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On July 19, 2019, Myriad Genetics disclosed a $9.1 million settlement agreement to resolve a False Claims Act (FCA) qui tam lawsuit alleging that it engaged in a scheme to fraudulently bill Medicare for certain hereditary cancer tests.

Notably, the qui tam relator in the case was not a Myriad corporate insider, but rather a medical director for Palmetto GBA, the Medicare Administrative Contractor (MAC) responsible for overseeing the program through which Myriad’s tests are covered by Medicare.  In this way, the settlement illustrates the often overlooked risk that individuals other than conventional corporate whistleblowers—including even government employees or employees of government administrative contractors—may serve as FCA relators.Continue Reading Myriad Genetics Settlement Illustrates FCA Risks Posed by Government and Other Non-Traditional Relators

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

I recently provided comments for an article in Hospice News detailing the False Claims Act case against hospice provider, Heartland Hospice, that also details the government’s focus within this broader long-term care industry. The qui tam case against Heartland recently was dismissed with prejudice by a federal judge.

“Overall, qui tam cases continue to be…

We wrote an article examining recent enforcement actions by the government within the long-term care industry for McKnight’s Long-Term Care News. In the article, we point out that “recent cases reinforce the notion that long-term care providers should pay particular attention to the government’s efforts to police arrangements and business practices that implicate the…

On March 18, 2019, the Department of Justice (DOJ) filed an amended complaint-in-intervention in the False Claims Act (FCA) case against Diabetic Care Rx, LLC d/b/a Patient Care America (PCA); two of PCA’s executives; and the company’s private equity owner, Riordan, Lewis & Haden, Inc. (RLH).  This filing comes on the heels of a March 5 decision by the U.S. District Court for the Southern District of Florida that dismissed for insufficient pleading DOJ’s FCA claim that the defendants submitted or caused the submission of false claims to TRICARE for compound prescriptions obtained through the payment of unlawful kickbacks to marketers, physicians and patients.  This case is significant and has been closely watched by the industry because it represents the first time DOJ has intervened in an FCA suit against a private equity firm alongside a healthcare portfolio company accused of submitting false claims.

Government Accused Private Equity Owner of Being Involved in Kickback Activity

This matter involves allegations that PCA paid kickbacks to marketers to target TRICARE beneficiaries for compound pain creams, scar creams and vitamins, regardless of medical necessity.  The marketers allegedly paid telemedicine physicians who prescribed the products without ever physically examining the patients, and colluded with PCA to pay many patients’ copayments to induce their acceptance of the lucrative compound drugs.  As support for its claim against RLH, as the private equity firm, the government has repeatedly cited to evidence purporting to show RLH’s material day-to-day involvement in the operations of PCA and its awareness of the facts surrounding the alleged kickback conduct.  The government has alleged that at all relevant times, RLH managed and controlled PCA through two RLH partners who also served as officers and/or directors of PCA and of two holding companies with an interest in PCA.Continue Reading Government Files Amended FCA Complaint Against Private Equity Firm and its Portfolio Company

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”

Greenway Health LLC, a Tampa-based developer of electronic health records (EHR) software, recently agreed to pay $57.25 million to resolve False Claims Act (FCA) allegations that it overstated the capabilities of and failed to correct known errors with its EHR software.  In a complaint filed in the United States District Court for the District of Vermont, the United States alleged that Greenway caused its users to submit false claims to the government by, among other things, misrepresenting the capabilities of its EHR product “Prime Suite” and providing unlawful remuneration to users to induce them to recommend the product.

EHR Companies Must Be HHS Certified

The American Recovery and Reinvestment Act of 2009 established the Medicare and Medicaid EHR Incentive Program to encourage healthcare providers to adopt EHR technology and demonstrate its “meaningful use.”  To obtain certification for their product, EHR companies are required to demonstrate that their product satisfies all applicable U.S. Department of Health and Human Services (HHS) certification criteria.  This requires that developers do the following two things:

  1. Pass testing performed by an independent, accredited testing laboratory authorized by HHS.
  2. Obtain and maintain certification by an independent, accredited certification body authorized by HHS.

Continue Reading Electronic Health Records Company Pays High Price for Software Shortcomings

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

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