FCA NOW

California Court Permits FCA Claim Involving Medicare “Referral and Regeneration” Scheme to Proceed Against Healthcare CEO

Angela Porter

In a recent opinion, the Northern District of California allowed FCA claims to proceed against the CEO of a skilled nursing facility operator.  John Orten, the whistleblower in the suit, was a former nursing home administrator for North American Health Care, Inc. (NAHC).  Orten claimed that he had witnessed the CEO of NAHC, John Sorensen, order company administrators to pay physicians who referred patients to...

Education Management Corporation Settles Significant FCA Claims

Angela Porter

Education Management Corporation (EDMC), a Pittsburgh-based company that operates for-profit educational institutions, has agreed to pay $96 million in what attorneys involved in the case claim to be the largest settlement ever in a False Claims Act case involving the Department of Education.  The settlement was announced on November 16, 2015, and it resolved four cases spanning a period of eight years. The cases were...

Novartis Pharmaceuticals Settles $390MM FCA Allegations

Kristin Zinsmaster

Drugmaker Novartis Pharmaceuticals has agreed in principle to pay $390MM (including $20MM in civil forfeitures) to the Department of Justice.  This payment, in addition to modification and an extension of Novartis’s existing Corporate Integrity Agreement (“CIA”), settles claims that the company paid illegal kickbacks to specialty pharmacy companies in order to induce the pharmacies to recommend two drugs—Exjade and Myfortic—to their patients.  The Government sought...

New York Trial Court Dismisses FCA Tax Case against Vanguard; Determines Relator Violated Confidentiality Provisions of State Attorney Ethics Rules

Jeremy Schlosser

On November 13, 2015, the New York State Supreme Court dismissed a qui tam action brought under New York State Finance Law §§ 187-194 (“False Claims Act”) against The Vanguard Group Inc., The Vanguard Group of Mutual Funds, and Vanguard Marketing Corporation (collectively, “Vanguard”) by a former Vanguard in-house tax attorney because the Court found that plaintiff had improperly relied on confidential information obtained through...

District Court Rejects FCA Claim Against Healthcare Provider That Submitted False Claims But Did So Without Necessary Mental State

Annie Trimberger

Healthcare provider Fresenius Medical Care North America claimed victory in a False Claims Act (“FCA”) lawsuit recently when a federal district court ruled that there was no evidence that its practice of billing for “overfill” medications was anything more than negligent, and therefore did not satisfy the knowledge requirement of the FCA. On October 30, 2015, the U.S. District Court for the Northern District of...

Tuomey Settles, Post-Judgment, Alleged Violations of FCA and Stark Law

Betsy Sellers

The Department of Justice and Tuomey Healthcare have announced a $72.4 million settlement in a lawsuit that the DOJ touts as “another achievement for the [DOJ and DHS] Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative.” The settlement follows a 2013 trial in which a jury found Tuomey had violated the False Claims Act and Stark Law by filing more than 21,000 false...

Eighth Circuit Vacates Relators’ FCA Settlement Recovery; Concludes that the FCA “Allows Relators to Recover a Percentage of the Proceeds of the Settlement of ‘the Claim’ Brought by the Relators, and Only That Claim”

Jeremy Schlosser

The U.S. Court of Appeals for the Eighth Circuit recently vacated an award of settlement proceeds to relators of several related qui tam actions because the district court failed to make factual findings as to whether the government’s settlement with one of the defendants was based on claims that factually overlapped with the claims brought by the relators. Rille v. PricewaterhouseCoopers LLP, et al., No....

Supreme Court Asked To Clarify Application of Rule 9(b) in FCA Cases

Matthew Buckley

On September 21, 2015, counsel for AT&T, Inc., and other telecommunications providers asked the U.S. Supreme Court to resolve a circuit split over what relators asserting FCA claims must do to meet Federal Rule of Civil Procedure 9(b)’s requirement of particularity. Pet. for a Writ of Cert., AT&T, Inc. v. United States of America ex rel. Heath, No. 15-363 (Sept. 21, 2015). Under the Universal...

Utah Court Dismisses False-Certification Case Alleging Submission of False Certificates of Conformance

Robert McGarry

On September 22, 2015, the U.S. District Court for the District of Utah dismissed a qui tam complaint brought against Triumph Gear Systems, Inc. (“TGS”) and its parent company Triumph Group, Inc. (“Triumph”).   In an opinion issued by District Judge Dale A. Kimball, the Court found that the complaint failed at the “most basic level” to identify a single false claim submitted to the government....

Judge Dismisses FCA Claim Against City of Chicago; Concludes that “Subsequent Nonperformance of a Future Commitment” Was Not a Falsehood Under FCA

T. Augustine Lo

On September 16, 2015, the U.S. District Court for the Northern District of Chicago dismissed a False Claims Act (FCA) case against the City of Chicago, because the qui tam complaint did not satisfy the relevant pleading standard.   In an opinion issued by District Judge Andrea Wood, the court found that the complaint failed to allege facts with particularity as required under Federal Rule of...