Category: Healthcare

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...

Alleging Improper Use of Funds Legitimately Obtained from the Government Insufficient to State FCA Retaliation Claim

Ben Kappelman

The U.S. District Court for the Southern District of Texas has dismissed an FCA retaliation claim brought by a nurse who claimed to have blown the whistle on misuse of funds at a hospital that received significant federal revenue. In Endicott v. Oakbend Medical Center, the nurse alleged she was fired after she complained that several hospital executives were using hospital employee time to enrich...

Northern District of Illinois Dismisses Whistleblower’s FCA Suit for Failing to Connect Allegations of Misconduct with Submission of False Claims

Nathan Ebnet

In United States ex rel. Keen v. Teva Pharmaceuticals USA, Inc., relator Janice Keen sued her former employer—the pharmaceutical company Teva—for violations of the FCA.  According to Ms. Keen, Teva trained its sales force to misleadingly promote and sell a medicine used to treat muscle spasms.  Ms. Keen alleged that Teva’s deceptive practices caused physicians to prescribe the medicine in situations for which it was...

First Circuit Rejects Fraud-on-the-FDA Theory of FCA Liability

Katherine Arnold

Affirming an earlier order handed down by the United States District Court for the District of Massachusetts, the First Circuit recently denied Plaintiff D’Agostino leave to amend his complaint, finding the proposed claims were futile. D’Agostino, et al. v. EV3, Inc. et al., 2016 WL 7422943 (1st Cir. Dec. 23, 2016).  D’Agostino’s complaint alleges False Claims Act (“FCA”) violations related to the Onyx and Axium medical...

OIG Creates New AKS Safe Harbors, Codifies Others

Neal N. Peterson

On January 6, 2017, two new safe harbors to the federal anti-kickback statute (the “AKS”) will become effective pursuant to a final rule published by the United States Department of Health and Human Services Office of the Inspector General (the “OIG”) on December 7, 2016. The final rule also codifies safe harbors for certain AKS exceptions and makes a technical correction to the existing safe...

Former CEO of Health System Agrees to Pay $1 million to Settle False Claims Act Case with U.S. Department of Justice

Benjamin Fee

In the most recent example of its continued effort to hold individuals accountable for corporate misconduct, the U.S. Department of Justice (“DOJ”) announced on September 27, 2016, that the former CEO of Tuomey Healthcare System has agreed to pay $1 million to settle claims arising from his involvement in the hospital’s violations of the Stark Law.  In addition to the $1 million civil fine, the...

Eighth Circuit Determines that Compliance with Reasonable Interpretation of Government Regulation Sufficient to Avoid FCA Liability (Absent a Government Warning to the Contrary)

Ben Kappelman

The Centers for Medicare and Medicaid Services (“CMS”) establishes requirements for how medical procedures must be performed for a medical provider to seek payment for those procedures.  Seeking payment without properly performing the procedure might expose the provider to alleged liability under the False Claims Act (“FCA”).  But what if the requirements for the procedure are ambiguous?  Will a provider’s reasonable interpretation of a requirement...

Implied Certification, Escobar, and the Impact on Healthcare Providers

Alissa Smith

On June 16, 2016, the Supreme Court issued a unanimous decision in Universal Health Services, Inc. v. United States ex rel. Escobar upholding the “implied certification” theory of liability under the False Claims Act (“FCA”) but adopting a rigorous materiality standard for determining liability in such cases.  This case is a game changer.  For years, the government and plaintiffs have argued that the federal FCA...

Failure to Disclose Best Pricing: Pharmaceutical Companies Settle FCA Claims for $784 Million

Alex Hontos

The Department of Justice announced late last month that pharmaceutical manufacturers Wyeth and Pfizer would pay $784 million to resolve a False Claims Act investigation and qui tam lawsuit arising from Wyeth’s failure to disclose its best pricing of drugs to the government.  The case was brought under the FCA’s qui tam provisions; the relators’ share of the recovery is nearly $100 million. The case...