One of the first indicators that may tip off a healthcare provider or government contractor that their organization may be the subject of a False Claims Act (FCA) investigation is contact with a government investigator.  That contact may take many forms – service of a subpoena or Civil Investigative Demand (CID), an interview of an employee, or simply a phone call by a government regulator or investigator.  How an organization responds to those earliest contacts often sets the tone for how the government investigation unfolds.

Organizations with well-developed policies and procedures addressing how the organization will respond to contacts by government regulators often have a more orderly process to guide the organization in responding to government investigations (referred to herein as a Government Response Policy).  A Government Response Policy can set a clear tone of cooperation by the organization with any appropriately authorized government inquiry, while at the same time making clear that the organization will assert all protections afforded by law in any such investigation or inquiry.  And, a well-crafted Government Response Policy also can make clear to employees that concealment, alteration or destruction of information or the making of false or misleading statements to regulators will not be tolerated.

An effective Government Response Policy depends upon educating employees regarding the types of contacts that an organization or an employee may receive from government regulators and on establishing clear points of contact and lines of communication within the organization.  Typically, the organization will establish its legal department as a central point of contact for government inquiries or investigations (and organizations without a legal department would have to think through an alternative appropriate point of contact) as the entity within the organization best suited to coordinate the organization’s response either directly or through outside counsel.  Below we provide broad principles and guidelines that should be considered in preparing an organization’s Government Response Policy.

This post contains five parts and looks at the following:

  • Responding to a subpoena or CID.
  • Responding to visits by investigators at an office/facility.
  • Responding to a search warrant.
  • Responding to an interview request.
  • Responding to inbound calls from government officials.

Continue Reading An Ounce of Prevention: Effective Corporate Policies for Dealing with Government Investigations and Inquires

Improper billing for electro-acupuncture using a “P-Stim” device (or peri-auricular stimulation device) has been the subject of two False Claims Act (FCA) settlements already in 2021, following a trend of such enforcement actions within the past year.

Each of the recent settlements, detailed further below, involve providers billing federal healthcare programs for acupuncture using P-Stim devices under HCPCS Code L8649.  Unlike P-Stim devices, though, which are attached to the ears of a patient using needles and adhesives without surgery or anesthesia, HCPCS Code L8649 applies to a product that is surgically implanted into a patient using anesthesia. Medicare, TRICARE and the Federal Employees Health Benefit Program (FEHBP) do not reimburse for acupuncture devices like P-Stim, nor do they reimburse for P-Stim as a neurostimulator or an implantation of neurostimulator electrodes.  In addition to P-Stim, the brand names for these devices include ANSiStim, E-pulse, Stivax and NeuroStim.

Notably, none of these enforcement actions originated from qui tam whistleblowers but rather were the product of affirmative government investigations by the U.S. Department of Justice, U.S. Attorneys’ Offices, the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), and CMS’s Center for Program Integrity. These settlements—coming from different jurisdictions and concerning different types of providers and practices—demonstrate the government’s ongoing, nationwide effort to investigate the improper billing of electro-acupuncture devices:

Continue Reading Improper Billing of “P-Stim” Devices is Focus of Recent FCA Settlements

As 2020 draws to a close, we take a look back at a number of the most significant False Claims Act (FCA) cases of the prior 12 months.  Although no blockbuster cases emerged, such as the Supreme Court’s 2016 decision in Escobar, there were a number of noteworthy cases that will have lasting impact on future FCA litigation.  We discuss those cases briefly below.  We expect to cover these cases and much more in our Healthcare Fraud and Abuse Review, which we will release in early 2021.

Materiality

U.S. ex rel. Janssen v. Lawrence Memorial Hospital, 949 F.3d 533 (10th Cir. 2020)

Background.  In 2016, the Supreme Court held in Escobar that whether a defendant can be held liable under the FCA for violating a statute, rule, regulation, or contract provision turns, in part, on the elements of materiality and scienter, which the Court said are “rigorous” and “demanding.”  Post-Escobar, courts have grappled with specific applications of these standards, with some courts appearing to apply them less “rigorously” than others.

Allegations.  In U.S. ex rel. Janssen v. Lawrence Memorial Hospital, the relator primarily alleged that the defendant hospital falsified patient arrival times associated with certain CMS pay-for-reporting and pay-for-performance programs.  The relator introduced proof that the hospital had knowingly falsified arrival times in patient records by recording actual arrival times on patient triage sheets but then entering later times in the medical record or delaying patient registration until after the administration of some tests.

