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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.
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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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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.
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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. 
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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.
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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.
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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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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.
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Tenth Circuit Rejects Request for Rehearing in Closely Watched FCA Medical Necessity Case

November 13, 2018 | Blog | By Samantha Kingsbury, Laurence Freedman

In a three-sentence order issued on October 29th, the Tenth Circuit Court of Appeals declined to grant a Request for Rehearing in the closely watched Polukoff case. One of the questions raised in the Request was whether, by submitting a claim for reimbursement and certifying the medical necessity of the charged service, providers also certify that the claim meets all of the standards set forth in the Medicare Program Integrity Manual (MPIM).
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The 2014 Overpayment Rule is Vacated: How We Got Here and Key Takeaways

September 26, 2018 | Blog | By Bridgette Keller

Medicare Advantage Organizations (MAOs) have been hailing a federal judge’s recent ruling to vacate the 2014 Overpayment Rule. But, how did we get here? And what does it really mean for MAOs?

Amended FCA Complaint Cannot Cure A First-to-File Violation

August 17, 2018 | Blog | By Mackenzie Queenin

The Second Circuit Court of Appeals recently held that a False Claims Act (FCA) relator could not evade the FCA’s first-to-file bar by filing an amended complaint after two earlier-filed FCA suits alleging similar conduct had been dismissed.
Last week, Mintz’s Health Care Enforcement Defense Group published a new Qui Tam Update, which analyzes 46 health care-related False Claims Act qui tam cases unsealed in February and March 2018 and the trends they reflect:
The Tenth Circuit Court of Appeals has issued a significant decision, finding that a physician’s medical judgment about the medical necessity of heart procedures can be “false or fraudulent” under the federal False Claims Act (FCA). 
Last week, Mintz’s Health Care Enforcement Defense Group published a new Qui Tam Update, which analyzes 60 health care-related False Claims Act qui tam cases unsealed in December 2017 and January 2018 and the trends they reflect.

The Hazards of Prescription Auto-Refill Programs

June 6, 2018 | Blog | By Lauren Moldawer

States may be starting to take aim at prescription automatic refill programs. Automatic refill programs have been proven to increase patient adherence, especially among patients with chronic conditions. However, regulators argue that automatic refill programs result in waste to the system, stockpiling, and federal program payment for unneeded prescriptions.
Recently the U.S. Department of Justice (DOJ) issued a statement that it had intervened in a False Claims Act (FCA) case against Insys Therapeutics, Inc. and consolidated five separate qui tam cases into one case, U.S. ex rel Guzman v. Insys Therapeutics, Inc., filed in the U.S. District Court for the Central District of California.
Mintz and ML Strategies will host the 3rd Annual Pharmacy & Pharmaceutical Industry Summit on May 8, 2018! This year's summit will take place in Boston and we are thrilled to announce that Massachusetts Governor Charlie Baker will be the keynote speaker. 
Mintz Levin’s Health Care Enforcement Defense Group released its most recent Health Care Qui Tam Update yesterday. This Update analyzes 56 qui tam cases unsealed in October and November of last year. None of the 56 cases in this Update were unsealed within the statutorily-mandated 60 days, but one case was unsealed in 71 days.
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