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Taylor Chenery

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Taylor Chenery centers his practice on government compliance and investigations and related litigation, focusing on healthcare fraud and abuse issues. He has significant experience representing a wide variety of healthcare clients in responding to governmental investigations and defending False Claims Act lawsuits. Taylor also has significant experience in complex commercial litigation matters, ranging from class action lawsuits to private arbitrations.

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The Medicare Advantage program, which allows private insurance companies to offer and administer Medicare benefits, continues to be an area of sharp scrutiny for False Claims Act (FCA) enforcement despite some significant recent setbacks in pursuing FCA liability against Medicare Advantage Plans (MA Plans or Plans).  In 2018, several district court decisions raised obstacles to the pursuit of FCA liability against MA Plans, and those decisions have continued to affect FCA enforcement efforts in the first half of 2019.  Despite those setbacks, however, the prevalence of government enforcement actions involving Medicare Advantage illustrates that it remains an area of focus for the Department of Justice (DOJ).

The Focus on Medicare Advantage

Unlike traditional fee-for-service Medicare, MA Plans are compensated on a monthly basis through a fixed payment for each member.  The amount of the monthly payment – known as a capitation payment – is determined for each payment year through a process called “risk adjustment” and is based on each individual member’s demographic information and data reflecting the member’s medical condition, as documented during the 12 months preceding the payment year.  A member’s condition and medical diagnoses must be supported by a valid medical record.Continue Reading Medicare Advantage: Recent Developments in FCA Enforcement

On January 14, 2019, Intermountain Healthcare, Inc. and Intermountain Medical Center (Intermountain) filed a petition for writ of certiorari with the U.S. Supreme Court.  Intermountain’s petition comes after the U.S. Court of Appeals for the Tenth Circuit reversed a district court’s grant of Intermountain’s motion to dismiss.  In relevant part, the district court concluded that the relator failed to identify any company employees with knowledge of the alleged fraud or when any employees knew about the fraud.  The Tenth Circuit reversed, holding that the relator need not allege those facts because they were in the defendant’s exclusive control and that allegations of knowledge need only be pleaded generally.

Intermountain’s petition raises two questions:

  • Can a plaintiff avoid Federal Rule of Civil Procedure 9(b)’s pleading requirements by asserting that only the defendant possesses the information needed to meet those requirements?
  • Do the False Claims Act’s (FCA) qui tam provisions violate the Appointments Clause of Article II of the U.S. Constitution?

Both questions have previously appeared in petitions for writ of certiorari, but neither question has been addressed by the Supreme Court.  See, e.g., Petition for Writ of Certiorari, U.S. ex rel. Joshi v. St. Luke’s Hospital, Inc. (denied Oct. 2, 2006); Petition for Writ of Certiorari, GPM Gas Corp. et al. v. U.S. ex rel. Grynberg (denied Apr. 22, 2002).Continue Reading Supreme Court Asked to Review Pleading Standard and Constitutionality of FCA

On November 30, 2018, the Solicitor General of the United States filed an amicus curiae brief in the closely watched False Claims Act (FCA) lawsuit, Gilead Sciences Inc. v. U.S. ex rel. Campie. In what appears to be an unprecedented move, the Solicitor General stated in an amicus brief filed with the Supreme Court – without any prior indication – that the Department of Justice (DOJ) will move to dismiss the relator’s complaint if the case is remanded back to the district court because allowing the case to proceed “would impinge on agency decision making and discretion and would disserve the interests of the United States.”

Defendant Gilead Seeks Review of Ninth Circuit Decision

Two relators filed an FCA lawsuit against Gilead Sciences, Inc. in 2010 alleging that the pharmaceutical manufacturer misrepresented to the government that it obtained an active ingredient in three of its HIV drugs from specifically approved facilities. The relators also allege that Gilead provided false or inaccurate information to the Food and Drug Administration (FDA) in an attempt to gain approval to receive ingredients from an alternate facility. The relators argue that the government would not have reimbursed Gilead for the drugs at issue had it known the truth about the source of the drugs’ active ingredients.
Continue Reading DOJ Informs Supreme Court that It Will Dismiss FCA Case if Remanded to District Court

