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Hannah Webber

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Hannah Webber is an associate in the Litigation & Dispute Resolution Practice Group. She focuses on representing clients in healthcare-related litigation and investigations, as well as in other business disputes. She represents healthcare providers in litigation under the False Claims Act, internal compliance investigations, and investigations by the Department of Justice, United States Attorneys’ Offices, and the Office of Inspector General of the Department of Health and Human Services.

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Earlier this month the Northern District of California unsealed a criminal complaint filed against the president of a medical technology company, charging him with one count of conspiracy to commit healthcare fraud and one count of securities fraud. This case is one of the Department of Justice’s (DOJ) first notable healthcare fraud prosecutions related to the COVID-19 pandemic and is the government’s first COVID-19-related prosecution for securities fraud.

Arrayit Corporation, a California-based medical technology company providing allergy testing, purported to use a “microarray technology,” which the company likened to the headline-making Theranos nanotainer technology, to test finger-prick drops of blood placed on a paper card and mailed to Arrayit’s laboratory. Defendant and company President Mark Schena describes himself as the “Father of Microarray Technology,” and Arrayit touted through social media that its microarray testing can use a drop of blood 250,000 times smaller than that used by Theranos.Continue Reading DOJ Brings COVID-19-Related Fraud Charges Against Tech Company President

The Department of Justice (DOJ) announced this month that it obtained over $3 billion in settlements and judgments from civil fraud and false claims cases during the fiscal year ending September 30, 2019 (FY 2019). Of this total recovery, the vast majority—$2.6 billion—arose from matters related to different sectors of the healthcare industry. DOJ noted that 2019 was the tenth consecutive year that recoveries from civil healthcare fraud cases have exceeded $2 billion, indicating that the government’s enforcement efforts remain focused on allegations of fraud in the healthcare sector.

Large Recoveries Related to Drug Manufacturers & EHR

Within the healthcare industry, the government reported significant recoveries against pharmaceutical manufacturers. Insys Therapeutics paid $195 million to resolve civil False Claims Act (FCA) allegations that it paid kickbacks to induce healthcare providers to inappropriately prescribe its fentanyl product, Subsys, to their patients. This civil settlement was part of a larger global resolution of civil and criminal allegations, with Insys agreeing to pay a total of $225 million. Reckitt Benckiser Group agreed to pay $1.4 billion to resolve criminal and civil allegations related to the marketing of the addition treatment drug Suboxone, a buprenorphine product. The global resolution included a $500 million civil settlement with the federal government.Continue Reading DOJ Announces 2019 FCA Recovery, Majority Came from Healthcare Industry

Government Settles with Several Entities, Individuals

Last week, Vanguard Healthcare and related entities reached a settlement with the Department of Justice (DOJ) for the stated amount of more than $18 million to settle allegations related to billing worthless services to Medicare and Medicaid programs from 2010 to 2015. The settlement also includes a resolution of claims against two individuals—Vanguard’s majority owner and CEO and its and former director of operations—consistent with the DOJ’s ongoing policy of focusing on individual liability (as discussed here). The CEO and director of operations will pay $212,500 and $37,500, respectively, of the total settlement sum. In its press release, the DOJ called this the “largest worthless services resolution in Tennessee history.”

The United States and the state of Tennessee sued the nursing home chain in September 2016, after the Vanguard entities had filed Chapter 11 bankruptcy proceedings.  In the complaint and in claims filed in the bankruptcy cases, the government alleged damages in excess of $56 million.  The primary allegations were that Vanguard and its subsidiaries billed Medicare and TennCare for “non-existent, grossly substandard, and/or worthless nursing home services[.]” The alleged inadequate care included staffing and supply shortages, a lack of infection control, failure to administer medications as prescribed, failure to care for wounds as ordered, lack of adequate pain management, and overuse of psychotropic medications and physical restraints, among other quality of care allegations. The government also alleged that Vanguard submitted Pre-Admission Evaluations and Preadmission Screening and Resident Reviews (certifications that TennCare uses to determine a patient’s Medicaid eligibility and required level of care) with forged physician or nurse signatures.Continue Reading Tennessee Nursing Home Chain Reaches “Largest Worthless Services Resolution in Tennessee’s History”

On December 11, 2018, the United States announced that it has elected to intervene in a False Claims Act (FCA) lawsuit filed against Sutter Health and its affiliated entity Palo Alto Medical Foundation (PAMF) alleging that the defendants defrauded the Medicare Advantage program by submitting false patient information to the government. The whistleblower, a former employee of PAMF, alleges that Sutter “has taken and continues to take hundreds of millions of dollars in inflated capitation payments” by submitting “risk adjustment data Sutter knows to be inaccurate, incomplete or false.”

Medicare Advantage Plans

Medicare Advantage, formally known as Medicare Part C, allows private insurance companies, acting as “Medicare Advantage Organizations (MAOs),” to offer insurance plans and administer Medicare benefits. MAOs contract with healthcare providers such as Sutter to provide Medicare services to the plans’ enrollees. Instead of receiving reimbursement on a traditional fee-for-service basis, MAOs provide benefits under a capitated payment system, whereby government reimbursement is based on each individual beneficiary’s risk adjustment data.Continue Reading DOJ Intervenes in Another Medicare Advantage Risk Adjustment FCA Suit

The U.S. Court of Appeals for the Fifth Circuit vacated a $663 million judgment, concluding that the Supreme Court’s opinion in Escobar doomed the plaintiff’s FCA claims on the issue of materiality.

FCA Allegations: Highway Guardrail Systems Had Unapproved Design Modifications

Trinity Industries, a manufacturer of highway guardrail systems, faced FCA allegations brought by a former competitor based on the theory that federally subsidized purchases of Trinity’s guardrail systems resulted in false claims as a result of unapproved design modifications. Prior to the filing of the relator’s qui tam lawsuit, the relator met extensively with Federal Highway Administration (FHWA) officials during which he presented his allegations regarding the design modifications and his assertions that those modifications rendered Trinity’s guardrail systems ineligible for federal reimbursement. FHWA met separately with Trinity to discuss the relator’s allegations. Following those meetings, FHWA confirmed that state purchases of the Trinity guardrail system were eligible for federal reimbursement notwithstanding the design modifications.Continue Reading Fifth Circuit Relies on Escobar in Vacating $663 Million FCA Judgment

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From the Bass, Berry & Sims Blog Network

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