exists is a difference of [medical] opinion,” there can be no “falsity” under the FCA.

In this case, relators (and DOJ in intervention) accused AseraCare of overbilling Medicare for hospice services by hiding information from physicians in order to obtain certifications of hospice eligibility from those physicians for patients who were not terminally ill.  To establish that AseraCare had falsely certified patients as eligible for hospice care, the court found that DOJ relied upon the opinion of a single medical expert who reviewed the patient files and determined that those records did not support the certifications at issue. Continue Reading Judge Sides with AseraCare, Grants Summary Judgment in $200 Million FCA Case

Last week, a jury in Alabama federal court sided with the Department of Justice (DOJ) and qui tam relators in the first part of a False Claims Act (FCA) case against AseraCare Inc., a provider of hospice and palliative care services, and found that claims submitted by AseraCare for 104 patients were objectively false.

In this case, relators (and DOJ in intervention) accused AseraCare of overbilling Medicare for hospice services by hiding information from physicians in order to obtain certifications of hospice eligibility for patients who were not terminally ill. DOJ used statistical sampling to arrive at a damages figure of more than $200 million by taking a sample of 124 patients from a pool of 2,181 patients, looking at payments in the sample, extrapolating those payments to a larger universe of claims and then tripling the amount (as treble damages are allowed under the FCA). Continue Reading Jury Sides with DOJ in First Phase of FCA Statistical Sampling Trial