In addition to the most common grounds upon which dismissal is sought in FCA actions, Mount Sinai Hospital and Mount Sinai Radiology Associates recently requested that the district court throw out FCA claims based on their argument that relators relied on improperly obtained patient records in support of their allegations.  Relators, who were employed in various positions with defendants, alleged FCA violations based upon false and fraudulent billing in connection with physician services and attached patient medical records to their complaint in support of their FCA claims. Defendants argued that relators should be precluded from relying on the medical records attached to their complaint because allegedly relators obtained those records without authorization following an internal investigation at the Hospital.  Relators countered that there were no facts before the district court to support any assertion that the medical records were obtained improperly and cited HIPAA’s exception for whistleblowers to reveal information to government authorities and private counsel if those whistleblowers have a good faith belief that their employer engaged in unlawful conduct.
Continue Reading Relator’s Use of Medical Records Insufficient to Warrant Dismissal of FCA Complaint

On October 16, 2015, Tuomey Healthcare agreed to pay more than $74 million to resolve a $237 million judgment in a long-standing FCA matter that had threatened to bankrupt the nonprofit hospital. The action, styled U.S. ex rel. Drakeford v. Tuomey Healthcare Systems, Inc., No. 05-2858 (D.S.C.), involved FCA allegations that Tuomey employed and

What do the recent multimillion dollar FCA settlements tell healthcare providers about physician compensation arrangements? Standing alone, these settlements are cautionary examples of arrangements that may subject hospitals and physicians to increased scrutiny. These settlements, however, come on the heels of the recent OIG fraud alert – “Physician Compensation Arrangements May Result in Significant Liability,”

In a welcomed move, CMS has proposed changes to the federal physician self-referral law (Stark Law) designed to improve consistency and interpretability and alleviate the number of technical violations leading to self-disclosures. This move is in stark (pun-intended) contrast to the stringent interpretation of the Stark Law by the Fourth Circuit in its decision in

On March 31, 2015, DOJ announced a $10 million settlement with Robinson Health System Inc. (Robinson), a nonprofit operator of 10 Northeast Ohio healthcare facilities, including Robinson Memorial Hospital.

The settlement, announced a day before Robinson finalized a transaction involving its flagship hospital, stems from a June 2014 self-disclosure to the U.S. Attorney for the Northern District of Ohio, in which Robinson disclosed questionable financial relationships under Stark and the AKS, some dating back nearly 10 years, with more than 30 referring physicians. This self-disclosure stemmed from a due diligence review conducted while searching for a partner health system.Continue Reading Ohio Health System’s Self-Disclosure Leads to $10 Million FCA Settlement

On February 25, 2015, the Sixth Circuit reversed a district court’s decision to dismiss FCA allegations pursuant to the FCA’s public disclosure bar because the “publicity” aspect of the public disclosure bar was not satisfied.   The Sixth Circuit’s opinion became the most recent appellate decision to require disclosure beyond the government or the government’s agents or contractors to implicate the public disclosure bar.

In U.S. ex rel. Whipple v. Chattanooga-Hamilton County Hosp. Authority, OIG instituted an audit of the defendant’s billing practices in response to an anonymous complaint.  That audit led to a subsequent investigation by OIG, during which it consulted with the DOJ.  In 2009, the defendant resolved the matter through a refund to the government, and the government declined to pursue the matter further.Continue Reading Sixth Circuit Addresses the “Public” Aspect of the Public Disclosure Bar