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DOJ Issues Guidance on Cooperation Credit in FCA Settlements

May 10, 2019 | Blog | By Jane Haviland, Laurence Freedman

The U.S. Department of Justice (DOJ) issued policy guidance on May 6, 2019, about providing credit in False Claims Act (FCA) settlements to corporations for “disclosure, cooperation, and remediation." DOJ has never previously issued guidance regarding credit in FCA matters. This guidance, coupled with the passage of the Tax Cuts and Jobs Act in 2017 (which requires DOJ to specify the amount of “restitution” or “remediation” at the time of settlement), provides meaningful specificity as to what conduct constitutes disclosure, cooperation, and remediation, as well as data for evaluating whether credit is actually reflected in negotiated FCA settlements. This policy guidance is contained in the Justice Manual, Section 4-4.112.
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FCA Relator and U.S. Weigh in on Defendants' Argument that the FCA is Unconstitutional

May 9, 2019 | Blog | By Samantha Kingsbury, Brian Dunphy

As part of our ongoing discussion of the Polukoff False Claims Act (FCA) qui tam case (involving allegations that certain heart procedures performed by a cardiologist, and billed for by two hospital defendants, were not medically necessary), we reported in February that some defendants filed a petition for a writ of certiorari with the United States Supreme Court. 
Viewpoint General
As many of our readers know, we have been closely following the Polukoff False Claims Act (FCA) qui tam case in the Tenth Circuit for the lessons it might offer in defending FCA cases premised on allegations related to lack of medical necessity (among other topics).  Recently, we had the opportunity to consider this case from a different angle: the lessons it might offer to bankruptcy counsel advising clients who are or have been the subject of a health care fraud investigation and/or FCA qui tam case. 
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The Supreme Court denied a petition for certiorari last Monday in U.S. ex rel. Prather v. Brookdale Senior Living Communities, Inc., No. 17-5826 (6th Cir. June 11, 2018), again declining to revisit or clarify the False Claims Act's “materiality” standard set forth in its 2016 decision in Universal Health Services v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016). 

In Prather, the relator alleged that defendant Brookdale Senior Living Communities, Inc. (Brookdale), a home health provider, submitted bills for medical services that were “untimely” signed and certified by physicians in violation of Medicare regulations.  When submitting Medicare claims, Brookdale purportedly did not obtain the required physician certifications attesting that the medical services provided by Brookdale were necessary until months after establishing a patient’s plan of care.  Because Medicare regulations under 42 C.F.R. § 424.22(a)(2) require physician certifications “at the time the plan of care is established or as soon thereafter as possible,” the relator alleged that Brookdale’s untimely certifications rendered the claims false under the implied false certification theory.  The district court dismissed the complaint on materiality grounds, holding that the noncompliance was insubstantial and that the relator failed to allege that the government had ever denied a claim based on a violation of the timing requirement under the Medicare regulations.
Viewpoint General
Last week, a U.S. district court judge in the Southern District of Florida upheld a magistrate judge’s decision to dismiss False Claims Act (FCA) allegations against a compounding pharmacy, its private equity firm owner, and two individuals. DOJ filed its complaint in intervention last February against the pharmacy, Patient Care America (PCA); its private equity backer, Riordan Lewis & Haden, Inc.; and two individual executives. The government alleged that the parties engaged in an illegal kickback scheme that resulted in the submission of false claims to TRICARE for expensive compounded drugs. This case is reportedly the first in which the federal government intervened against a private equity firm owner.
Viewpoint General

Independent Laboratory Settles Medical Necessity Allegations

February 20, 2019 | Blog | By Karen Lovitch, Cassandra Paolillo

The Department of Justice (DOJ) recently announced a $1.99 million False Claims Act (FCA) settlement with GenomeDx Biosciences Corp. (“GenomeDx”), a laboratory headquartered in Vancouver, British Columbia with operations in San Diego. The matter arose as the result of a qui tam case brought by two former employees in September 2017.
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A Tale of Two False Claims Act Settlements Involving EHR Vendors

