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Health Care Enforcement Year-in-Review and 2020 Outlook: Criminal Case Developments
January 22, 2020 | Blog | By Eoin Beirne, Nicole Henry, Jason Burrell , Jane Haviland
As discussed in our article recently published by Law360, criminal health care enforcement in 2019 was in many ways a continuation of 2018, with opioid-related enforcement continuing to be the clear top priority for the Department of Justice (DOJ), in addition to DOJ's sustained focus on prosecuting individuals and data-driven identification of health care fraud. This post provides an overview of our article, which covers these issues and our expectations for 2020 in detail.
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Health Care Enforcement Year-in-Review and 2020 Outlook: Civil Fraud Enforcement Developments and Trends
January 21, 2020 | Blog | By Brian Dunphy, Laurence Freedman, Karen Lovitch , Nicole Henry, Clare Prober
As discussed in our article recently published by Law360, 2019 brought yet another year of robust health care enforcement activity, and the False Claims Act (FCA) remains the government’s most powerful civil health care enforcement tool. This post will give an overview of our article, which covers these issues and more in great detail.
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Third Circuit Says the FCA Does Not Guarantee A Hearing When DOJ Seeks to Dismiss Declined FCA Cases
September 24, 2019 | Blog | By Nicole Henry
The Court of Appeals for the Third Circuit recently weighed in on a relator’s right to a hearing where the government moves to dismiss a declined qui tam case, holding that the False Claims Act (FCA) does not guarantee a relator an in-person hearing before their declined FCA cases may be dismissed.
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Compounding Pharmacy and Private Equity Firm Owner Agree to $21 Million Settlement to Resolve FCA Allegations
September 20, 2019 | Blog | By Xavier Hardy, Karen Lovitch
The Department of Justice (DOJ) recently announced that it has agreed to a $21.36 million settlement with compounding pharmacy Diabetic Care Rx LLC d/b/a Patient Care America (PCA), private equity firm Riordan, Lewis & Haden Inc. (RLH), and two PCA executives to resolve a pending False Claims Act (FCA) case. As discussed in a previous post regarding DOJ's decision to intervene, this case is notable because a private equity firm does not typically find itself subject to FCA action, and it is reported to be the first case against a private equity firm in which DOJ has chosen to intervene.
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Eleventh Circuit Rules in AseraCare Case that Disagreements in Clinical Judgment, Without Objective Falsity, Do Not Prove Fraud Under the FCA
September 11, 2019 | Blog | By Samantha Kingsbury, Laurence Freedman, Brian Dunphy
On Monday, the U.S. Court of Appeals for the Eleventh Circuit issued its long-awaited and closely watched decision in United States v. AseraCare Inc.. The court ruled that a claim cannot be deemed false under the False Claims Act (FCA) based on a difference in clinical judgment. Instead, there must be proof of an objective falsehood. More than three years have passed since the U.S. District Court for the Northern District of Alabama issued the series of rulings that gave rise to the Eleventh Circuit case.
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DOJ Seeks Dismissal of FCA Qui Tam Case to Escape Onerous Discovery Obligations
August 22, 2019 | Blog | By Jane Haviland, Karen Lovitch
On August 20, 2019, the United States exercised its authority under the False Claims Act (FCA) to seek dismissal of a relator’s qui tam suit because of the defendant’s burdensome discovery demands, in Polansky v. Executive Health Resources, Inc. Since the lawsuit’s inception in 2012, the U.S. Department of Justice (DOJ), the U.S. Department of Health and Human Services' (HHS) Centers for Medicare and Medicaid Services (CMS), and other government agencies have attempted to fend off a series of burdensome Touhy requests but failed to do so. Meanwhile, the scope of discovery has ballooned. Collectively, DOJ and HHS have deployed six attorneys to work this case. And, to top it off, DOJ is concerned about relator’s credibility and his ability to prove a FCA violation. DOJ’s dismissal request thus comes as no surprise.
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Third Circuit Dismisses FCA Case Under Pre-ACA Version of Public Disclosure Bar
July 10, 2019 | Blog | By Jane Haviland
The Third Circuit Court of Appeals recently dismissed a relator’s False Claims Act (“FCA”) case under the pre-Affordable Care Act (“ACA”) version of the public disclosure bar. The court decided in U.S. ex rel. Denis v. Medco that to escape the FCA’s public disclosure bar by qualifying as an “original source” under the pre-ACA version of the FCA, a relator must have first-hand, non-derivative knowledge of conduct giving rise to the FCA claim.
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Third Time’s Not the Charm: Supreme Court Again Declines to Weigh in on Escobar’s “Materiality” Standard
March 25, 2019 | Blog | By Brian Dunphy, Nicole Henry
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.
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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.
Judge Dismisses FCA Claims Against Compounding Pharmacy and Private Equity Firm Owner but Allows the Government to Amend
March 13, 2019 | Blog | By Karen Lovitch , Cassandra Paolillo
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 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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In Case You Missed It: A List of Our Health Care Year in Review Posts
January 17, 2019 | Blog
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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Health Care Enforcement Year in Review & 2019 Outlook: New DOJ Policies Applicable to FCA Litigation
January 10, 2019 | Blog | By Brian Dunphy, Laurence Freedman
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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Health Care Enforcement Year in Review & 2019 Outlook: Criminal Enforcement Trends
January 9, 2019 | Blog | By Eoin Beirne
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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Health Care Enforcement Year in Review & 2019 Outlook: Analysis of Health Care FCA Litigation Trends
January 8, 2019 | Blog | By Kevin McGinty
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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DOJ Updates its Justice Manual to Include Section Limiting Use of Guidance Documents in Litigation
January 7, 2019 | Blog | By Samantha Kingsbury
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?
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Viewpoint Editors
Karen S. Lovitch
Chair, Health Law Practice & Co-Chair, Health Care Enforcement Defense Practice
Joanne S. Hawana
Member
Rachel E. Yount
Of Counsel
Pat G. Ouellette
Associate
Stephnie A. John
Associate
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