The FCA continues to be the federal government’s primary civil enforcement tool for investigating allegations that healthcare providers or government contractors defrauded the federal government. In the coming weeks, we will continue to take a closer look at recent legal developments involving the FCA. This week, we examine recent court decisions that considered the question of objective falsity in connection with FCA cases based on an alleged lack of medical necessity of the healthcare services provided to beneficiaries of federal healthcare programs.

Continue Reading FCA Deeper Dive: Objective Falsity and Medical Necessity Cases

The FCA continues to be the federal government’s primary civil enforcement tool for investigating allegations that healthcare providers or government contractors defrauded the federal government. In the coming weeks, we are taking a closer look at recent legal developments involving the FCA. This week, we examine recent court decisions following Escobar that considered the express certification theory of FCA liability.

Continue Reading FCA Deeper Dive: Express Certification

In the recent past, the government has racked up a number of FCA settlements based on alleged violations of the Anti-Kickback Statute (AKS).  This focus undoubtedly will remain a high enforcement priority.

In U.S. ex rel. Williams v. Health Management Associates Inc. and U.S. v. Atlanta Medical Center, Inc., Tenet Healthcare Corporation and two of its Atlanta-area hospitals, Atlanta Medical Center and North Fulton Hospital, agreed to pay more than $513 million to resolve civil and criminal allegations of AKS and FCA violations.  Between 2000 and 2013, Atlanta Medical and North Fulton allegedly paid prenatal clinics for referring patients, many of whom were undocumented and indigent, to its labor and delivery, postnatal and infant services.  Using sham contracts, the hospitals allegedly paid the clinics for unnecessary, duplicative or substandard translation services, which in certain cases were not actually provided.  Tenet allegedly concealed the underlying purpose of the contracts from its legal counsel and violated the terms of its previously-entered CIA with HHS-OIG, which related to a 2006 settlement for $900 million to resolve allegations of fraudulent billing and AKS violations.

Continue Reading FCA Issues to Watch: Intersection of the FCA and the Anti-Kickback Statute

The FCA continues to be the federal government’s primary civil enforcement tool for investigating allegations that healthcare providers or government contractors defrauded the federal government. In the coming weeks, we will take a closer look at recent legal developments involving the FCA. This week, we examine the Supreme Court’s opinion in Escobar and its impact on the question of the FCA’s materiality requirement.

In addition to tackling the viability of the implied certification theory of liability in Escobar, the Supreme Court also held that the FCA does not restrict liability to noncompliance with express conditions of payment, stating that “[w]hether a provision is labeled a condition of payment is relevant to but not dispositive of the materiality inquiry.”  The Supreme Court explained that any concerns about fair notice or open-ended liability without such a restriction on liability can be addressed through “strict enforcement” of the FCA’s “demanding” and “rigorous” materiality requirement, as well as the FCA’s scienter requirement. 

Continue Reading FCA Deeper Dive: Escobar and Its Aftermath – Part II

U.S. ex rel. Badr v. Triple Canopy, Inc., an intervened case arising out of the Fourth Circuit, has been one of the more closely-watched recent FCA cases. Previously, the Fourth Circuit held that the government’s complaint properly alleged an FCA claim and could survive Triple Canopy’s motion to dismiss. That ruling was subsequently vacated by the Supreme Court following its decision in Universal Health Services, Inc. v. U.S. ex rel. Escobar, which we covered here and here. On May 16, 2017, the Fourth Circuit issued its opinion on remand, finding that the complaint satisfied the pleading standards set forth in Escobar and re-affirming its conclusion that the complaint adequately stated an FCA claim.

Continue Reading Fourth Circuit Re-Affirms Sufficiency of Triple Canopy Complaint

The FCA continues to be the federal government’s primary civil enforcement tool for investigating allegations that healthcare providers or government contractors defrauded the federal government. In the coming weeks, we are taking a closer look at recent legal developments involving the FCA. This week, we examine the Supreme Court’s opinion in Escobar and its impact on the theory of implied certification.

Continue Reading FCA Deeper Dive: Escobar and Its Aftermath – Part I

The government’s FCA enforcement efforts have continued to focus on key areas concerning the pharmaceutical and medical device industries.  In fact, drug and device manufacturers accounted for nearly half of the enforcement recoveries from the healthcare industry last year.  Manufacturers also saw enforcement agencies focus on product promotion and speaker program practices, as well as alleged violations of Current Good Manufacturing Practices (cGMP).

Continue Reading FCA Issues to Watch: Pharmaceutical and Device Developments

Earlier this month, DOJ filed its complaint-in-intervention alleging FCA claims in the long pending Medicare Advantage case U.S. ex rel. Swoben v. Secure Horizons.  The U.S. Court of Appeals for the Ninth Circuit revived this matter last year when it held that the design of a retrospective review to avoid discovery of unsupported diagnoses submitted for risk adjustment can give rise to FCA liability resulting from false certifications.   DOJ intervened in March 2017 only as to the UnitedHealth Group parties in the case.  DOJ had intervened previously as to the SCAN defendants, who settled their portion of the case for $322 million in August 2012.

Continue Reading DOJ Complaint Alleges One-Way Chart Review Renders Medicare Advantage Risk Adjustment Certifications False

The FCA continues to be the federal government’s primary civil enforcement tool for investigating allegations that healthcare providers or government contractors defrauded the federal government. In the coming weeks, we are taking a closer look at recent legal developments involving the FCA. This week, we examine recent court decisions considering the level of specificity required of a relator under Rule 9(b) in pleading the alleged FCA fraud scheme.

Continue Reading FCA Deeper Dive: Pleading the Alleged Fraud Scheme

Physician employment arrangements with hospitals have remained a significant area of regulatory scrutiny in recent months with the announcement of several high profile settlements and decisions in key FCA cases involving Stark and AKS-related issues.

In July 2016, DOJ announced a $17 million settlement in U.S. ex rel. Hammett v. Lexington County Health Services District.  The lawsuit resolved allegations that Lexington County Health Services District, Inc. d/b/a Lexington Medical Center (LMC) in West Columbia, South Carolina violated the Stark Law and FCA by acquiring physician practices and employing physicians on terms that were in excess of fair market value and on terms that were not commercially reasonable.

Continue Reading FCA Issues to Watch: FCA Claims Concerning Physician Compensation