The United States recently intervened in a False Claims Act lawsuit accusing Rite Aid of defrauding federal healthcare programs by seeking reimbursement for opioids the pharmacy allegedly dispensed in violation of the Controlled Substances Act. Continue Reading Controlled Substances Act and False Claims Act Collide
In a recent decision, U.S. ex rel. Sibley v. Univ. of Chicago Medical Center, the U.S. Court of Appeals for the Seventh Circuit considered allegations that two medical billing and debt collection companies, Medical Business Office Corp. (MBO) and Trustmark Recovery Services, Inc. (Trustmark), and the University of Chicago Medical Center (UCMC), a client of one of the debt collection companies, violated the False Claims Act (FCA) by seeking inappropriate reimbursement from the Centers for Medicare and Medicaid Services (CMS) for Medicare “bad debts.”
Continue Reading Seventh Circuit Signals Ongoing Importance of Compliance with Medicare “Bad Debt” Regulations
The second quarter of 2022 brought a number of noteworthy False Claims Act (FCA) settlements, including several of $20 million or more. This post summarizes key settlements of interest to healthcare providers.
Continue Reading False Claims Act Settlements to Know from Q2 2022
The first quarter of 2022 brought news of several noteworthy False Claims Act (FCA) settlements, including several settlements by physicians regarding arrangements deemed to be unlawful kickbacks and the first settlement under the Department of Justice’s Civil Cyber-Fraud Initiative. This post summarizes key settlements of interest to healthcare providers and government contractors.
Continue Reading False Claims Act Settlements to Know from Q1 2022
Each year, the Department of Justice (DOJ) recovers millions of dollars through False Claims Act (FCA) settlements, and 2021 was no exception. Some of the most sizeable or otherwise noteworthy settlements from 2021 were with hospitals and health systems. We’ve summarized a few below.
Continue Reading 2021 Recap: Hospitals’ Significant False Claims Act Settlements
Although this blog focuses mainly on the federal False Claims Act (FCA), other antifraud statutes feature in the qui tam relator and government enforcement toolkit. Key among them: the California Insurance Frauds Prevention Act (IFPA).
Continue Reading The California Insurance Frauds Prevention Act: What to Know About California’s Powerful Commercial Health Insurance Fraud Statute
The False Claims Act (FCA) prohibits employers from retaliating against whistleblowers who report FCA violations. 31 U.S.C. § 3730(h). To plead a claim under this anti-retaliation provision of the FCA, an employee must show the following three elements:
- The employee engaged in protected activity.
- The employer knew the employee engaged in protected activity.
- The employer took an adverse action against the employee as a result of the employee’s protected activity.
Courts state and apply these basic elements slightly differently, and this post examines three rulings from district courts across different circuits at the end of last month.
Vaughn v. Harris County Hospital District
On September 29, the District Court for the Southern District of Texas adopted the memorandum and recommendation of the magistrate judge denying the motion to dismiss a former employee’s retaliation claim, holding he satisfied his pleading requirements.Continue Reading Trio of False Claims Act Retaliation Rulings from September
Texas-based hospital chain Tenet Healthcare Corporation and two of its Atlanta-area hospitals, Atlanta Medical Center and North Fulton Hospital, have agreed to pay more than $513 million to resolve civil and criminal claims related to violations of the federal False Claims Act (FCA) and Anti-Kickback Statute (AKS). Settlement of the underlying cases, which are styled U.S. ex rel. Williams v. Health Management Associates Inc., No. 3:09-cv-00130 (M.D. Ga.) and U.S. v. Atlanta Medical Center, Inc. No. 16-cr-00350 (N.D. Ga), are one of the largest FCA and AKS settlements this year.
On October 3, 2016, the United States filed a bill of information charging Atlanta Medical and North Fulton with one count of conspiracy to defraud the United States and pay and receive kickbacks and bribes. The government alleged that, from 2000 to 2013, Atlanta Medical and North Fulton paid prenatal clinics providing medical services to women (many of whom were undocumented, uninsured and indigent) for referrals for labor and delivery, postnatal, and infant services. According to the government, business documents show that these referrals resulted in “extremely generous” Medicaid reimbursements and a profitable relationship between the hospitals and the clinics.
Continue Reading Tenet Healthcare Settles FCA and AKS Allegations for $513 Million
On July 28, 2016, the Department of Justice announced a $17 million settlement in the matter of United States ex rel. Hammett v. Lexington County Health Services District, Case No. 3:14-cv-03653 (D. S.C.).1 The lawsuit resolved allegations that Lexington County Health Services District, Inc. d/b/a Lexington Medical Center (“LMC”) in West Columbia, SC violated the Stark Law and False Claims Act by acquiring physician practices or employing twenty-eight (28) physicians on terms that were in excess of fair market value and on terms that were not commercially reasonable.
The case was filed on September 15, 2014, and DOJ declined to intervene on September 16, 2015. Relator then continued with the case, resulting in the recently announced settlement. As part of the settlement, LMC also entered into a Corporate Integrity Agreement with the Department of Health and Human Services-Office of the Inspector General.Continue Reading SC Hospital Pays $17 Million to Resolve FCA Claims of Improper Physician Employment Relationships
DOJ recently reached settlements in connection with three long running enforcement efforts, amassing more than $1 billion in settlement funds. These settlements reflect the continued expansion of aggressive government enforcement in the healthcare industry. Since January 2009, DOJ claims recovery of more than $16.2 billion in healthcare-related FCA cases alone.
Swiss pharmaceutical company Novartis AG agreed to pay $390 million to settle allegations that it provided unlawful rebates to specialty pharmacies to boost prescription refills for Novartis products. While Novartis did not admit that these rebates constituted illegal kickbacks, it did acknowledge providing rebates to three specialty pharmacies to incentivize an increase of prescription refills. This settlement comes at the conclusion of Novartis’ five-year CIA resulting from a settlement with DOJ in 2010. As part of its latest settlement, Novartis has agreed to extend its CIA for an additional five year period. Additionally, Novartis has agreed to amend its CIA to include obligations covering the company’s interactions with specialty pharmacies and to provide an annual report to DOJ detailing Novartis’ compliance with the CIA.Continue Reading Recent FCA Settlements Bring Closure to Long Running Enforcement Efforts