Download Annual Healthcare Fraud & Abuse ReviewBass, Berry & Sims is pleased to announce the release of its seventh annual Healthcare Fraud and Abuse Review. The Review, compiled by the firm’s Healthcare Fraud Task Force, is an in-depth and comprehensive review of enforcement settlements, court decisions and developments affecting the healthcare industry.

The Review is intended to assist healthcare providers in developing a greater understanding of the civil and criminal enforcement risks they face during a time of great uncertainty for the healthcare industry.  Without question, understanding the key developments during the prior year is an important step in implementing necessary safeguards designed to minimize enforcement risks for healthcare providers.

Our Healthcare Fraud and Abuse Review covers:

  • Healthcare fraud issues to watch in 2019
  • Noteworthy FCA settlements from 2018
  • Comprehensive coverage of significant FCA decisions
  • Analysis of key AKS and Stark settlements and litigation
  • Discussion of pharmaceutical and medical device risk areas

Click to download Healthcare Fraud and Abuse Review

In a remarkable move, the Department of Justice (DOJ) recently sought dismissal of 11 False Claims Act (FCA) cases, each of which assert that patient assistance services supplied by pharmaceutical manufacturers constitute unlawful kickbacks. The 11 complaints were brought against various pharmaceutical companies by what DOJ described as “shell companies” backed by the National Healthcare Analysis Group, a company formed for the purpose of filing FCA cases. In seeking dismissal, DOJ argued that the suits ran counter to government interests and wasted “scarce government resources.”

According to the DOJ, the 11 lawsuits involved “essentially the same theories of FCA liability” concerning “white coat marketing,” free “nurse services,” and “reimbursement support services.” Specifically, in a motion to dismiss filed on December 17, 2018, in the Eastern District of Texas, DOJ seemingly defended these manufacturer programs noting the government’s “strong interest” in ensuring that “patients have access to basic product support related to their medication, such as access to a toll-free patient-assistance line or instructions on how to properly inject or store their medication.” The government further argued that the allegations “conflict with important policy and enforcement prerogatives” of federal healthcare programs, and asserted that the relators “should not be permitted to indiscriminately advance claims…against an entire industry that would undermine common industry practices the federal government has determined are, in this particular case, appropriate and beneficial to federal healthcare programs and their beneficiaries.”

Continue Reading DOJ Moves to Dismiss 11 Patient Assistance Services FCA Cases

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

The government’s FCA enforcement efforts have continued to focus on key areas concerning the pharmaceutical and medical device industries.  In fact, drug and device manufacturers accounted for nearly half of the enforcement recoveries from the healthcare industry last year.  Manufacturers also saw enforcement agencies focus on product promotion and speaker program practices, as well as alleged violations of Current Good Manufacturing Practices (cGMP).

Continue Reading FCA Issues to Watch: Pharmaceutical and Device Developments

On April 27, 2016, DOJ announced that Pfizer and its subsidiary Wyeth, LLC, agreed to pay $784.6 million to resolve allegations that Wyeth failed to disclose to federal and state healthcare programs discounts provided to hospitals for Proton Pump Inhibitors (PPIs), as required by its Medicaid Drug Rebate Agreement. DOJ alleged that this lack of disclosure led to states overpaying millions of dollars in reimbursements for PPIs.

Under Medicaid’s Drug Rebate Program, drug manufacturers must enter into a Medicaid Drug Rebate Agreement with HHS for their prescription drugs to be reimbursed by Medicaid. These agreements require manufacturers to pay rebates for drugs purchased by Medicaid. The amounts of the rebates are based on the Average Manufacturer Price, or the average price paid by wholesalers, and the Best Price, or the lowest price paid by any purchaser. These prices must be reported to CMS on a quarterly basis.

Continue Reading Pharma Companies Pay $784.6 Million to Settle FCA Claims