A qui tam False Claims Act (FCA) complaint was recently unsealed against Cerebral, a telehealth startup that provides virtual mental-health therapy, in the U.S. District Court for the Northern District of Iowa.  

Why it matters: The lawsuit is an example of the continued scrutiny companies face from the government and private whistleblowers related to telehealth prescriptions for controlled substances.

  • The government has investigated telehealth providers for their prescribing practices during the COVID-19 pandemic.
  • Although the government declined to intervene in this case, telemedicine prescriptions remain an area of focus for government regulators and would-be FCA relators.

Digging deeper: The relator, a former Cerebral practitioner, alleges that Cerebral violated the FCA and the federal Anti-Kickback Statute (AKS) by offering to reimburse the cost of her Drug Enforcement Administration (DEA) registration if she prescribed a specified and excessive number of controlled substances to patients.

  • The relator alleges that Cerebral sought reimbursement from federal healthcare programs for prescriptions it knew were tainted by these alleged AKS violations.
  • The complaint was filed in June 2022, and in October 2023 the government declined to intervene.
  • As of this writing, Cerebral has not responded to the complaint.

Further coverage: For more information on these topics, see our articles below and subscribe to this blog.

If you have questions about how regulations related to telehealth services may affect your business, please contact the authors.

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Photo of Hannah Choate Hannah Choate

Hannah Choate advises clients related to government and internal investigations, with a particular focus on fraud and abuse matters in the healthcare industry. Hannah works with clients to respond to allegations of healthcare fraud and abuse from various regulators, including the Office of…

Hannah Choate advises clients related to government and internal investigations, with a particular focus on fraud and abuse matters in the healthcare industry. Hannah works with clients to respond to allegations of healthcare fraud and abuse from various regulators, including the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS), the Department of Justice (DOJ), and various United States Attorneys’ Offices.

Photo of Brian Irving Brian Irving

Brian Irving represents businesses and individuals in complex litigation and government investigations, focusing on healthcare fraud, securities fraud, and business disputes. Brian’s clients span a variety of industries, including healthcare, pharmaceuticals, government contracting, and financial services. Brian has successfully represented clients in federal…

Brian Irving represents businesses and individuals in complex litigation and government investigations, focusing on healthcare fraud, securities fraud, and business disputes. Brian’s clients span a variety of industries, including healthcare, pharmaceuticals, government contracting, and financial services. Brian has successfully represented clients in federal and state courts at both the trial and appellate levels, and in arbitrations and other forms of alternative dispute resolution.