The FCA Insider

The FCA Insider

Insights and updates on False Claims Act Litigation

Anti-Kickback Statute

District Court Adopts Middle of the Road Approach in Determining Causation in Anti-Kickback Statute-Based False Claims Act Case

The U.S. District Court for the District of Maryland recently weighed in on the appropriate causation standard when evaluating whether a claim “result[s] from” a violation of the Anti-Kickback Statute sufficient to constitute a false or fraudulent claim for purposes of the False Claims Act. In U.S. ex rel. Fitzer v. Allergan, Inc., the court adopted a middle of the road approach under which a causal link between the remuneration and the claim is required, but a showing that the remuneration succeeded in producing the prescription is not.

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FCA Defenses

COVID Nursing Home Patient Safety Failures Not Actionable under FCA in New York

In Conte v. Kingston NH Operations LLC, 2022 U.S. Dist. LEXIS 21686, *1, 2022 WL 356753, a New York District court granted a defendant’s motion to dismiss an employee’s false claims allegations under the False Claims Act (the “FCA”) and the New York False Claims Act (the “NYFCA”). The case stemmed from allegedly improper patient care and workspace safety during the COVID-19 pandemic, which the plaintiff brought against a New York nursing home operator under both the FCA and NYFCA. Despite multiple alleged COVID-related deaths and demonstrated care issues that the court acknowledged were present, the court dismissed the case as such allegations were not actionable under these fraud and abuse statutes.

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Anti-Kickback Statute

District Court finds that AKS Violations are Per Se Material

Last month, the Central District of California granted the government’s affirmative motion for partial summary judgment in U.S. v. Reliance Medical Sys., 2022 WL 524062 (C.D. Cal. Feb. 2, 2022).  The Reliance Medical case involved an FCA action based on a theory that certain physician-owned distributorships (PODs) violated the Anti-Kickback Statute (AKS).  As detailed below, the Central District found – in accordance with the substantial majority of other courts – that violations of the AKS are material under the FCA.

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FCA Litigation

Largest-Ever Small-Business Contracting Fraud Settlement Related to Pass-Through Subcontracting

Federal contractors should take note of a $48.5 million False Claims Act settlement between the Department of Justice and TriMark USA LLC — the largest-ever FCA settlement based on allegations of small-business set-aside contracting fraud. DOJ alleged that TriMark had a plan to circumvent specific small-business contracting requirements by providing significant assistance to three small companies — distributors and resellers for TriMark products — in obtaining set-aside contracts they would pass along to TriMark for performance.

Read on to learn why manufacturers, suppliers, developers and distributors that closely influence and control their distribution networks and reseller partners should take note of this settlement and ensure they have adequate compliance policies and procedures in place to avoid similar conduct allegations and repercussions.

DOJ

Eye Care Practice Settles with Government for Employing Excluded Individual

On March 18, the Department of Justice (“DOJ”) and the Connecticut Attorney General announced that a Connecticut eye care practice and its owners had agreed to pay $192,699 to resolve allegations that the practice improperly employed an individual who was excluded by the Department of Health and Human Services’ Office of Inspector General (“OIG”) from federal health care programs. Continue Reading

DOJ

DOJ Announces First False Claims Settlement Since Launch of Civil Cyber-Fraud Initiative

On March 8, the U.S. Department of Justice announced a $930,000 settlement with Comprehensive Health Services, LLC for alleged violations of the False Claims Act. As DOJ’s first resolution of a False Claims Act enforcement action involving cyber fraud since launching its Civil Cyber-Fraud Initiative in October 2021, this settlement signals the DOJ’s eagerness to combat cybersecurity violations and misrepresentations.

Read on for analysis of this case and implications for government contractors.

FCA Litigation

Analysis of DOJ’s 2021 False Claims Act Statistics and Related Trends

Last week, the U.S. Department of Justice announced that it recovered more than $5.6 billion under the False Claims Act in fiscal year 2021 — an enormous total, second only to 2014 recoveries.

Read the latest post on “Subject to Inquiry” for analysis of the reported 2021 statistics, how they compare to previous years’ numbers and a forecast of some top DOJ enforcement priorities: the opioid epidemic, cybersecurity and pandemic-related fraud.

Defense Arguments, FCA Defenses, FCA Litigation

Seventh Circuit Clarifies Pleading Standard for Anesthesiologist’s False Claims Action

The Seventh Circuit recently reversed a lower court’s ruling that an amended complaint in a qui tam lawsuit filed under the False Claims Act (FCA) alleging fraudulent anesthesiology billing practices failed to meet the pleading standard under Rule 9(b) of the Federal Rules of Civil Procedure. In U.S. ex. rel. Mamalakis vs. Anesthetix Management LLC, — F.4th —-, 2021 WL 5818476 (Dec. 8, 2021), the Seventh Circuit reversed the district court’s dismissal and held that the amended complaint included enough detail to satisfy Rule 9(b)’s pleading benchmark, allowing the case to move forward.

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CMS Guidance, OIG, Regulatory

Will 2022 Be The Year? OIG’s 25 Top Recommendations to Reduce Healthcare Fraud

Every year the U.S. Department of Health and Human Services’ (HHS) Office of Inspector General (OIG) releases an annual Solutions to Reduce Fraud, Waste, and Abuse in HHS Programs: OIG’s Top Unimplemented Recommendations. HHS released its most recent in Nov. 2021, outlining OIG’s top 25 unimplemented recommendations that, in OIG’s view, would most positively affect HHS programs in terms of cost savings, program effectiveness and efficiency, and public health and safety. These recommendations stem from OIG audits and evaluations through the end of 2020 and suggest changes coming to the federal healthcare programs that may impact healthcare facilities in the future. OIG’s recommendations outline where providers could focus their own compliance program to prepare for any further government scrutiny.

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DOJ

Court Allows Superseding Indictment Twelve Days Before Trial, Failing to Find Prosecutorial Vindictiveness

In U.S. v. Georges, 2021 WL 3887183 (S.D. Oh. Aug. 30, 2021), a federal court recently dismissed a defendant’s motion to dismiss a superseding indictment, denying her claim of prosecutorial vindictiveness related to multiple alleged violations of the Federal Anti-Kickback Statute. The defendant, Nicole Georges, was a pharmaceutical representative who coordinated speaking arrangements with physicians that allegedly induced increased drug prescriptions.  Ms. Georges was initially indicted on a single count for her participation in a single speaking event, however, the government later filed a superseding incitement alleging an additional violation of the Anti-Kickback Statute after plea negotiations failed twelve days before trial.  Despite her due process claims of prosecutorial vindictiveness, the court allowed the superseding indictment to stand.

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