Health Care Enforcement & Investigations

Disclosing known or suspected fraud to regulators can have its benefits.  As reported in a previous post, the Department of Justice (DOJ) issued policy guidance in 2019 on providing credit in False Claims Act (FCA) settlements to corporations for “disclosure, cooperation, and remediation” (the Policy Guidance).  Since then, the industry has been watching to see how  DOJ implements this Policy Guidance. 

Two settlements announced earlier this month seem to demonstrate that DOJ is applying the Policy Guidance in resolving FCA cases.  Although the facts of these two settlements differ significantly, they highlight the benefits of self-disclosure, cooperation with the government in its investigation, and proactive efforts to remediate non-compliance.

Last week, the Department of Justice (DOJ) announced another significant takedown that it described as “build[ing] on the success of the May 2021 COVID-19 Enforcement Action.”  As part of this enforcement effort, criminal charges were announced against 21 defendants across the country for their alleged involvement in various COVID-19 related fraud schemes that resulted in over $149 million in “COVID-19 related false billings to federal programs and theft from federally-funded pandemic assistance programs.” 

The Office of Inspector General for the Department of Health and Human Services (OIG) recently issued another favorable Advisory Opinion on patient incentives (e.g. gift cards or cash equivalents) given as part of patients’ treatment plans. Though the OIG reiterated its concern that cash and cash equivalents given to patients can present substantial fraud and abuse risks, the OIG concluded that the arrangement presented a minimal level of risk.

Health care providers, health information networks, health information exchanges, and health IT developers of certified health IT will want to take note of the information blocking claim submission trends recently published by the Office of the National Coordinator for Health Information Technology (ONC).

In our annual webinar, Mintz’s Health Care Enforcement Defense team reviewed the key health care fraud enforcement developments and trends from 2021, assessed their likely impact in 2022, and provided recommendations to avoid government scrutiny.

In our annual Health Care Enforcement Year in Review & Outlook report, we examine the data and explore health care enforcement trends and likely targets of government scrutiny for 2022 and beyond.

The Department of Justice announced in a February 1, 2022 press release (Press Release) that it obtained more than $5.6 billion in settlements and judgments from civil cases involving fraud and false claims in the fiscal year ending September 30, 2021 (FY2021) – the second largest annual total recovery in False Claims Act (FCA) history.

In a decision issued late last week, the First Circuit has adopted a deferential standard for review of government decisions to seek dismissal of whistleblower lawsuits brought under the False Claims Act (FCA). The court held that so long as the government explains its decision and provides the whistleblower with an opportunity to respond, the government’s motion must be granted absent evidence of collusion or unconstitutionality. This decision deepens a circuit split on the applicable standard under the FCA when the whistleblower objects to a government motion for dismissal.

On January 19, 2022, the Office of Inspector General for the Department of Health and Human Services (OIG) issued a favorable Advisory Opinion regarding an online retailer’s proposal to make its discount programs available to Medicaid beneficiaries. Currently, lower-income individuals are eligible for the retailer’s discount programs based on their enrollment in a number of assistance programs (e.g. Supplemental Security Income, Supplemental Nutrition Assistance Program), and the retailer proposes Medicaid enrollment as another category of eligibility.

While the Office of the National Coordinator for Health Information Technology (ONC) issued the 21st Century Cures Act; Interoperability, Information Blocking, and the ONC Health IT Certification Program (Information Blocking Final Rule) back in May 2020, many entities are still parsing out compliance strategies and seeking additional regulatory guidance to understand how the rule will be enforced. Broadly-speaking, information blocking is a practice that is likely to interfere with, prevent, or discourage access, exchange, or use of electronic health information (EHI). For example, a health system might require patient written consent before sharing the patient’s EHI with unaffiliated providers. Another example of information blocking is that a health IT developer might charge a fee to a health care provider to perform an export of EHI so that the provider can switch to a different health IT platform.

Over the past year, the demand for health care via telehealth has continued to skyrocket as a result of the COVID-19 pandemic and the public’s increased comfort with obtaining health care goods and services virtually. Join Ellen Janos, Karen Lovitch, Kate Stewart and Alex Hecht as they demystify the current status of laws and regulations, untangle the web of legislation before Congress related to the expansion of telehealth services, discuss recent enforcement activity, and look ahead to trends we see on the horizon.  

On November 22, 2021, the Office of Inspector General for the Department of Health and Human Services (OIG) posted a negative Advisory Opinion regarding a proposed joint venture (JV) for the provision of therapy services (Proposed Arrangement) between an existing therapy services provider (Therapy Services Provider) and the owner of long-term care facilities (LTC Owner). This Advisory Opinion is yet another example of OIG guidance reiterating its view that joint ventures formed between entities in the position to provide health care items or services and entities in the position to refer business can present risk under the federal Anti-Kickback Statute (AKS).