On Tuesday, November 20, 2018, Defendants-Petitioners Brookdale Senior Living Communities, Inc. et al. (Brookdale) filed a petition for a writ of certiorari with the U.S. Supreme Court asking the Court to resolve circuit splits regarding enforcement of the materiality and scienter elements of the False Claims Act (FCA) in cases involving the implied false certification theory of liability. The relator in the case, styled Brookdale Senior Living Communities, Inc. v. U.S. ex rel. Prather, is a former Brookdale utilization review nurse who alleges that Brookdale did not obtain physician signatures on home health certifications as soon as possible after the physician established a plan of care, in violation of Medicare regulations. The U.S. District Court for the Middle District of Tennessee previously dismissed the lawsuit for failure to plead falsity, but the case was revived on appeal by a divided panel of the Court of Appeals for the Sixth Circuit, which held that the relator adequately pleaded a regulatory violation. After the relator amended her complaint in light of the Supreme Court’s 2016 decision in Universal Health Services, Inc. v. U.S. ex rel. Escobar, which addressed the FCA’s materiality requirement, the district court dismissed the case for failure to plead materiality. On appeal, however, the Sixth Circuit again reversed in a 2-1 decision, finding that the relator adequately pleaded materiality and scienter.
Continue Reading Supreme Court Review Sought on FCA Materiality, Scienter Elements

The U.S. District Court for the Eastern District of Pennsylvania recently refused to extend the period during which a False Claims Act (FCA) action remains under seal while the government investigates and decides whether to intervene. In U.S. ex rel. Brasher v. Pentec Health, Inc., which involved claims of illegal kickbacks constituting FCA violations, the court denied the government’s eleventh extension request and subsequent request for reconsideration even after both the relator and the defendant joined that request. The case had been under seal for more than five years.

Settlement Discussions Were Not Good Cause to Extend the Seal Period

The court held that the matter would not remain sealed to allow the government and defendant time to reach a settlement. It noted that “the purpose of the sealing provision is not to allow the Government to prosecute a civil action entirely under seal and then to present a settlement as a fait accompli to the Court and the general public.”Continue Reading “Significant Abuses of the Statutory Scheme:” District Court Criticizes Practice of Regular Extensions of the FCA Seal Period

Bass, Berry & Sims attorney Taylor Chenery discussed the implications of a recent court ruling demonstrating how a court should analyze multiple different types of alleged claims under the False Claim Act at the motion to dismiss phase of the case. The case involves Boston Heart Diagnostics Corp., who is facing allegations from a former…

Bass, Berry & Sims attorney Taylor Chenery provided insight in a Bloomberg article on the effect that a Department of Justice (DOJ) Memorandum is having on healthcare fraud enforcement actions and corresponding defense strategies. The Brand Memo, named after then-Associate Attorney General Rachel Brand, was issued by the DOJ in January 2018 and limits the use of guidance documents in civil enforcement actions and prevents DOJ attorneys from using “informal agency guidance as binding law.”
Continue Reading Impact of DOJ Memo on Government Enforcement Actions

The Ninth Circuit recently revived a False Claims Act (FCA) suit against Medicare Advantage Organizations (MAOs) related to risk adjustment payments for Medicare Advantage plans in U.S. ex rel. Silingo v. WellPoint Inc. et al.  As previously discussed in this blog post, MAOs provide Medicare benefits under a capitated payment system, whereby government reimbursement is based on an individual’s risk adjustment data.  The Centers for Medicare and Medicaid Services (CMS) increase monthly payments to MAOs when an individual’s medical diagnoses support a higher level of risk or cost of care.  Recently, both relators and the government in a number of cases have challenged the validity of diagnostic patient information utilized to support risk adjustment data, as discussed here and here.
Continue Reading Ninth Circuit Reaffirms Group Pleading Standard in FCA Cases

Bass, Berry & Sims attorney Taylor Chenery commented on a decision from a federal district court in Pennsylvania allowing a whistleblower’s case to proceed and rejecting the defendant’s argument that the claims at issue were barred because the allegations were previously publicly disclosed. The case involves False Claims Act (FCA) allegations against Medtronic Inc. that the company provided improper kickbacks to healthcare providers to encourage them to prescribe Medtronic devices.
Continue Reading Public Disclosure Bar Analysis in False Claims Act Case

In an article for Nashville Medical News, Bass, Berry & Sims attorney Taylor Chenery examined two recent Department of Justice (DOJ) memoranda that limit the use of guidance documents in civil enforcement actions. These memos may signal a change in how the government will approach enforcement efforts involving allegations of healthcare fraud and provide insight into how providers may be able to contest such allegations.

The memos – the first released in November 2017 by Attorney General Jeff Sessions and the second released in January 2018 by then-Associate Attorney General Rachel Brand – “relate to the government’s use of guidance documents — as opposed to codified statutes or regulations — to educate regulated parties and to enforce existing statutory or regulatory requirements.”Continue Reading DOJ Memos Outlining Use of Guidance Documents in Enforcement Actions

From the Bass, Berry & Sims Blog Network
From the Bass, Berry & Sims Blog Network

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