The U.S. Department of Justice (DOJ) routinely encourages the subjects of False Claims Act (FCA) enforcement actions to make voluntary disclosures and fully cooperate with the government on the premise that cooperation leads to reduced liability. The DOJ recently issued guidance on the types of activities that will earn “cooperation credit.” But how much is cooperation worth, in terms of actual dollars? According to recent data and an analysis by Seton Hall Law School Professor Jacob T. Elberg, perhaps not much.

Discretion over Damages Multiplier Incentivizes Cooperation

The government’s basis for incentivizing cooperation lies primarily in its discretion in seeking damages and penalties allowable under the FCA. A defendant can be liable under the FCA for three times the amount of damages the government sustains, plus a civil penalty for each false claim. But such severe damages and penalties are not required, particularly where the government and a defendant negotiate a settlement to resolve FCA allegations without a court judgment or any finding of liability.


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In December 2018, the Department of Justice (DOJ) updated its Justice Manual to add Title 1-20.000 et seq., Limitation on Use of Guidance Documents in Litigation. This addition formalizes guidance provided in two previous internal DOJ memoranda—the Sessions Memo and the Brand Memo—each discussing limiting the use of guidance documents and advisory opinions in both criminal and civil enforcement actions.

The Sessions and Brand Memos

The Sessions Memo, authored by then-Attorney General Jeff Sessions in November 2017, prohibited the DOJ from promulgating guidance documents “that purport to create rights or obligations binding on persons or entities outside the Executive Branch[.]” It also prohibited the DOJ from creating binding standards that could then be used to determine a person or entity’s compliance with applicable federal statutes or regulations. Importantly, the memo noted that such guidance documents were not produced through a notice-and-comment rulemaking process and were not promulgated by the agency charged with the constitutional authority to do so.


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A recent piece of federal legislation intended to address the opioid crisis across the United States may have some unintended consequences. In attempting to prohibit “patient brokering” in the narrow context of addiction treatment and recovery centers, Congress may have unwittingly passed an unprecedented expansion of federal prosecutorial authority over payment arrangements between providers and referral sources for private-pay patients. For the reasons discussed in this blog post, any individual or entity who provides services relating to addiction treatment or recovery (as well as all clinical laboratories, regardless of whether they provide any addiction treatment or recovery services) should examine their arrangements with all referral sources for private-pay patients, even those who do not refer patients for addiction treatment or recovery services.

On October 24, 2018, the President signed into law the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act (the “SUPPORT Act”), as discussed here. The SUPPORT Act consolidated a number of opioid-related bills, including the Eliminating Kickbacks in Recovery Act of 2018 (EKRA), which was intended to address the problem of “patient brokering” in the context of treatment centers and sober homes.


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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.”

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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?


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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.

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In an article for Nashville Medical News, Bass, Berry & Sims attorney Taylor Chenery examined two recent Department of Justice (DOJ) memoranda that limit the use of guidance documents in civil enforcement actions. These memos may signal a change in how the government will approach enforcement efforts involving allegations of healthcare fraud and provide insight into how providers may be able to contest such allegations.

The memos – the first released in November 2017 by Attorney General Jeff Sessions and the second released in January 2018 by then-Associate Attorney General Rachel Brand – “relate to the government’s use of guidance documents — as opposed to codified statutes or regulations — to educate regulated parties and to enforce existing statutory or regulatory requirements.”


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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 continue to take a closer look at recent legal developments involving the FCA. This week, we examine judicial review of FCA settlements and recent cases considering this issue.

In U.S. ex rel. Michaels v. Agape Senior Cmty., Inc., the Fourth Circuit considered the scope of DOJ’s authority to review and ultimately veto a settlement reached by relators and the defendants.  The panel had little difficulty affirming the district court’s determination that DOJ’s veto authority in this regard is unreviewable.


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