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Tag Archives: False Claims Act

The False Claims Act Under a Trump Administration – What Does Attorney General Nominee Sessions Think?

As discussed previously in this blog, efforts to curb fraud, waste and abuse are generally “bi-partisan.” Given the significant monetary recoveries the Government enjoys through enforcement of the federal False Claims Act (“FCA”), we have predicted that efforts in this arena will continue under a Trump administration. However, this is dependent, in part, on the priorities of the new administration and the resources it devotes in this arena. To this end, the testimony of Attorney General nominee Sessions during his confirmation hearing on January 10th may have given us some insight into how he views the FCA.

Notably, as … Continue Reading

FY 2016 False Claims Act Recoveries: Government Enforcement Remains Lucrative and a Continued Source of Risk for Health Care Entities—But Will This Change in a Trump Administration?

The federal government continues to secure significant recoveries through settlements and court awards related to its enforcement of the False Claims Act (FCA), particularly resulting from actions brought by qui tam relators. In fiscal year (FY) 2016, the federal government reported that it recovered $2.5 billion from the health care industry. Of that $2.5 billion, $1.2 billion was recovered from the drug and medical device industry.  Another $360 million was recovered from hospitals and outpatient clinics.

Government Intervention Drives Recoveries

The FY 2016 FCA statistics reflect that more than 97% of the recoveries from qui tam cases resulted from matters … Continue Reading

In First Speech Since the Election, DOJ Deputy Attorney General, Sally Yates, “Optimistic” That Corporate Misconduct Will Remain a DOJ Priority Under New Administration

As many pundits speculate regarding the future of the Yates Memo[1] in a Trump administration, on Wednesday, November 30, 2016, Department of Justice (“DOJ”) Deputy Attorney General, Sally Q. Yates, provided her first comments since the election.  The namesake of the well-known, “Yates Memo,” Yates spoke at the 33rd Annual International Conference on Foreign Corrupt Practices Act in Washington, D.C. and provided her perspective on the future of DOJ’s current focus on individual misconduct.

Yates, who has served at the DOJ for over twenty-seven years, stated that while the DOJ has endured many transitions in leadership … Continue Reading

HHS Increases Civil Monetary Penalties and 299 Other Fines

Health care providers, life sciences companies and other entities subject to regulation by the Food and Drug Administration (“FDA”) or the Centers for Medicare & Medicaid Services (“CMS”) should be aware that the U.S. Department of Health and Human Services (“HHS”) is increasing the maximum civil monetary penalty amounts that may be assessed by the agency.

The new maximum adjusted penalty amounts may have a significant impact on entities that violate or fail to meet mandatory reporting requirements set by FDA or CMS. Of the 299 enumerated increased fines, 137 fines (45.8%) have increased by over 75%, 100 fines (33.4%) … Continue Reading

FCA Penalty Spike Confirmed by DOJ

Entities that provide goods and services to the federal government, including health care providers and life sciences companies, should take note of the new civil monetary penalty amounts applicable to False Claims Act (“FCA”) violations. After much anticipation, the U.S. Department of Justice (“DOJ”) issued an interim final rule on June 30, 2016 confirming speculation that the penalty amounts will increase twofold.

The new minimum per-claim penalty amount will increase from $5,500 to $10,781, and the maximum per-claim penalty amount will increase from $11,000 to $21,563. The DOJ penalty increase mirrors the penalty spike announced by the U.S. Railroad Retirement … Continue Reading

Supreme Court: False Claims Act & Materiality Requirement

Stuart GersonThe U.S. Supreme Court has rendered a unanimous decision in the hotly-awaited False Claims Act case of Universal Health Services v. United States ex rel. Escobar.  This case squarely presented the issue of whether liability may be based on the so-called “implied false certification” theory.  Universal Health Service’s (“UHS) problem originated when it was discovered that its contractor’s employees who were providing mental health services and medication were not actually licensed to do so. The relator and government alleged that UHS had filed false claims for payment because they did not disclose this fact and thus had impliedly certified … Continue Reading

Health Care Providers May Soon See a Twofold Increase in False Claims Act Penalties

In fiscal year 2015, the U.S. Department of Justice (“DOJ”) recovered more than $3.5 billion from False Claims Act (“FCA”) cases. A staggering $1.9 billion of that amount was recovered from health care providers who were alleged to have provided unnecessary care, paid kickbacks or overcharged federal health care programs.  While this amount may seem high, the drastic increases in FCA penalties expected this summer have the potential to skyrocket FCA recoveries in coming years. DOJ has not yet released the increased penalty amounts that would apply to FCA cases involving companies in the health care and life sciences industries, … Continue Reading

DC Circuit: No False Claims Act Liability for Reasonable, Good Faith Interpretations of Ambiguous Regulations

On November 24, 2015, in United States ex rel. Purcell v. MWI Corp., No. 14-5210, slip op. (D.C. Cir. Nov. 24, 2015), the District of Columbia Circuit Court of Appeals ruled that federal False Claims Act (“FCA”) liability cannot attach to a defendant’s objectively reasonable interpretation of an ambiguous regulatory provision. While outside of the health care arena, this decision has implications for all industries exposed to liability under the FCA.

In Purcell, the government alleged that false claims had been submitted as a result of certifications made by defendant MWI Corporation to the Export-Import Bank in order to secure … Continue Reading

The DC Circuit Speaks – Proving Condition of Payment is Key To Implied Certification False Claims Act Cases

On July 10, 2015, the U.S. Court of Appeals for the District of Columbia Circuit made clear that in False Claims Act cases brought under an implied certification theory, certifying compliance with the federal statute or regulation at issue must be a condition of payment.

In United States ex rel. Davis v. District of Columbia, No. 14-7060, 2015 WL 4153919 (D.C. Cir. Jul. 10, 2015), a qui tam relator alleged that the District of Columbia had failed to maintain certain records supporting certain cost reports it submitted to the District of Columbia Medical Assistance Administration, purportedly in violation of record-keeping … Continue Reading

A “Mixed Bag” from SCOTUS – Kellogg Brown & Root Services, Inc. v. United States ex rel. Carter

In a unanimous decision announced May 26, the U.S. Supreme Court, in Kellogg Brown & Root Services, Inc. v. United States ex rel. Carter, 2015 BL 163948, U.S., No. 12-1497, 5/26/15, ruled that the Wartime Suspension of Limitations Act (“WSLA”) applied only to criminal charges and not underlying civil claims in times of war. Thus, the WSLA – which suspends the statute of limitations when the offense is committed against the Government – cannot be used to extend the statute of limitations in cases such as those brought under the False Claims Act (“FCA”). This ruling reversed a decision of … Continue Reading

Third Circuit Deepens Circuit Split in Adopting “Nuanced” Standard for FCA Claims

By Daniel C. Fundakowski

                   I.            Background

On June 6, 2014, in Foglia v. Renal Ventures Management, LLC the Third Circuit revived a dismissed False Claims Act (“FCA”) lawsuit, holding that the New Jersey District Court applied Federal Rule of Civil Procedure 9(b) too rigorously when granting Renal’s 12(b)(6) motion to dismiss.  Under Rule 9(b), an FCA whistleblower must allege “with particularity the circumstances constituting fraud or mistake.”

Foglia was hired in 2007 as a registered nurse for Renal Ventures Management, a dialysis provider, and was terminated in 2008.  Foglia alleged in his second amended complaint that Renal violated the FCA … Continue Reading