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.”

Continue Reading DOJ Memos Outlining Use of Guidance Documents in Enforcement Actions

As highlighted in a previous post, the $348 million judgment against the owners and operators of skilled nursing facilities in U.S. ex rel. Ruckh v. Genoa Healthcare, LLC, made serious waves in the FCA world.  The judgment, which included a trebling of the jury’s damages verdict and fines of $5,500 for each of over 400 claims, far surpassed any settlement or judgment previously entered in a long-term care or skilled nursing case.  However, on January 11, 2018, nearly a year after entering the landmark judgment, the Middle District of Florida overturned it.  In doing so, the court reiterated some of the more stringent requirements a relator must meet in order to prevail on an FCA claim.

Continue Reading <em>Ruckh</em> Court Overturns $350 Million False Claims Act Judgment

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

Bass, Berry & Sims is pleased to announce the release of its sixth annual Healthcare Fraud and Abuse Review 2017. 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 details all healthcare-related False Claims Act settlements from last year, organized by particular sectors of the healthcare industry. In addition to reviewing all healthcare fraud-related settlements, the Review includes updates on enforcement-related litigation involving the Stark Law and Anti-Kickback Statute and looks at the continued implications from the government’s focus on enforcement efforts involving individual actors in connection with civil and criminal healthcare fraud investigations.

Continue Reading Bass, Berry & Sims Releases Healthcare Fraud and Abuse Review 2017

In U.S. ex rel. Poehling v. UnitedHealth Group, Inc., the U.S. District Court for the Central District of California partially granted UnitedHealth’s motion to dismiss the government’s FCA claims, which were based on the allegation that UnitedHealth’s attestations as to the truth and accuracy of the risk adjustment data submitted were false because the district court found that the government had failed to plead the attestations were material to the payment decision, as required by the Supreme Court’s decision in  Escobar.  The district court declined to dismiss the remaining claims, including an FCA claim added by the government after its complaint in the similar Swoben case was dismissed (which we discussed here), which alleged a violation of the reverse false claims provisions due to failure to delete invalid diagnosis codes without reference to the attestation.  The district court did grant the government leave to amend, with the second amended complaint to be filed by February 26, 2018.

Continue Reading Government Survives Dismissal of Remaining FCA Claims in Managed Care 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

Bass, Berry & Sims and the Tennessee Hospital Association recently sponsored the Nashville Healthcare Fraud Conference, a full-day seminar offering insight into fraud and abuse enforcement issues within the healthcare industry. Panel discussions were focused on providing practical tips and takeaways for preparing for, responding to and resolving a healthcare fraud investigation. A variety of topics were covered including:

  • Healthcare Fraud Year in Review: Where Do We Go From Here?
  • Effectively Handling Employment Decisions Involving Whistleblowers
  • What Every Compliance Officer Wishes the Legal Department Knew
  • Mine Your Own Data: The Role of Data in Dealing with Healthcare Fraud Issues
  • Revisiting Parallel Proceedings in Healthcare Fraud Cases
  • Keynote Presentation: A View from the U.S. Attorneys
  • Data Privacy Concerns and the Rising Occurrence of Audits
  • Addressing Fraud & Abuse Issues in Healthcare Transactions
  • In-House Counsel Perspective
  • Getting Your Healthcare Fraud Case Resolved – An Interactive Case Study

Keynote remarks were offered by the U.S. Attorneys for the Middle, Eastern and Western Districts of Tennessee. The 2017 Nashville HCF Conference Brochure and the HCF Seminar 2017_Final PowerPoint are both available online.

After years of investigation and litigation, and on the eve of a highly anticipated trial, the government abandoned its FCA case against ManorCare, the nation’s second-largest operator of skilled nursing homes and assisted living centers.  In a joint motion filed on November 8, 2017, the government announced that it would move for dismissal with prejudice of U.S. ex rel. Ribik v. HCR ManorCare Inc., No. 1:09-cv-00013 (E.D. Va.).  The move marks an unexpected victory for ManorCare and a significant defeat for the government, which was seeking to recover over $500 million in damages and fines in the case.

Continue Reading DOJ Bows Out of ManorCare FCA Case

In a recent opinion, the Seventh Circuit joined its sister circuits in holding that under the FCA, a defendant’s conduct must proximately cause injury to the government in order to incur liability for that injury.  United States v. Luce, No. 16-4093, 2017 WL 4768864 (7th Cir. Oct. 23, 2017).  This decision resolves a circuit split that arose in 1992 when the Seventh Circuit parted company with the Third Circuit—the only other circuit at that time to have addressed the issue.  At that time, the Seventh Circuit held that the FCA required only a “but-for” standard of causation, meaning that a defendant could be held liable under the FCA even if the Government’s loss was not caused directly by the defendant’s conduct so long as the government would not have suffered the loss if not for the defendant’s conduct.  In addition to the Third Circuit, the other circuits that have since addressed this issue—the Fifth, D.C., and Tenth Circuits—have held that the higher standard of “proximate causation” applies to FCA cases.
Continue Reading Seventh Circuit Resolves Circuit Split on Causation in FCA Cases

Recently, in United States ex. rel. Ibanez v. Bristol-Meyers Squibb Co., No. 16-3154 (Oct. 27, 2017), the Sixth Circuit Court of Appeals affirmed a decision by the U.S. District Court for the Southern District of Ohio to dismiss an FCA complaint brought by two relators on behalf of the government, finding that the complaint lacked the particularity required under Rule 9(b) of the Federal Rules of Civil Procedure.

Former Employees Accused Company of Improperly Promoting Medication

The qui tam action was brought by two former employees of Bristol-Meyers Squibb Co., who alleged that the company, along with co-defendant Otsuka America Pharmaceutical, Inc., had engaged in a scheme to encourage healthcare providers to prescribe the antipsychotic drug Abilify for certain unapproved or “off-label” uses and that some of the resulting prescriptions were paid for by government programs.

Continue Reading Sixth Circuit Affirms Dismissal of FCA Complaint for Lack of Rule 9(b) Particularity