For the first time since April 2013, the Department of Health and Human Services’ Office of Inspector General (OIG) revised the Provider Self-Disclosure Protocol (SDP) on November 8, 2021. The SDP allows providers and other entities to voluntarily disclose and resolve instances of potential fraud involving federal health care programs, including potential overpayments and Anti-Kickback Statute (AKS) violations. The OIG originally published the SDP in 1998, and has since modified the SDP several times generally to make the SDP a more appealing option for providers and other health care entities.

The U.S. Department of Justice (DOJ) recently announced its latest national enforcement action related to health care fraud (National Enforcement Action) in which DOJ filed criminal charges against 142 defendants. The National Enforcement Action, which alleges losses of $1.4 billion due to false or fraudulent billings, follows similar DOJ “take downs” over the last several years in that it focuses on telemedicine providers and the opioid crisis. This post provides five takeaways from the National Enforcement Action.

On September 15, 2021, the Office of Inspector General for the Department of Health and Human Services (OIG) issued a favorable Advisory Opinion regarding a hospital’s proposal to implement a program through which patients who experience complications after specific joint replacement procedures can receive free items and services to treat the complications. The OIG likened the program to a warranty for joint replacement procedures.

Physician judgment and medical necessity increasingly are a focus of fraud and abuse enforcement actions, with statistical analysis of procedure volumes used to flag potential cases. Last week, the Atlantic published this recent article discussing a significant 2018 decision of the Tenth Circuit Court of Appeals in United States ex rel. Polukoff v. St. Mark’s Hospital, et al., No. 17-4014 (10th Cir. Jul. 9, 2018), in which the court held that a physician’s medical judgment concerning medical necessity of a particular treatment for two specific cardiac conditions could be “false or fraudulent” under the federal False Claims Act (FCA). Our colleague, Brian Dunphy, covered the 2018 decision on this blog here. The Tenth Circuit ultimately held that a “doctor’s certification to the government that a procedure is ‘reasonable and necessary’ is ‘false’ under the FCA if the procedure was not reasonable and necessary under the government’s definition of the phrase.”

Earlier this week, a bipartisan group of Senators led by Senator Chuck Grassley (R-Iowa) introduced two pieces of proposed legislation, one of which would amend the existing False Claims Act (FCA) and the other of which would amend the Program Fraud Civil Remedies Act of 1986 (the PFCRA) to create the Administrative False Claims Act of 2021 (AFCA). The AFCA would focus on smaller claims than does the FCA. Senator Grassley described the bills as being intended to “help recoup even more money by clarifying confusion after the Escobar case” and as being needed more than ever “to fight the significant amounts of fraud we are already seeing” related to the trillions of dollars Congress has appropriated for COVID relief.

During a recent panel discussion hosted virtually by the American Bar Association, attorneys from the Department of Justice (DOJ) and certain U.S. Attorneys’ Offices known for health care fraud enforcement provided valuable insight into key areas of health care fraud enforcement, including opioid-related enforcement, kickbacks to providers involving speaker programs, and allegations involving electronic medical records (EMR) vendors.  The panel also addressed the role of private equity funds as owners and operators of companies under investigation and provided observations and recommendations about effective compliance programs and their role in resolving health care fraud matters.

In its first exercise of a newly granted authority, the Federal Trade Commission (FTC or the Commission) on April 15, 2021 charged a St. Louis-based chiropractor and his company (the Defendants) with violating the COVID-19 Consumer Protection Act (the COVID-19 Act) and the Federal Trade Commission Act (FTC Act).  The Commission’s allegations focus on the deceptive marketing of products containing Vitamin D and Zinc as being scientifically proven to treat or prevent COVID-19 and as being equally as effective as or more effective than currently available COVID-19 vaccines.

On Friday, March 26, 2021, the Department of Justice (DOJ) announced an update on its efforts to combat COVID-19 related fraud.  Since Congress first responded to the coronavirus pandemic by passing $2.2 trillion in relief through the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020, DOJ has pursued civil and criminal actions primarily targeting (1) fraudulent COVID-19 related tests or treatments, and (2) abuse of the CARES Act’s popular Paycheck Protection Program (PPP).  Friday’s announcement revealed that DOJ is also ramping up its efforts to prosecute fraud on the CARES Act’s Economic Injury Disaster Loan (EIDL) and Unemployment Insurance (UI) initiatives.