Bass, Berry & Sims attorney Taylor Chenery discussed the implications of a recent court ruling demonstrating how a court should analyze multiple different types of alleged claims under the False Claim Act at the motion to dismiss phase of the case. The case involves Boston Heart Diagnostics Corp., who is facing allegations from a former board member that the company paid illegal kickbacks for lab test referrals.

“The court here really confirms that a complaint has to specifically plead knowledge with respect to each alleged fraud scheme or theory of liability,” said Taylor.

The full article, “Boston Heart Lab Group Stuck in Medicare Fraud Case,” was published by Bloomberg Law on September 13, 2018, and is available online (subscription required).

On August 24, 2018, the Ninth Circuit addressed the Supreme Court’s decision in Universal Health Services, Inc. v. U.S. ex rel. Escobar, holding that Escobar sets forth the exclusive test for establishing FCA liability under the theory of implied false certification.  In that case, U.S. ex rel. Rose v. Stephens Institute, the Ninth Circuit also grappled with Escobar’s materiality requirement, providing further guidance on how the past government action factor of the materiality analysis should be applied.

Continue Reading Ninth Circuit Holds that <em>Escobar</em> Set Forth Exclusive Conditions for Implied Certification Liability

On August 2, 2018, DOJ announced that Detroit-based Beaumont Health would pay $84 million to settle claims that between August 31, 2004, and January 31, 2012, its arrangements with eight physicians violated the Anti-Kickback Statute (AKS) and the Stark Law by providing improper remuneration in the form of free or below-market value office space and employees and providing them with compensation in excess of fair market value.  The settlement agreement also settles claims that from 2006 to 2012, Beaumont misrepresented that one of its CT radiology centers qualified as an outpatient department of the hospital.  As part of the settlement, Beaumont is entering into a five-year Corporate Integrity Agreement, during which time its referral arrangements will be reviewed by an independent review organization.

Continue Reading Detroit Health System Pays $84 Million to Settle AKS/Stark Claims

Bass, Berry & Sims attorney Taylor Chenery provided insight in a Bloomberg article on the effect that a Department of Justice (DOJ) Memorandum is having on healthcare fraud enforcement actions and corresponding defense strategies. The Brand Memo, named after then-Associate Attorney General Rachel Brand, was issued by the DOJ in January 2018 and limits the use of guidance documents in civil enforcement actions and prevents DOJ attorneys from using “informal agency guidance as binding law.”

Continue Reading Impact of DOJ Memo on Government Enforcement Actions

Following the recent high-stakes trial in U.S. ex rel. Ruckh v. Salus Rehabilitation, LLC, a federal district court overturned the $350 million verdict handed down against the owners and operators of 53 skilled nursing facilities who were accused of “upcoding” patient Resource Utilization Group scores, “ramping up” treatment during assessment periods and failing to maintain comprehensive plans of care for their patients.

As set out in a previous post, in overturning the verdict, the district court held that the relator failed to offer sufficient evidence at trial to satisfy the “rigorous and demanding” requirements of materiality and scienter as set forth in the Supreme Court’s landmark decision in Universal Health Services, Inc. v. U.S. ex rel. Escobar.

Continue Reading DOJ Stakes Out its Position on <em>Escobar</em> and Post-Payment Conduct in the Wake of <em>Ruckh</em>

The Ninth Circuit recently revived a False Claims Act (FCA) suit against Medicare Advantage Organizations (MAOs) related to risk adjustment payments for Medicare Advantage plans in U.S. ex rel. Silingo v. WellPoint Inc. et al.  As previously discussed in this blog post, MAOs provide Medicare benefits under a capitated payment system, whereby government reimbursement is based on an individual’s risk adjustment data.  The Centers for Medicare and Medicaid Services (CMS) increase monthly payments to MAOs when an individual’s medical diagnoses support a higher level of risk or cost of care.  Recently, both relators and the government in a number of cases have challenged the validity of diagnostic patient information utilized to support risk adjustment data, as discussed here and here.

Continue Reading Ninth Circuit Reaffirms Group Pleading Standard in FCA Cases

Bass, Berry & Sims attorney Taylor Chenery commented on a decision from a federal district court in Pennsylvania allowing a whistleblower’s case to proceed and rejecting the defendant’s argument that the claims at issue were barred because the allegations were previously publicly disclosed. The case involves False Claims Act (FCA) allegations against Medtronic Inc. that the company provided improper kickbacks to healthcare providers to encourage them to prescribe Medtronic devices.

Continue Reading Public Disclosure Bar Analysis in False Claims Act Case

Bass, Berry & Sims attorney Brian Roark answered several questions about healthcare fraud enforcement trends in 2018 for the High Stakes blog. As a follow-up to the release of the firm’s Healthcare Fraud and Abuse Review 2017, Brian provided insights on the following questions:

  • Despite deep partisan divides on virtually every other healthcare issue, bipartisan support for aggressive healthcare fraud enforcement remains constant. What factors explain that?
  • We have heard a lot in the news about the Trump administration’s push to simplify the regulatory environment for business. Do you see evidence of that in healthcare?

Continue Reading Answers to Questions about the Healthcare Fraud Landscape in 2018

Jeff Gibson co-authored an article for the American Bar Association (ABA) outlining some of the tools a company may use in response to a False Claims Act (FCA) investigation. Jeff co-authored the article with Greg Russo, managing director at Berkeley Research Group, for the ABA’s Health Law Section. As the authors point out, the government has been very successful in recent years in pursuing allegations against healthcare companies accused of submitting false claims under the FCA.

Continue Reading Jeff Gibson Outlines Investigative Tools in FCA Cases

Matt Curley Provides Insight on Supreme Court's Refusal to Weigh In on Pleading of FCA SuitsBass, Berry & Sims attorney Matt Curley provided insight to Law360 for an article analyzing the Supreme Court’s decision to deny certiorari concerning a case that may have addressed the discrepancies surrounding how False Claims Act (FCA) suits are pleaded. There is currently a split within the federal appellate courts regarding how the heightened pleading requirements of Rule 9(b) should be applied to FCA claims.

Continue Reading Matt Curley Provides Insight on Supreme Court’s Refusal to Weigh In on Pleading of FCA Suits