Continue Reading Key False Claims Act Cases in 2020

Bass, Berry & Sims and the Tennessee Hospital Association hosted the Sixth Annual Nashville Healthcare Fraud Conference on December 2 and 3. Though typically an in-person event, this year’s conference moved to a virtual platform. That move allowed for the addition of Day 1 primer sessions covering the basics of the False Claims Act, principles of an effective compliance program, how to deal with whistleblowers, and recent significant settlements under the Stark Law and the Anti-Kickback Statute. The Day 2 sessions covered advanced topics ranging from a healthcare fraud and abuse year-in-review, the impact of the global pandemic on fraud enforcement from the perspective of healthcare providers and government officials, criminal healthcare fraud enforcement developments, and how to address compliance issues during a pandemic.

“Each year, we strive to put together content that we believe will greatly benefit members of the healthcare industry in gaining a deeper understanding of the fraud and abuse issues confronting them,” said Brian Roark, chair of the Bass, Berry & Sims Healthcare Fraud Task Force. “There is no question that most healthcare providers are dealing with these types of issues daily, and the conference provides a forum to explore how providers, government regulators and outside counsel view these issues.”

This year, more than 600 attendees participated in the conference from over 40 states and the District of Columbia. In addition to members of the Bass, Berry & Sims Healthcare Fraud Task Force, panelists participating in the conference included in-house attorneys and compliance professionals from Humana, Sanford Health, RWJBarnabas Health Systems, Methodist LeBonheur Healthcare, Saber Healthcare, Tenet Healthcare, Henry Ford Health System, naviHEALTH and Virtua Health, as well as several government attorneys from both the state and federal level.

Continue Reading Sixth Annual Healthcare Fraud Conference Highlights Key Risk Areas and Enforcement Developments for Healthcare Providers

Access RecordingIt is safe to say that 2020 has been nothing short of challenging for the healthcare industry, especially when it comes to maintaining data privacy and security. Among countless other areas, the impact of COVID-19 has resulted in a spike in telehealth options, creating more vulnerabilities for the security of patient data. More than ever, healthcare professionals must prioritize data security and proactively assess areas of risk within their company’s operational structure.

In this webinar available now on demand, Bass, Berry & Sims attorneys are joined by professionals in the healthcare field to discuss best practices, new enforcement updates, and COVID-19-related developments to help protect your company’s data, maintain compliance with government agencies, and respond accordingly if and when a breach occurs.

This complimentary webinar covers the following topics:

  • The Basics – Beginner HIPAA knowledge for those new to this area of work, including helpful resources and best practices.
  • Enforcement Actions – Government agency developments and updates on the current regulatory climate.
  • Pandemic Pitfalls – Impacts resulting from COVID-19 and how to spot bad actors taking advantage of vulnerabilities.

Who Should Attend?

  • In-house legal counsel.
  • Privacy officers.
  • Compliance officers.
  • C-level executives, consultants and principals in the healthcare industry.

CLE Credit

This program has been approved for General Tennessee CLE credit. Certificate of completion and other necessary application forms provided for use in other jurisdictions.

Please join us for the 6th Annual Nashville Healthcare Fraud Conference hosted by Bass, Berry & Sims and the Tennessee Hospital Association. Because we are unable to provide an in-person forum due to ongoing concerns resulting from the COVID-19 pandemic, we are converting the conference to a virtual platform.

We are excited about this year’s complimentary CLE program, which will provide the same caliber of practical advice, insight into significant fraud and abuse issues facing healthcare professionals, and thoughtful discussion from industry panelists for which this conference is known.

Additionally, for the first time, we are expanding the conference to two days with the first day focused on providing a primer, covering healthcare fraud and abuse matters for attorneys newer to the industry or practice. Topics will include conducting effective internal investigations and an overview of the False Claims Act.

The second day will follow our traditional format of providing practical tips and takeaways regarding healthcare fraud enforcement, including:

  • Our annual review of the most important healthcare fraud issues from the prior year.
  • Effective management of healthcare investigations during the COVID-19 pandemic.
  • How the COVID-19 pandemic has impacted the government’s perspective on healthcare fraud matters.
  • Implications and potential risk exposure stemming from CARES Act funding.

