FCA NOW

Supreme Court Concludes that Violation of FCA Seal Provision Does Not Necessarily Mandate Dismissal of Qui Tam Suits

Peter R. Mayer

The Supreme Court held yesterday that a violation of the False Claims Act’s seal provision does not mandate dismissal of a relator’s complaint.  Justice Kennedy authored the Court’s opinion in the unanimous 8-0 decision.  State Farm was accused of defrauding the government by falsely classifying wind damage caused by Hurricane Katrina as flood damage, which would allow State Farm’s costs to be covered by the...

Supreme Court Hears Argument About Violation of FCA Seal Provision

Peter R. Mayer

This month the Supreme Court heard oral argument in State Farm Fire & Casualty Co. v. United States ex rel. Rigsby, a case centered on allegations dating back to Hurricane Katrina.  The Fifth Circuit had previously upheld a jury verdict finding State Farm liable for $758,000 in damages based on a claim that State Farm defrauded the government.  Whistleblowers, including respondent Cori Rigsby, alleged that...

Omnicare Inc. Settles Kickback Allegations for $28 Million

Nicole Burgmeier

The United States Justice Department (DOJ) announced this week that Omnicare, Inc. (Omnicare), the largest nursing home pharmacy in the United States, will pay approximately $28 million dollars to resolve charges that it received kickbacks from Abbott Laboratories (Abbott) to promote Abbott’s anti-epileptic drug, Depakote, to nursing home patients. According to the press release, Omnicare, whose consultant pharmacists review nursing home resident’s medical charts and...

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...

New Orleans Federal Court Dismisses Relators’ Improper Billing Claims against FEMA Temporary Housing Contractor Due to Insufficient Evidence

Jeremy Schlosser

On September 14, 2016, the United States District Court for the Eastern District of Louisiana granted a government contractor’s summary judgment motion and dismissed a lawsuit brought against it by False Claims Act relators (“Relators”) because Relators failed to identify evidence supporting the existence of a genuine issue of material fact regarding their claims that the contractor had improperly billed the Federal Emergency Management Agency...

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...

Texas Diagnostic Imaging Service Settles FCA Allegations for $3.5 Million; Whistle-Blower to Receive $596,700

Nathan Ebnet

A recent settlement illustrates the substantial recovery available to whistle-blowers under the FCA’s qui tam provisions. Those provisions allow a qui tam plaintiff to receive typically between 15 percent and 25 percent of the proceeds of an FCA settlement.  31 U.S.C. § 3730(d). The settling party—Preferred Imaging—is a Dallas-based company that operates independent diagnostic facilities in Texas, Illinois, and Kansas. Preferred Imaging performs procedures involving the administration of contrast...

DOJ Files FCA Complaint Against Recipient of Grant Funding

Vanessa J. Szalapski

The FCA began as a response to procurement fraud by military contractors during the Civil War.  In the intervening years, its reach has extended and increasingly the government is using the FCA as a tool in the context of grant programs.  A recent civil complaint filed by the U.S. Attorney’s Office for the Eastern District of Kentucky is a good example. DOJ sued the medical device maker...

Pharmaceutical Manufacturer’s Possible Settlement Shows Long-Arm of FCA

Zachary Davison

On Tuesday, August 2, 2016, pharmaceutical and biotech company Shire PLC filed a Form 8-K announcing a possible resolution to an ongoing FCA investigation into the sales and marketing tactics of Shire’s “Dermagraft” skin product.   The episode illustrates how the FCA can have significant consequences for mergers and acquisitions, imposing residual obligations years after an acquisition, and again underscores the utility of dedicated FCA due...

Senate Finance Committee Explores Revisions to Stark Law

Andrew Brantingham

At a July 12, 2016 hearing entitled “Examining the Stark Law: Current Issues and Opportunities,” members of the U.S. Senate Finance Committee expressed openness to potentially significant amendments to the Stark Law aimed at alleviating the threat of potentially devastating liability the Stark Law can impose on health care providers that pursue value-based payment models. The Stark Law, 42 U.S.C. § 1395nn, generally prohibits a...