February 13, 2019 | Blog | By Sarah Beth Kuyers, Karen Lovitch

Last week the Department of Justice (DOJ) announced a $57 million settlement with electronic health record (EHR) software vendor Greenway Health LLC (Greenway).  According to DOJ, Greenway violated the False Claims Act (FCA) by fraudulently obtaining certification of its software and misrepresenting its software’s capabilities to customers, thereby causing its customers to submit false attestations of “meaningful use” of EHR technology when seeking to qualify for incentive payments available through the Medicare and Medicaid EHR Incentive Program.  The complaint also alleged that Greenway illegally paid kickbacks to customer in exchange for recommendations to prospective new customers.
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On January 9, 2019, AdvaMed announced revisions to its Code of Ethics.  As any medical product business knows, compliance with the AdvaMed Code of Ethics (the “Code”) is essential.  While the Code is voluntary, many states require medical product manufacturers and companies to adopt compliance programs consistent with the Code.  The amendments will be effective January 1, 2020.
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Mintz/ML Strategies’ 4th Annual Pharmacy & Pharmaceutical Industry Summit has been scheduled for Thursday, May 2, 2019 – mark your calendars! People from across the industry will gather for one day to share insights about issues that the players in this complex marketplace are tackling.
Viewpoint General
As many of our readers know, we have been closely following the Polukoff False Claims Act (FCA) qui tam case, which is based on allegations that certain heart procedures performed by a cardiologist were not medically necessary.  The latest development in this case came a few weeks ago, when defendants Intermountain Health Care, Inc. and IHC Health Services, Inc. d/b/a Intermountain Medical Center (Intermountain) filed a Petition for a Writ of Certiorari with the United States Supreme Court. The Petition raised two issues: (1) whether a court may create an exception to Federal Rule of Civil Procedure 9(b)’s particularity requirement when the plaintiff claims that only the defendant possesses the information needed to satisfy that requirement; and (2) whether the False Claims Act’s qui tam provisions violate the Appointments Clause of Article II of the Constitution.
Viewpoint General
Over the last few weeks, we published a number of posts examining important developments and trends in 2018 as well as what we expect to see in 2019. Our posts cover a range of topics, including enforcement and litigation, HIPAA and the FDA. In case you missed one, below are links to all of our Year In Review posts.
Viewpoint General

Health Care Enforcement Year in Review and 2019 Outlook: Civil Litigation Developments and Settlements