Click here to view the current agenda.

At the conclusion of the conference on December 3, we will be offering breakout sessions to further the dialogue on subject matters important to you. Please be on the lookout for communications regarding breakout session details.

Continue Reading [REGISTER NOW] Healthcare Fraud Conference | December 2-3, 2020

Two partnerships and infighting between relators recently produced a series of difficult questions addressed by the U.S. Court of Appeals for the Third Circuit in In re Plavix Mktg., Sales Practices & Prod. Liab. Litig. (No. II). Three individuals formed a limited liability partnership, JKJ, to bring a qui tam action against Sanofi-Aventis and Bristol-Myers Squibb, pharmaceutical companies that developed and marketed the anti-clotting drug Plavix.

After JKJ filed its qui tam complaint, however, its members had a falling out. One member left the partnership, and the two remaining members created a new partnership, also named JKJ, with a new third member. The old JKJ partnership was dissolved, and the new JKJ partnership filed an amended qui tam complaint.

The defendants moved to dismiss the amended qui tam complaint based on the False Claims Act’s (FCA) first-to-file bar. The first-to-file bar provides that “[w]hen a person brings an action under this subsection, no person other than the Government may intervene or bring a related action based on the facts underlying the pending action.” The defendants argued that filing the amended complaint violated the first-to-file bar because the new JKJ partnership was a new party to the action. Continue Reading Corporate Maneuvering Leads to Thorny First-to-File Bar Issues

In our previous article, we outlined steps companies can take now to protect themselves during later government investigations and enforcement actions related to COVID-19 relief funding. These steps include: leverage compliance resources, document the application/funding process, document how money is used, schedule an interim internal review, and respond to employee complaints. In this article we focus specifically on the health care industry and how companies can protect against inevitable government scrutiny after receiving COVID-19 relief funding.

The health care industry must be particularly vigilant about protecting against future enforcement risks because it is a highly regulated industry facing an enforcement perfect storm—fast cash, poor guidance and retrospective review. Congress allocated $175 billion to the U.S. Department of Health and Human Services (HHS) through the Coronavirus Aid, Relief and Economic Security Act Provider Relief Fund (Relief Fund). To support an industry hurt by COVID-19-related patient surges, stay-at-home driven closures and elective procedure treatment delays, HHS adopted a strategy to release relief funds quickly and perform reconciliation on the back end. As a result, HHS released what it touted as “no strings attached” relief funds through a series of general and targeted allocations each with a list of somewhat vague terms and conditions. The only other guidance available were application instructions, where applicable, and a continuously evolving set of frequently asked questions.

Of course, no government funding comes with “no strings attached.” The government inevitably will review whether recipients of HHS relief funds met the eligibility requirements and complied with the terms and conditions for using relief funds. Given that any deliberate omission, misrepresentation or falsification of information related to the HHS relief funds comes with potentially severe consequences—including but not limited to revocation of Medicare billing privileges; exclusion from federal health care programs; and/or the imposition of fines, civil damages and/or imprisonment—health care companies should consider the following steps to support their acceptance and use of the funds:

Continue Reading How Health Care Companies Can Protect Against Government Scrutiny of COVID-19 Relief Funding

This article is the first in a series addressing what companies can do now to protect themselves during later government investigations and enforcement actions related to COVID-19 relief funding. In this article, we provide general practice tips applicable to all industries. Future articles will target compliance issues related to specific areas and industries—healthcare, finance, government contracting, and labor and employment—and what companies can do to reduce the risk when accepting government aid. Don’t miss the second article in this series that discusses what companies can do now to protect themselves during later government scrutiny related to COVID-19 relief funding.

Unprecedented Funding

The government has distributed an unprecedented amount of money in response to the COVID-19 pandemic. Under the Coronavirus Aid, Relief and Economic Security (CARES) Act, for example, the government is providing over $1 trillion through loans, grants and tax credits. Companies in the healthcare and financial industries, government contractors and many other businesses have all received government help.

The government, to its credit, has moved quickly to make funding available to companies in need. As a result, many government agencies have shifted their focus to responding to the pandemic and distributing allocated funds—with all requests and distributions of money completed as quickly as possible.

Continue Reading The Government Is Here to Help—For Now: What Your Company Should Be Doing Today to Protect Against Inevitable Government Scrutiny of COVID-19 Relief Funding