Earlier this month the Northern District of California unsealed a criminal complaint filed against the president of a medical technology company, charging him with one count of conspiracy to commit healthcare fraud and one count of securities fraud. This case is one of the Department of Justice’s (DOJ) first notable healthcare fraud prosecutions related to the COVID-19 pandemic and is the government’s first COVID-19-related prosecution for securities fraud.

Arrayit Corporation, a California-based medical technology company providing allergy testing, purported to use a “microarray technology,” which the company likened to the headline-making Theranos nanotainer technology, to test finger-prick drops of blood placed on a paper card and mailed to Arrayit’s laboratory. Defendant and company President Mark Schena describes himself as the “Father of Microarray Technology,” and Arrayit touted through social media that its microarray testing can use a drop of blood 250,000 times smaller than that used by Theranos.


Continue Reading DOJ Brings COVID-19-Related Fraud Charges Against Tech Company President

As developments related to COVID-19 continue to unfold, Bass, Berry & Sims attorneys are monitoring the situation and providing guidance through a series of video chats entitled, “COVID-19 Compliance Conversations.”

In this episode, Lindsey Fetzer and John Kelly provide a brief overview of compliance considerations related to conducting internal investigations remotely. Watch the video

Despite the mounting pressures on healthcare entities related to the COVID-19 (coronavirus) pandemic and recent announcements of regulatory waivers and flexibility in particular areas, regulators are still showing interest in the enforcement of federal requirements for life safety and emergency and infectious disease control preparedness for long-term care facilities.

OIG Medicaid Nursing Home Life Safety and Emergency Preparedness Reviews

On March 23, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) updated its Work Plan in response to the COVID-19 pandemic. Please see this post for more information about all of the OIG Work Plan updates. One of the areas that the OIG Office of Audit Services will focus on is Medicaid Nursing Home Life Safety and Emergency Preparedness Reviews.

OIG’s rationale for focusing on this is, in part, because the patient population in long-term care (LTC) facilities is especially vulnerable to COVID-19 and other disease outbreaks. The focus of the audit is LTC facilities’ compliance with federal requirements for life safety and emergency preparedness, as well as 2019 Centers for Medicare & Medicaid Services (CMS) expanded guidance on emerging infectious disease control.


Continue Reading Increased Oversight of Long-Term Care Facilities Related to COVID-19

The financial relief programs enacted by the Coronavirus Aid, Relief, and Economic Security (CARES) Act stand ready to provide crucial financial support to people and businesses impacted by the novel coronavirus (COVID-19) pandemic and the resulting economic downturn.   These new federal programs recognize the scale of the challenges presented by the COVID-19 outbreak.

While decisions made by companies seeking CARES Act or similar relief may not be scrutinized today, we are likely to see a wave of COVD-19-related criminal and civil enforcement actions in the coming months and years.  Impacted individuals and businesses should remember that the urgent need for relief does not eliminate the importance of compliance or the likelihood of significant regulatory oversight in the future.

More specifically, applicants for CARES Act relief must certify or attest to certain facts relevant to their eligibility to participate in the CARES Act’s various programs.  Because false certifications or attestations potentially expose an applicant to liability under the federal False Claims Act (FCA), it is critical that impacted individuals and entities take reasonable steps to ensure the accuracy of information and certifications contained in any applications for federal aid.


Continue Reading The CARES Act and Risk of FCA Exposure

As the impact of the COVID-19 pandemic continues to spread, the federal government is preparing to take unprecedented action to curb its effects on the nation’s health and economy by freeing up federal dollars for private businesses, manufacturers and healthcare entities of all types. But, those receiving these dollars, directly or indirectly, should continue to monitor updates to and maintain compliance with all applicable laws and regulations as this unprecedented economic response comes with heightened scrutiny and potential enforcement and regulatory risk.

DOJ Prioritizes COVID-19 Wrongdoing

On March 16, the United States Attorney General issued a memorandum to all U.S. Attorneys prioritizing the detection, investigation and prosecution of wrongdoing “related to the current pandemic.”  Attorney General Barr also issued a press release on March 20 urging the public to report suspected fraud schemes related to COVID-19. Among the schemes, Attorney General Barr encouraged the public to report were any medical providers “fraudulently bill[ing]” tests and procedures.


Continue Reading COVID-19 and the False Claims Act

On March 23, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) updated its Work Plan in response to the COVID-19 pandemic.  The OIG Work Plan sets forth planned or ongoing agency evaluations, audits and inspections.

The March 2020 updates to OIG’s Work Plan related to COVID-19 include the following:

1. COVID-19 Hospital Response. As hospitals face a surge in patients due to the COVID-19 pandemic, OIG recognizes its role in helping hospitals effectively manage this public health emergency.  OIG’s Office of Evaluation and Inspections will conduct a study to gain insight from hospital administrators on hospital needs and concerns regarding diagnosing and treating COVID-19 patients and other emergency preparedness and response issues, including the availability of personal protective equipment (PPE) for hospital staff.  The study will involve interviews of hospital administrators from approximately 400 hospitals of various types, sizes and locations across the country, including rural and critical access hospitals. HHS operating and staff divisions will use the study results to tailor their support of hospitals facing the COVID-19 pandemic.


Continue Reading HHS OIG Releases Five Work Plan Updates Related to COVID-19

As the impact of the COVID-19 pandemic continues to spread, the federal government is preparing to take unprecedented action to curb its effects on the nation’s health and economy by freeing up federal dollars for private businesses, manufacturers, and healthcare entities of all types. But, those receiving these dollars, directly or indirectly, should continue to