FCA NOW

In One Decision, The Eleventh Circuit Creates Two Circuit Splits

Kirk Schuler

Rejecting the views of the Fourth and Tenth Circuits, the Eleventh Circuit held the FCA’s three year statute of limitations period in § 3731(b)(2) applies to a relator’s claim even when the United States declines to intervene, and in so doing held it is the knowledge of a government official, not the relator, that triggers the three year limitations period, rejecting the contrary view of...

Third Circuit: False Claims Act Liability Premised on an Anti-Kickback Statute Violation Requires Proof that at Least One Federal Claim Resulted from an Improper Referral or Recommendation

Ben Kappelman

Federal scrutiny of charities that assist patients with accessing prescription drugs has increased with rising prescription drug prices.  Some prescription drug charities receive funding from medical providers or drug manufacturers, which can raise questions about whether the charities’ funders are using the charities to generate improper recommendations or referrals. In December 2017, the U.S. Department of Health and Human Services Office of Inspector General rescinded a...

Two Recent Justice Department Memoranda May Have Significant Consequences for Pending and Future False Claims Act Enforcement

Alex Hontos

In recent weeks, the United States Department of Justice (“DOJ”) issued two memoranda that might change the calculus of False Claims Act (“FCA”) cases.  The memoranda at a minimum provide organizations with new—or at least invigorated—defenses to qui tam actions and civil enforcement matters. First, on January 10, Michael Granston, Director of DOJ’s Civil Frauds section, issued a memorandum encouraging DOJ trial attorneys to consider dismissing...

Applying Escobar’s Materiality Standard, Florida Federal Court Reverses $350 Million False Claims Act Verdict against a Nursing Home Operator

Alissa Smith

If the government does not take action and continues to pay for Medicare/Medicaid claims after it learns of non-compliance related to the claims, is the non-compliance material to the government’s decision to pay?  This is a question being answered in the negative by courts across the country, who have concluded that the government (or a qui tam relator) is not able to proceed under a...

HIPAA As a Basis for FCA Liability? One Court Says Yes

Nathan Ebnet

Until very recently, no case existed in which FCA liability arose from a violation of the Health Insurance Portability and Accountability Act (“HIPAA”). But in United States v. America at Home Healthcare and Nursing Services, Ltd., Judge John Robert Blakely of the United States District Court for the Northern District of Illinois, Eastern Division, allowed an FCA claim premised on a HIPAA violation to survive...

Early Resolution of FCA Civil Damages Under the Eighth Amendment’s Excessive Fines Clause? A Pending Case in Washington May Provide the Answer

Benjamin Greenberg

The False Claims Act authorizes civil penalties between $10,781 to $21,563 per false claim, as well as three times the amount of damages which the government sustains (i.e. treble damages). The Eighth Amendment provides that “[e]xcessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.” The Supreme Court of the United States has recognized that a statutory penalty constitutes...

Government Contractor Awarded Attorney Fees for Defending Against “Unreasonable” FCA Claim

The U.S. Court of Appeals for the Sixth Circuit recently concluded that a contractor should obtain an award of attorney fees for having to defend against an “unreasonable” False Claims Act (“FCA”) suit.  In United States ex. rel. Wall v. Circle C. Constr. LLC, the Government sued a contractor that built warehouses for the U.S. Army. During construction, it was alleged that the contractor’s subcontractor paid two electricians...

Eighth Circuit Rejects Sovereign Immunity Defense to FCA Qui Tam Action

Betsy Sellers

Last month the Eighth Circuit considered and rejected an Eleventh Amendment sovereign immunity defense to a qui tam action under the False Claims Act.  In United States ex rel. Fields v. Bi-State Development Agency, No. 16-3783, 2017 U.S. App. LEXIS 13925 (8th Cir. August 1, 2017), a former employee of Bi-State alleged that the defendant interstate compact entity raised funds and required its employees to...

Consultant Guilty of Illegal Kickbacks By “Referring” Doctors’ Patients to Another Medical Provider in Exchange for Remuneration

RJ Zayed

Under 42 U.S.C. § 1320a-7b(b)(1)(A) it is a felony for a physician to solicit or receive a kickback “in return for referring” a Medicaid or Medicare patient to another medical provider. But as a recent decision by the Eighth Circuit in United States v. Iqbal demonstrates, physicians are not the only ones capable of making illegal referrals under the statute—consultants can, too. Defendant Iqbal was a...

Genesis Healthcare Settlement with Federal Government

Alissa Smith

On June 16, 2017, The Department of Justice (“DOJ”) announced a $53.6 million dollar settlement with Genesis Healthcare Inc. (“Genesis”) over six federal whistleblower lawsuits alleging that subsidiaries of the rehabilitation and transitional care provider violated the False Claims Act (“FCA”). The original qui tam plaintiffs, former employees of companies acquired by Genesis, will receive a combined $9.67 million dollars in recovery. The settlement resolved...