On February 27, 2019, Tennessee-based holding company Vanguard Healthcare, LLC (“Vanguard”), agreed to pay over $18 million to settle a False Claims Act (“FCA”) action brought by the United States and the state of Tennessee for “grossly substandard nursing home services.” The settlement stems from allegations that five Vanguard-operated facilities failed to do the following:

On May 7, 2019, the Department of Justice (“DOJ”) released new guidance for trial attorneys in the DOJ’s civil division regarding how entities under False Claims Act investigation can receive credit for cooperation.  The release of this new guidance follows public comments delivered in March by Michael Granston, director of DOJ’s civil fraud section, noting

On December 21, 2018, the Department of Justice (“DOJ”) announced in a press release the recoveries obtained in settlements and judgments from civil matters involving fraud and those brought under the False Claims Act (“FCA”) for the fiscal year (“FY”) ending September 30, 2018. While total recoveries were $2.88 billion—the ninth consecutive year exceeding $2

The Department of Justice (DOJ) announced this week that it has entered into a settlement agreement with Davita Medical Holdings (Davita) for $270 million dollars to resolve certain False Claims Act liability related to Medicare Advantage risk adjustment payments.

As the settlement agreement describes, Davita acquired HealthCare Partners (HCP), a large California based independent physician

On June 25, 2018, the Office of the Inspector General of the Department of Health and Human Services (“OIG”) published Advisory Opinion 18-05, allowing a nonprofit medical center to provide or arrange for certain support services for individuals who care for adults with chronic medical conditions (the “Opinion”).  The Opinion is significant because it

For health care providers and other government contractors, perhaps no law causes more angst than the False Claims Act, 31 U.S.C. §§ 3729 et seq. (“FCA”).  A Civil War-era statute initially designed to prevent fraud against the government, the FCA is often leveraged by whistleblowers (also known as “relators”) and their counsel who bring

On December 21, the Department of Justice (“DOJ”) reported its fraud recoveries for Fiscal Year 2017. While overall numbers were significant – $3.7 billion in settlements and judgments from civil cases involving allegations of fraud and false claims against the government – this was an approximate $1 billion drop from FY 2016. However, the statistics

The U.S. Department of Health and Human Services, Office of Inspector General (“OIG”), has made pursuing fraud in the personal care services (“PCS”) sector a top priority, including making it a focus of their FY2017 workplan.

Last week, OIG released a report, Medicaid Fraud Control Units Fiscal Year 2016 Annual Report,  which set

On April 18, 2017, the U.S. District Court for the Middle District of Florida adopted a magistrate judge’s recommendation to grant summary judgment in favor of defendant BayCare Health System (“BayCare”) in a False Claims Act whistleblower suit that focused on physician lease agreements in a hospital-owned medical office building, thereby dismissing the whistleblower’s suit.

The whistleblower, a local real-estate appraiser, alleged that BayCare improperly induced Medicare referrals in violation of the federal Anti-Kickback Statute and the Stark Law because the lease agreements with its physician tenants included free use of the hospital parking garage and free valet parking for the physician tenants and their patients, as well as certain benefits related to the tax-exempt classification of the building. The brief ruling affirms the magistrate judge’s determination that the whistleblower failed to present sufficient evidence to establish either the existence of an improper financial relationship under the Stark Law or the requisite remuneration intended to induce referrals under the Anti-Kickback Statute.

The alleged violation under both the Anti-Kickback Statute and the Stark Law centered on the whistleblower’s argument that the lease agreements conferred a financial benefit on physician tenants – primarily, because they were not required to reimburse BayCare for garage or valet parking that was available to the tenants, their staff and their patients.  However, the whistleblower presented no evidence to show that the parking was provided for free or based on the physician tenants’ referrals.  To the contrary, BayCare presented evidence stating that the garage parking benefits (and their related costs) were factored into the leases and corresponding rental payments for each tenant.  Further, BayCare presented evidence to support that the valet services were not provided to, or used by, the physician tenants or their staff, but were offered only to patients and visitors to “protect their health and safety.”

In light of the evidence presented by BayCare, and the failure of the whistleblower to present any evidence that contradicted or otherwise undermined BayCare’s position, the magistrate judge found that: (i) no direct or indirect compensation arrangement existed between BayCare and the physician tenants that would implicate the Stark Law, and (ii) BayCare did not intend for the parking benefits to induce the physician tenants’ referrals in violation of the Anti-Kickback Statute.


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A recent settlement demonstrates the importance of compliant structuring of lending arrangements in the health care industry. The failure to consider health care fraud and abuse risks in connection with lending arrangements can lead to extremely costly consequences.

On April 27, 2017, the Department of Justice (“DOJ”) announced that it reached an $18 Million settlement with a hospital operated by Indiana University Health and a federally qualified health center (“FQHC”) operated by HealthNet. United States et al. ex rel. Robinson v. Indiana University Health, Inc. et al., Case No. 1:13-cv-2009-TWP-MJD (S.D. Ind.).  As alleged by Judith Robinson, the qui tam relator (“Relator”), from May 1, 2013 through Aug. 30, 2016, Indiana University Health provided HealthNet with an interest free line of credit, which consistently exceeded $10 million.  It was further alleged that HealthNet was not expected to repay a substantial portion of the loan and that the transaction was intended to induce HealthNet to refer its OB/GYN patients to Indiana University.

While neither Indiana University Health nor HealthNet have made any admissions of wrongdoing, each will pay approximately $5.1 million to the United States and $3.9 million to the State of Indiana. According to the DOJ and the Relator, the alleged conduct violated the Federal Anti-Kickback Statute and the Federal False Claims Act.

For more details on the underlying arrangement and practical takeaways . . .


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