The FCA Insider

The FCA Insider

Insights and updates on False Claims Act Litigation

DOJ

Deputy Attorney General Monaco Announces New DOJ Whistleblower Program

At the American Bar Association’s 39th National Institute on White Collar Crime on March 7, U.S. Deputy Attorney General Lisa Monaco provided updates on criminal enforcement efforts and announced new Department of Justice initiatives, including a new whistleblower program.

Read on for key insights into the DOJ’s recent efforts and developments in its enforcement strategy.

Anti-Kickback Statute

Off-Label “Free Speech” Theory Does Not Fly for Convicted Former Medical Device Executives in 1st Circuit

A federal appeals court recently upheld misdemeanor convictions of two former executives of Acclarent Inc, a medical device manufacturer, for commercially distributing an adulterated and misbranded medical device by misleading the FDA regarding the intended use of the device.  In United States v. Facteau (89 F.4th 1 (1st Cir. 2023)) the First Circuit Court of Appeals rejected the duo’s claims that their off-label promotion amounted to constitutionally protected commercial speech, a legal theory that has previously gained some traction following the 2012 Second Circuit Court of Appeals decision in United States v. Caronia.  

Continue Reading

OIG, Regulatory

OIG’s New Compliance Guidance: 10 Action Items and Six Themes for Providers

On Nov. 6, 2023, the U.S. Department of Health and Human Services Office of Inspector General (OIG) issued its General Compliance Program Guidance for healthcare providers and other industry stakeholders. The guidance follows OIG’s previous announcement about a modernization initiative and signifies a major update to OIG’s prior approach to providing guidance on effective compliance programs.

Read on for actionable steps healthcare providers should consider implementing in 2024, as well as key themes derived from the OIG document that should guide compliance efforts.

Anti-Kickback Statute

Life Sciences Companies Face Continuing Compliance Challenges in Developing Value-Based and Value-Added Models

The U.S. Department of Health and Human Services Office of Inspector General recently issued Advisory Opinion 23-08, continuing its long-held position that the provision of value-added items and services implicates fraud and abuse laws, including the Federal Anti-Kickback Statute and the Beneficiary Inducement Civil Monetary Penalty law.

Read on to learn how manufacturers, distributors, and other life sciences companies that seek to improve outcomes by providing value-added items and services to their customers continue to face challenges in developing compliant models.

Anti-Kickback Statute, FCA Litigation

A Failed Constitutional Challenge to the AKS Safe Harbor Provision – More to come?

This past summer, in United States v. Booker, a North Carolina district court ruled against a challenge to the constitutionality of Congress’s delegation of authority to promulgate safe harbors to the Anti-Kickback Statute (AKS). In filing a motion for acquittal, Defendant Donald Booker argued the AKS “Safe Harbor Provision,” which grants the Secretary of Health and Human Services (HHS) the authority to exempt certain conduct from the “illegal remuneration” prohibitions of the AKS, violates the nondelegation doctrine. While Booker’s argument may appear paradoxical as, if successful, he would be prosecuted under the AKS without the protection of this safe harbor, the case raises an interesting example of a constitutional challenge to the AKS, which we may see more to come directly or with the FCA in the new year.

Continue Reading

Anti-Kickback Statute, FCA Litigation

The Growing Causal Divide: But-For Causation in AKS/FCA Actions

In United States v. Regeneron, the District of Massachusetts Court recently joined the Sixth and Eighth Circuits in requiring the government to show a direct tie between kickbacks and referrals that proximately caused claims to federal healthcare programs to prevail in Anti-Kickback Statute (AKS) and False Claims Act (FCA) actions. The District Court’s ruling contributes to the growing split between the Third Circuit, which requires a mere causal connection between kickbacks and referrals, and the Sixth and Eighth Circuits, which require but-for causation between the kickback and the federal claim. This split relates to the per se fraud clause added to the AKS in 2010, which provides “a claim that includes items or services resulting from a violation of this section constitutes a false or fraudulent claim” for purposes of the FCA. The specific causal connotation of the language “resulting from” is the core of the debate between circuits.

Continue Reading

Anti-Kickback Statute, FCA Litigation, Settlements

$12M Default Judgment Results from Purchasing Prescriptions

A large damage award serves as a significant reminder to file an appearance in a False Claims Act (FCA) case.

In late August of 2022, the Government filed suit against AZ Diabetic and the owner, Hisham Zaghal (Zaghal), in the Eastern District of Virginia, alleging violations under the False Claims Act (FCA), stemming from over $600,000 in reimbursement claims related to prescriptions that AZ Diabetic illegally purchased. After AZ Diabetic failed to file an appearance, the Government moved for default judgment, which was entered by the Court. As a result, AZ Diabetic was liable for just over $12 million in civil penalties and treble damages under the FCA for violations of the Anti-Kickback Statute (AKS).

Continue Reading

Anti-Kickback Statute, FCA Litigation, OIG, Regulatory

Lessons for Providers and Practice Entities: Ophthalmology Groups Pay Millions to Settle Co-Management, Optometrist Relationship Allegations

Two ophthalmology practice groups recently reached settlements with the U.S. government totaling nearly $20 million to resolve allegations that their third-party cataract arrangements violated several healthcare laws.

Read on to discover how the settlements offer guidance to vision providers with respect to the government’s focus on ophthalmology-optometry relationships, and whether the settlements’ lessons have broader applicability to providers and practice entities.

Anti-Kickback Statute, OIG, Regulatory

HHS Advisory Opinion Approves Profit-Based Bonus Plan for Bona Fide Physician Employees

On Oct. 13, the U.S. Department of Health and Human Services Office of Inspector General issued an advisory opinion approving a physician practice’s proposal to pay bonuses to each of its employed physicians based on net profits derived from the facility fee generated by procedures the physician performed at the practice’s ambulatory surgery center.

Read on for analysis of this opinion and how the proposed arrangement avoids implicating the federal Anti-Kickback Statute.

DOJ, FCA Litigation, Settlements

DOJ Settles Self-Reported Referral Incentives With Dermatology Practice Manager

On Sept. 13, the U.S. Attorney’s Office for the Northern District of Texas announced a settlement with Oliver Street Dermatology Management LLC to resolve self-reported allegations that its acquisition of several dermatology practices violated the Stark Law, the Anti-Kickback Statute and the False Claims Act.

Read on for details about this matter, plus helpful guidance for considering fraud and abuse rules in acquisition strategies.

We use cookies to enhance your experience of our website. By continuing to use this website, you agree to the use of these cookies. For more information and to learn how you can change your cookie settings, please see our policy.

Agree