The Ninth Circuit affirmed the district court’s dismissal of a relator who pleaded guilty to a felony that involved the same fraudulent conduct that gave rise to the relator’s qui tam suit in U.S. ex rel. Schroeder v. CH2M Hill. The FCA’s § 3730(d)(3) requires dismissal of a relator from a qui tam lawsuit and precludes the relator from any recovery in the lawsuit, “[i]f the relator has been convicted of criminal conduct arising from his or her role in the violation of section 3729.” In Schroeder, the Ninth Circuit concluded that this provision applied even to minor participants in the underlying alleged misconduct, who neither planned nor initiated the fraudulent scheme.

The relator, who was employed by the defendant government contractor, was involved in an underlying fraudulent scheme to bill the Department of Energy (DOE) by submitting false time cards to DOE for hourly work. After his interview by investigators, the relator pleaded guilty to a felony count of conspiracy to commit fraud. After his interview, but before pleading guilty, the relator filed suit under the FCA against his employer concerning the DOE fraud scheme. The United States intervened and moved to dismiss the relator from the lawsuit under § 3730(d)(3) as a result of his felony conviction.

Continue Reading Ninth Circuit Takes Hard Line against Relators Involved in FCA Wrongdoing

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 U.S. ex rel. Drakeford v. Tuomey Healthcare System, Inc., earlier this month. Given these sizable developments, what has changed and what are the implications for the healthcare industry?  Our recent article discusses the Fourth Circuit’s opinion and what is to come for healthcare providers navigating the Stark Law.

The D.C. Circuit reversed the district court’s dismissal of a serial relator’s qui tam lawsuit under the FCA’s first-to-file bar in U.S. ex rel. Heath v. AT&T, Inc., finding that the relator’s two qui tam lawsuits targeted factually distinct types of frauds. The D.C. Circuit further determined that the relator’s qui tam lawsuit satisfied the pleading requirements of Rule 9(b).

Continue Reading D.C. Circuit Reverses District Court Dismissal of Qui Tam Lawsuit

The False Claims Act (FCA) is just one of the handful of federal laws that government contractors must adhere to or they run the risk of prosecution by a federal agency, such as the DOJ or SEC. As cited in an article I recently co-authored, “[t]he civil penalty for FCA violations can be significant, with payments ranging from three times the damages incurred by the government, plus fines of $5,500, to $11,000 for each false claim that is filed or caused to be filed.”

In the article written with Bryan King and Robert Platt that was published by Westlaw Journal – Government Contracts, we outline the best practices a government contractor should follow during an internal investigation to obtain reliable findings and maintain credibility with government enforcement agencies.

The full article, “Contractors in the Crosshairs: Investigations Passing Government Scrutiny,” was published June 22 by Westlaw Journal – Government Contract and is available in the PDF.

Last month, the Sixth Circuit affirmed sanctions imposed by a district court against a relator and his counsel for bringing a frivolous False Claims Act (“FCA”) action. The ruling in United States ex rel. Jacobs v. Lambda Research, Inc., No. 14-3705, 2015 WL 1948247 (6th Cir. May 1, 2015) is a positive development for companies that have faced an increase in FCA actions in recent years. It also illustrates the use of a sanctions provision that is specific to FCA claims. Read the full analysis on the GovCon blog post “Relators Beware – Sanctions Upheld for “Vexatious” False Claims Act Suit.”

In a long-awaited ruling, the Supreme Court held that the Wartime Suspension Limitations Act (WSLA) does not toll the statute of limitations in civil FCA actions, as the WSLA applies only to criminal actions.  After lying dormant for more than 40 years, the WSLA had threatened to upend the FCA’s limitations period and expose defendants to open-ended and extensive liability for otherwise stale FCA claims.

Amended in 2008, the WSLA provides that the statute of limitations applicable to any offense involving fraud against the United States during a time of war or when Congress has enacted a specific authorization for the use of military force is suspended until five years after the termination of hostilities.  In a number of recent cases, relators had begun relying on the WSLA as a means to avoid dismissal of claims brought outside of the FCA’s limitations period.

Continue Reading Supreme Court Limits WSLA to Criminal Offenses

Employee severance packages and settlement agreements often include a broad waiver of any claims, known or an unknown, which an employee may have against the company.  Although such broad pre-filing releases are highly recommended, companies doing business with the government should be cautioned that these waivers do not always protect against False Claims Act (FCA) litigation.  A line of federal cases has established that these so-called “pre-filing releases” are sometimes unenforceable against suits filed by whistleblowers, or qui tam actions, for public policy reasons.

Continue Reading Enforceability of Employee Releases on Qui Tam Actions

Is late package delivery considered an FCA liability for government contractors? Bass, Berry & Sims attorneys analyzed the recent settlement between United Parcel Service Inc.’s (UPS) and the Department of Justice (DOJ) resolving allegations that UPS submitted false claims to the federal government related to the timeliness of package delivery. This case shows the range of conduct that can be considered when not satisfying the terms of a government contract. Read the full analysis on the GovCon blog post “UPS Settles Alleged FCA Violations for Failing to Deliver (On Time).”

Matt Curley, John Kelly and Shuchi Parikh authored an article outlining the dangers of data misreporting for Medicare Advantage organizations and Medicare prescription drug plans. The article identifies areas of potential liability to help organizations avoid enforcement activity related to fraud and abuse allegations.

The article, “Data Misreporting Risks for Medicare Advantage and Prescription Drug Plans,” was published by Managed Healthcare Executive.

The U.S. District Court for the Middle District of Florida issued yet another opinion endorsing the use of statistical sampling in FCA cases. In its April 28, 2015 opinion in United States ex rel. Ruckh v. Genoa Healthcare, LLC., the district court held that the relator could use expert testimony of statistical sampling to establish FCA violations concerning claims submitted by defendants’ skilled nursing facilities.

The relator alleged that the defendants violated the FCA by falsifying reports summarizing patients’ medical conditions and the treatment provided to those patients. Relator further alleged fraud by the defendants who allegedly allowed unauthorized individuals to submit reports to CMS. After the defendants’ motions to dismiss the complaint were denied, the relator moved to admit expert testimony on statistical sampling due to the “voluminous discovery” and the impossibility of “producing and processing the relevant medical records at the fifty-three medical facilities and some fifty-three off-site storage locations within a reasonable time.” DOJ, which did not intervene in the case, filed a statement of interest in support of statistical sampling.

Continue Reading Another District Court Endorses Statistical Sampling

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

Thought Leadership by our Attorneys.