January 11, 2019 | Blog | By Brian Dunphy, Laurence Freedman, Karen Lovitch

As in years past, the False Claims Act (FCA) remained a powerful health care enforcement tool in 2018, and FCA investigations and litigation persisted, fueled mainly by hundreds of lawsuits filed annually by relators, including 645 new qui tam actions initiated in FY 2018.
Viewpoint General
Last year, as we previously discussed, there were two significant Department of Justice (DOJ) policy developments that are applicable to False Claims Act (FCA) litigation: (1) the “Granston Memo” (issued by DOJ Civil Fraud Director Michael Granston), which set forth direction for DOJ’s exercise of its authority to dismiss declined qui tam FCA cases; and (2) the “Brand Memo” (issued by Associate Attorney General Rachel Brand), which instructed DOJ’s FCA litigators not to use any sub-regulatory guidance to create legal obligations. 
Viewpoint General
Criminal healthcare enforcement in 2018 once again focused heavily on opioids, targeting manufacturers, prescribers, dispensers and those who contribute to the addiction epidemic, and on prosecution of individuals for a variety of offenses.  In addition, the DOJ announced some expected policy changes related to the way it investigates and prosecutes corporations as well as the restrictions placed on corporations after resolution of government charges.  We will address each of these issues in this post and will attempt to forecast what we expect to occur in the coming year.
Viewpoint General
In 2018, the volume of False Claims Act (FCA) litigation remained high, and health care-related qui tam (i.e., whistleblower) cases continued to lead the way. Using data compiled in the Mintz Health Care Qui Tam Database (which is described further below), this post analyzes the trends in cases unsealed in 2018. To evaluate long-term trends, we examined the annual Department of Justice (DOJ) compilation of FCA cases. Together these data sets show that health care cases continue to make up a large majority of all whistleblower cases brought under the FCA, and almost two-thirds of those cases were brought by current or former employees, mostly against large pharmaceutical companies, physicians, and hospitals.
Viewpoint General
Nearly one year ago, on January 25, 2018, the Department of Justice’s (DOJ) Regulatory Reform Task Force issued a memorandum entitled “Limiting Use of Agency Guidance Documents In Affirmative Civil Enforcement Cases.”  Many refer to this memorandum as the “Brand Memo” because it was authored by Associate Attorney General Rachel Brand.  The Brand Memo implemented the prohibition previously issued by U.S. Attorney General Jeff Sessions in November 2017 against, in part, DOJ using guidance documents issued by other agencies “to create binding standards by which [DOJ] will determine compliance with existing statutory or regulatory requirements” (the “Sessions Memo”).
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HIPAA and Health Care Data Privacy - 2018 Year-in-Review

January 4, 2019 | Blog | By Sarah Beth Kuyers, Kristen Marotta, Kate Stewart

Today, we’re looking back at HIPAA and other privacy and security developments in 2018.  This past year saw continued HIPAA enforcement (including the largest ever fine for a HIPAA breach), reminders from the OCR on best practices for HIPAA compliance, and updates to state and international privacy and security laws.  We’ll also look ahead to 2019, which could bring several significant changes to HIPAA, such as reducing the burdens for sharing patient information in order to promote care coordination and better patient outcomes.
Viewpoint General

DOJ Follows Through on a 2018 New Years’ Resolution: Rein In Qui Tam Actions

December 20, 2018 | Blog | By Laurence Freedman, Bridgette Keller

Along with most of us, last January DOJ set its own goals for 2018: new policies related to False Claims Act (“FCA”) enforcement. One such “resolution” for 2018 was the DOJ Civil Fraud section’s instruction to its attorneys and all AUSAs handling FCA cases to routinely consider whether declined qui tam actions should be dismissed under the Department’s authority in Section 3730(c)(2)(A) of the FCA, which it had rarely used from 1986 through 2017. Known as the “Granston Memo” (which we discuss here) and now codified in the Justice Manual, the central theme of the instruction is that seeking dismissal of qui tam actions may be in the government’s interest to “preserve limited resources and avoid adverse precedent.” We are now seeing the first evidence of DOJ following through on that resolution.
Viewpoint General

HIPAA Penalties For Failure to Cut Off Access To Former Employee

December 12, 2018 | Blog | By Kristen Marotta

It has been a busy few weeks for HIPAA enforcement. On Tuesday, the Office for Civil Rights announced its third resolution of a HIPAA breach in as many weeks. In this latest matter, OCR announced that Pagosa Springs Medical Center (PSMC), a critical access hospital in Colorado, has agreed to both pay $111,400 to the Office for Civil Rights (OCR) as well as adopt a comprehensive, two-year corrective action plan (CAP) to address and settle potential HIPAA violations.
Viewpoint General

Another HIPAA Settlement for Failure to Enter Into a BAA

December 10, 2018 | Blog | By Sarah Beth Kuyers

Last week, the Office for Civil Rights (OCR) announced that it had reached a settlement with a contract physician group based in Florida to resolve potential HIPAA violations relating to the sharing of protected health information (PHI) with a vendor. The physician group, Advanced Care Hospitalists PL (ACH), agreed to pay $500,000 and to adopt a corrective action plan to address the alleged conduct.
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