I recently discussed the trends related to False Claims Act (FCA) settlements in the home health sector, as revealed in the Healthcare Fraud & Abuse Settlements Database which we launched earlier this year. The database was part of the comprehensive Healthcare Fraud & Abuse Resource Center that provides an overview of FCA enforcement settlements, court decisions, updates involving the Stark Law and Anti-Kickback Statute, and other developments affecting the healthcare industry.

“We wanted to create a database of False Claims Act settlements to allow providers to have easy access to information, to see the cases that the government or regulators have resolved in the health care fraud space,” I told Home Health Care News. “This is the first publicly available database of this type.”

According to the information in the database, home health providers have paid at least $422.6 million since 2012 to settle FCA allegations. This represents 51 different cases over the time period from 2012-2020.


Continue Reading False Claims Act Cases in Home Health Sector

A common feature of False Claims Act (FCA) litigation is the pursuit of liability under the FCA’s so-called “reverse” false claims provision, 31 U.S.C. § 3729(a)(1)(G).  Reverse false claims liability applies when a person or entity knowingly does either of the following:

  1. Makes, uses, or causes, to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the government.
  2. Conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the government.

The reverse false claims provision of the FCA is especially significant for healthcare providers, in part because the 2010 Affordable Care Act (ACA) (as well as associated regulations) expressly linked the knowing retention of overpayments from federal healthcare programs to reverse false claims liability under the FCA.  Specifically, the relevant statutory provision of the ACA defines the term “obligation,” as used in the FCA, to include any overpayment that is not “reported and returned” within 60 days after it is “identified,” a term courts and Centers for Medicare & Medicaid Services (CMS) have interpreted somewhat broadly.   See 42 U.S.C. § 1320a-7k(d).  Thus, by “improperly avoid[ing]” this “obligation”—i.e., knowingly or recklessly failing to return the overpayment within the ACA’s 60-day timeframe—a provider violates the FCA.

The upshot for providers is that a failure to diligently investigate and appropriately address a potential overpayment may lead to a host of problems, including whistleblower lawsuits, intrusive government scrutiny, and ultimately, FCA liability for treble damages and civil penalties.  What’s more, this may be true even in cases where the receipt of the overpayment was not itself the result of any fraudulent conduct.  Indeed, as the cases discussed below demonstrate, that risk is far from just hypothetical.


Continue Reading Provider Beware: Recent FCA Cases Emphasize the Importance of Diligently Addressing Potential Overpayments

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.


Continue Reading The Eliminating Kickbacks in Recovery Act: An Unprecedented Expansion of Anti-kickback Liability to Private-Pay Referrals?

Bass, Berry & Sims Healthcare Fraud & Abuse attorney Brian Roark provided a comment to Home Health Care News about the government’s decision not to intervene in the False Claims Act (FCA) case brought against HCR Manor Care’s hospice division, Heartland. In the case, a whistleblower accused Heartland of submitting false claims and statements to Medicare. However, as Brian points out in the article, Heartland isn’t “necessarily out of the woods yet; the government declining to intervene doesn’t mean an FCA case won’t go forward.”

Continue Reading Brian Roark Comments on Government’s Declination to Intervene in Heartland FCA Case

The Department of Justice’s recent decision to intervene in a False Claims Act case against not only a compounding pharmacy but also the private equity firm that owns a controlling stake in it, underscores the potential risks private equity firms face when operating in the highly regulated healthcare space.  On February 16, 2018, the United States filed a complaint in intervention in Medrano v. Diabetic Care Rx, LLC, Case No. 15-62617-CIV-BLOOM, alleging the compounding pharmacy, Patient Care America (“PCA”), paid illegal kickbacks to marketing firms who targeted military members and their families for prescriptions for compounded drugs the pharmacy then created not to meet individual patient needs, but rather to maximize reimbursement from Tricare, the federal military health care program.  In a somewhat unique move, the government also named as a defendant the private equity company Riordan, Lewis & Haden Inc. (“RLH”), which manages and controls PCA through a general partner.

Continue Reading DOJ Intervention in Healthcare Fraud Case Highlights Potential Risks for Private Equity Firms