The U.S. Court of Appeals for the Fifth Circuit vacated a $663 million judgment, concluding that the Supreme Court’s opinion in Escobar doomed the plaintiff’s FCA claims on the issue of materiality.

FCA Allegations: Highway Guardrail Systems Had Unapproved Design Modifications

Trinity Industries, a manufacturer of highway guardrail systems, faced FCA allegations brought by a former competitor based on the theory that federally subsidized purchases of Trinity’s guardrail systems resulted in false claims as a result of unapproved design modifications. Prior to the filing of the relator’s qui tam lawsuit, the relator met extensively with Federal Highway Administration (FHWA) officials during which he presented his allegations regarding the design modifications and his assertions that those modifications rendered Trinity’s guardrail systems ineligible for federal reimbursement. FHWA met separately with Trinity to discuss the relator’s allegations. Following those meetings, FHWA confirmed that state purchases of the Trinity guardrail system were eligible for federal reimbursement notwithstanding the design modifications.

Continue Reading Fifth Circuit Relies on Escobar in Vacating $663 Million FCA Judgment

Background

The U.S. District Court for the Central District of California recently dismissed a complaint-in-intervention filed by the U.S. Department of Justice (DOJ) in U.S. ex rel. Swoben v. Secure Horizons.  As previously reported, in this significant test case, DOJ filed its complaint on May 1, 2017, as to the UnitedHealth Group parties (collectively, UnitedHealth), marking the first time that DOJ joined a whistleblower suit alleging FCA violations regarding Medicare Advantage.  The complaint alleged that the “risk adjustment” payments, which account for the severity of patient conditions as compared to an average Medicare fee-for-service beneficiary, were boosted by ignoring questionable diagnoses.

Continue Reading Dismissal of Medicare Advantage FCA Suit Marks Significant Defeat for Government

On August 18, 2017, the U.S. Court of Appeals for the Sixth Circuit reversed the denial of a FCA defendant’s request for attorney’s fees and expenses under the Equal Access to Justice Act (EAJA) and held the government accountable for an unreasonable damages demand.

Background

In U.S. ex. rel. Wall v. Circle C Construction, LLC, a subcontractor for the defendant, Circle C Construction, failed to pay $9,900 in wages for electrical work performed in the construction of warehouses. The subcontractor’s paid wages thus failed to meet the requirements of the Davis-Bacon Act. As a result, Circle C Construction’s subsequent statements of compliance with federal regulations, including the Davis-Bacon Act, were false.

Continue Reading Sixth Circuit Reverses Denial of Attorney’s Fees and Expenses, Maintains Cost Recovery for Unreasonable Government Demands

The FCA provides protections for whistleblowers in connection with their whistleblowing activities.  To establish that an employer retaliated against an employee in violation of 31 U.S.C. § 3730(h), an employee must demonstrate that:

  1. The employee engaged in protected activity.
  2. The employer knew that the employee was engaged in protected activity.
  3. As a result of the above, the employee was discriminated against.

Definition of FCA Retaliation “Protected Activity”

Prior to 2009, “protected activity” was defined as employee conduct “in furtherance of an action under this section, including investigation for, initiation of, testimony for, or assistance in an action filed or to be filed under this section.”

Continue Reading FCA Deeper Dive: FCA Retaliation Claims

Over the past five years, recoveries from False Claims Act cases have surpassed $22 billion, with more than half coming from the healthcare industry alone. Our attorneys help companies from all sectors of healthcare navigate enforcement and compliance issues related to Healthcare Fraud and Abuse. Watch this video to find out why healthcare executives nationwide turn to Bass, Berry & Sims when faced with fraud and abuse issues.

Learn more about Bass, Berry & Sims’ Healthcare Fraud and Abuse Practice at www.bassberry.com/healthcare-fraud.

The FCA continues to be the federal government’s primary civil enforcement tool for investigating allegations that healthcare providers or government contractors defrauded the federal government. In the coming weeks, we continue to take a closer look at recent legal developments involving the FCA. This week, we examine judicial review of FCA settlements and recent cases considering this issue.

In U.S. ex rel. Michaels v. Agape Senior Cmty., Inc., the Fourth Circuit considered the scope of DOJ’s authority to review and ultimately veto a settlement reached by relators and the defendants.  The panel had little difficulty affirming the district court’s determination that DOJ’s veto authority in this regard is unreviewable.

Continue Reading FCA Deeper Dive: Judicial Review of Settlements

The FCA continues to be the federal government’s primary civil enforcement tool for investigating allegations that healthcare providers or government contractors defrauded the federal government. In the coming weeks, we continue to take a closer look at recent legal developments involving the FCA. This week, we examine developments regarding penalties and damages under the FCA, which make the FCA such a potent enforcement tool for the government.

For providers facing potential FCA liability, the potential scope of exposure will continue to expand, whether driven by a nearly doubled increase in the penalties recoverable under the FCA, large negotiated settlements backed-up by statistical extrapolation of false claims, or the significant increase in relator-driven litigation in government-declined cases. Questions regarding the manner in which FCA damages should be calculated also are likely to persist.

Continue Reading FCA Deeper Dive: Developments Regarding Penalties and Damages

The FCA continues to be the federal government’s primary civil enforcement tool for investigating allegations that healthcare providers or government contractors defrauded the federal government. In the coming weeks, we continue to take a closer look at recent legal developments involving the FCA. This week, we examine the FCA’s first-to-file rule and its impact on a relator’s right to pursue FCA claims.

Continue Reading FCA Deeper Dive: FCA’s First-to-File Bar

A unanimous panel of the U.S. Court of Appeals for the Eleventh Circuit (Eleventh Circuit) recently affirmed two grants of summary judgment in favor of defendant Lincare, Inc. d/b/a Diabetic Experts of America (collectively, “Diabetic Experts”) by the U.S. District Court for the Southern District of Florida (District Court).  Diabetic Experts provided diabetic supplies to Medicare patients, some of whom had previously ordered medical supplies from Diabetic Experts for chronic obstructive pulmonary disease (COPD).  To promote sales, staff at Diabetic Experts would place calls to individuals who had previously ordered COPD-related equipment regarding a need for diabetic supplies.

Continue Reading Eleventh Circuit Affirms Two Grants of Summary Judgment in Favor of Diabetic Experts

The FCA continues to be the federal government’s primary civil enforcement tool for investigating allegations that healthcare providers or government contractors defrauded the federal government. In the coming weeks, we continue to take a closer look at recent legal developments involving the FCA. This week, we examine the FCA’s public disclosure bar and recent cases considering whether disclosures are sufficient to bar FCA claims.

The FCA’s public disclosure bar prevents a relator from filing a qui tam complaint based on information previously disclosed to the public, thereby dissuading parasitic lawsuits based on publicly available information. In cases considering the scope of the public disclosure bar, courts have continued to examine the issue of how or to whom information must be disseminated in order to constitute a “public disclosure,” which often has resulted in a narrowing of the public disclosure bar’s scope in a given case. Such cases marked a shift away from decisions favorable to FCA defendants toward a more nuanced and specific application of the public disclosure bar.

Continue Reading FCA Deeper Dive: Original Sources under the FCA’s Public Disclosure Bar

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

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