In United States ex rel. Roshan v. E. Tex. Med. Ctr., 2020 U.S. Dist. LEXIS 252092, 2020 WL 8918651 (E.D. Tex. (Nov. 24, 2020)), a Texas federal court partially dismissed a relator’s claim alleging the defendants engaged in various billing and referral practices that violated the False Claims Act (FCA), the Stark Law, and Anti-Kickback Statute (AKS). While dismissing certain of the relator’s claims for failure to plead with the requisite particularity, the court allowed the case to proceed on the allegations concerning a single practice purchase compensating the seller for “future referrals” and pressure on the employee relator himself to refer more hospital-based procedures. This case serves as reminder that healthcare providers should always be cautious when discussing patient referrals, particularly when negotiating financial arrangements with physicians.
In U.S. ex rel. Sonyika v. ApolloMD, Inc. et al., 2021 WL 1222379 (N.D. Ga. Mar. 31, 2021), a Georgia federal court allowed a relator’s Amended Complaint alleging a fraudulent scheme involving improper billing for services rendered by Advanced Professional Practitioners (APP) in violation of the False Claims Act (FCA) and the Georgia-equivalent to proceed. The court found that the relator’s personal experience as a participant in the alleged billing scheme provided adequate indicia of reliability with respect to his “presentment claim” and his “use claim” under the FCA and claim under the Georgia State False Medicaid Claims Act that the defendants caused increase reimbursement for APP services in emergency rooms than should have been billed. On the other hand, the court dismissed claims related to violation of the AKS and non-Georgia false claims statutes.
The Centers for Medicare & Medicaid Services (CMS) recently announced 2020 settlements concerning past violation or potential violations of the physician self-referral law (the Stark Law) and the number and value of such settlements have returned to the pre‑2019 trends. The 2020 settlements based on voluntary submissions submitted several years ago mark an increase from 2019’s report when CMS announced the lowest aggregate settlement dollars collected since the Stark Law disclosure’s first year in 2011. We speculated last year that such decrease could continue in 2020 as the agency’s attention focused on the 2019 novel coronavirus (COVID-19). That said, as shown on the first chart below, CMS doubled its 2019 settlement numbers, and, as shown on the second chart, announced the greatest aggregate settlement dollars collected since reaching aggregate value that peaked in 2016.
“Pleading the Fifth” is one of the most commonly known phrases in the U.S. legal system, and the right against self-incrimination is one of the Constitution’s most meaningful protections. That said, the costs and risks of exercising that right in the corporate fraud context may outweigh the benefits.
To learn about some of the limits and potential high costs that invoking this protection could mean for companies — particularly federal government contractors, see our post on the Subject to Inquiry blog.
In a recent opinion from the United States Court of Appeals for the Sixth Circuit, the court analyzed several alleged points of error from a criminal jury trial about a healthcare kickback scheme. See United States v. Trumbo, No. 20-1393, __ F. App’x __, 2021 WL 957337 (6th Cir. March 15, 2021). The opinion is significant because it gives insight into how an appellate court will approach contested issues on appeal after a rare criminal jury trial.
On April 8, the U.S. Attorney’s Office for the District of South Carolina announced a $22.5 million settlement with a network of urgent care providers and its management company for alleged False Claims Act violations related to credentialing issues.
For more details about this settlement, which reminds healthcare providers that even where patient care is not compromised, a blatant pattern of record-keeping, licensing, certification, credentialing and other administrative errors can still lead to significant FCA risks, visit our blog Subject to Inquiry.
After granting defendants’ motion to dismiss and dismissing plaintiff’s action with prejudice, the U.S. District Court for the Middle District of North Carolina recently denied relator’s motion to alter or amend the judgment and file an amended complaint alleging Anti-Kickback Statute (“AKS”) and False Claims Act (“FCA”) violations. Central to the court’s decision to deny the motion in United States v. Medcom Carolinas, Inc., No. 1:17-CV-34, 2021 WL 981240 (M.D.N.C. Mar. 16, 2021) was plaintiff’s continued inability to: (1) provide a representative example of a false claim that had been submitted to the government for payment; and (2) connect remuneration being paid with any claims that were submitted
In an April 7, 2021, interview with Federal News Network, Washington, D.C., partner Michael Podberesky discussed how federal contractors are impacted by the U.S. Supreme Court’s recent decisions denying two petitions for writs of certiorari, thereby declining to resolve a circuit court split regarding the False Claims Act’s standard for pleading and proving the falsity element.
Because of the conflicting appellate court decisions, healthcare providers and government contractors “need to be vigilant because depending on what jurisdiction you’re in, you could have a varying standard for assessing certification decisions,” Podberesky noted. “Companies should ensure they have a robust compliance function,” he continued, “and part of that compliance function is auditing the certification process to make sure the certifications [pertinent to a claim] are supported by data in the records and are completed in an appropriate manner.”
Podberesky and McGuireWoods’ Todd Steggerda, David Pivnick, John Moran, Lawrence Cameron, Brandi Howard and Jason Vespoli addressed this topic in a March 8, 2021, post on the firm’s Subject to Inquiry blog titled “U.S. Supreme Court Declines to Clarify False Claims Act Falsity Standard.”
As previously discussed, on April 3, 2020, the U.S. Department of Health and Human Services Office of Inspector General (OIG) issued a process for inquiries to be submitted to OIG about whether administrative enforcement discretion would be provided for certain arrangements directly connected to the 2019 novel coronavirus (COVID-19). OIG established this process to provide regulatory flexibility to ensure necessary care responding to COVID-19, particularly with respect to the federal anti-kickback statute (AKS) and civil monetary penalty (CMP) beneficiary inducement prohibition provisions. OIG responses are publicly available through a frequently asked questions (FAQ) posting on the OIG COVID-19 portal. OIG has continued to update this FAQ since its initial publication, including the most recent inquiry discussed in our March 22 post, and also providing guidance on the following question:
Can a federally qualified health center (FQHC) with a location in a rural area provide free space to a retail pharmacy that administers COVID-19 vaccinations to FQHC patients and the general public (including Federal health care program beneficiaries)?
In U.S. ex rel. Manieri v. Avanir Pharmaceuticals, Inc., 2021 WL 857102 (N.D. Oh. Mar. 8, 2021), the Northern District of Ohio dismissed a relator’s claim that he had been improperly retaliated because he had raised concerns about alleged fraudulent conduct involving speaker fees under the False Claims Act (FCA) and the Federal Anti-Kickback Statute (AKS). Manieri serves as a helpful reminder of the high standard for pleading a retaliation claim under the FCA.