Category Archives: False Claims Act

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The Granston Memo in 2019: Recent Cases Highlight the Granston Memo’s Effectiveness as a Tool to Dismiss False Claims Act Cases

Michael PaddockKeeley A. McCartyBy Michael Paddock and Keeley A. McCarty on Posted in DOJ, False Claims Act
The “Granston Memo” has proven to be a boon again in 2019 for False Claims Act (“FCA”) defendants.  In a January 15, 2019 Sheppard Mullin FCA Defense Blog article, we highlighted a growing movement by the Department of Justice (“DOJ”) to utilize its dismissal power on meritless and burdensome qui tam FCA cases following an … Continue Reading

The Eleventh Circuit Remands AseraCare, But Affirms High Hurdle for Proving Falsity

Michael PaddockErica KrausBy Michael Paddock and Erica Kraus on Posted in False Claims Act, Healthcare
In a highly anticipated opinion in the AseraCare case, issued on September 9, 2019, the Eleventh Circuit Court of Appeals affirmed the district court’s holding that “a clinical judgment of terminal illness warranting hospice benefits under Medicare cannot be deemed false, for the purposes of the False Claims Act, when there is only a reasonable … Continue Reading

Eleventh Circuit Affirms Key Kickback Statute, Stark Law, and False Claims Act Principles in Dismissing Allegations Against HCA

Michael PaddockErica KrausTheresa ThompsonBy Michael Paddock, Erica Kraus and Theresa Thompson on Posted in False Claims Act, Hospitals
On July 31, 2019, the U.S. Court of Appeals for the Eleventh Circuit affirmed a lower court’s decision to grant summary judgment to hospital operator HCA and dismiss relator Thomas Bingham’s allegations. Bingham v. HCA (S.D. Fla. July 31, 2019) (“Op.”). In a well-reasoned opinion, the Court affirmed several key holdings: There is no “remuneration”, … Continue Reading

Government Puts Electronic Health Records Companies “on Notice” of Vigorous False Claims Act Enforcement

Michael PaddockErica KrausBy Michael Paddock and Erica Kraus on Posted in False Claims Act
Federal prosecutors announced yesterday the Government’s settlement with electronic health records (“EHR”) vendor Greenway Health, LLC (“Greenway”) of False Claims Act (“FCA”) allegations for a payment of $57.25 million and Greenway’s acceptance of a Corporate Integrity Agreement (“CIA”). The Government’s FCA complaint was filed by the U.S. Attorney’s Office for the District of Vermont, the same … Continue Reading

What Have We Learned About False Claims Act Litigation in the Two Years Since Universal Health Services, Inc. v. United States ex rel. Escobar? Quite a Lot, Actually

By Sheppard Mullin on Posted in False Claims Act
Summer is almost here. For some, that means planning vacations to the beach, hitting the gym to shed that winter weight, or perhaps hitting the golf course—but for us at the Sheppard Mullin Healthcare Law Blog and the False Claims Act Defense Blog, summer signals the anniversary of the Supreme Court’s seminal decision in Universal … Continue Reading

In Case Alleging Nationwide Pharmacy Fraud, Kmart Scores Narrow Settlement

David DouglassSean M. CuddihyBy David Douglass and Sean M. Cuddihy on Posted in False Claims Act, Healthcare
As described in an April 17, 2018 article originally posted on the Sheppard Mullin Richter and Hampton, LLP False Claims Act Defense Blog, Kmart Corporation and the U.S. Department of Justice entered into a False Claims Act settlement agreement dated March 8, 2018, to end an investigation that was conducted jointly by the United States … Continue Reading

Healthcare Industry Beware: The Use of Statistical Sampling to Establish Damages and Liability Under the False Claims Act Remains a Viable Option for Plaintiffs

Robert T. RhoadBy Robert T. Rhoad on Posted in False Claims Act
The False Claims Act contains numerous requirements that are designed to prevent meritless cases from proceeding to discovery and trial. Among these provisions is the rule that, to establish liability, the government or a relator must show that an actual claim was submitted to federal Medicare or state Medicaid for reimbursement. In some Circuits, such as … Continue Reading

Temporal Proximity Is Not Enough: Third Circuit Nixes FCA/Anti-Kickback Suit For Failure To Link Alleged Scheme to Claims

By Sheppard Mullin on Posted in DOJ, False Claims Act, Fraud and Abuse, Medicare
On January 19, 2018, the United States Court of Appeals for the Third Circuit affirmed a district court’s ruling granting summary judgment to a specialty pharmacy that was accused of violating the Anti-Kickback Statute and the federal False Claims Act (United States ex rel. Greenfield v. Medco Health Solutions, Inc. et al., No. 17-1152.). The … Continue Reading

Escobar’s Demanding Materiality Standard Nixes $350 Million Verdict Against Florida Nursing Facility

David DouglassBy David Douglass on Posted in DOJ, False Claims Act, Fraud and Abuse
A Florida federal court threw out a $350 million jury verdict against a nursing facility, citing the Supreme Court’s landmark decision in Universal Health Services, Inc. v. United States ex rel. Escobar. The court explained that the relators had failed to establish that the alleged violations were material to the federal Medicare and state Medicaid programs’ decision … Continue Reading

The Department of Justice Delivers Some Good News to the Healthcare Industry: New False Claims Act Guidance Predicts More Challenges to Qui Tam Plaintiffs

David T. FischerMichael PaddockBy David T. Fischer and Michael Paddock on Posted in False Claims Act
The DOJ is empowered under the FCA to seek dismissal of unmeritorious qui tam suits brought in its name. The DOJ has historically used this power sparingly. We are happy to report, however, that more dismissals may be on the horizon. On January 10, 2018, Michael Granston, Director of the Commercial Litigation Branch of the Fraud Section … Continue Reading

The 2017 Department of Justice False Claims Act Recovery Statistics:

By Sheppard Mullin on Posted in False Claims Act
In a year when the Department of Justice recovers $2.5 billion from the healthcare industry in False Claim Act judgements and settlements, can there really be a silver lining? Every December, the Department of Justice (DOJ) releases its annual False Claims Act (FCA) recovery statistics for the preceding fiscal year. The recovery statistics, as they have … Continue Reading

Escobar: Year One

By Sheppard Mullin on Posted in False Claims Act, Medicaid
The healthcare industry is exposed to False Claims Act liability more so than other industries because of the federal government’s unique role as both a regulator and payor. Universal Health Services, Inc. v. United States ex rel. Escobar is a game changing decision for those in the healthcare industry because it makes violations of certain regulations … Continue Reading

Alert: In a Surprise Decision Issued on October 5, 2017, Honorable John Walter, United States District Judge, Dismissed a Medicare Advantage Risk Adjustment Fraud Suit Against UnitedHealthcare

Kenneth YoodBy Kenneth Yood on Posted in False Claims Act, Medicare
On October 5, 2017, the Honorable Judge John Walter of the United States District Court, Central District of California, granted the Defendants’ Motion to Dismiss the Medicare Advantage (“MA”) Federal False Claims Act (“FCA”) case of United States of America ex rel. Swoben v. Scan Health Plan, et al. (CV 09-5013-JFW (JEMx)) (the “Swoben Case”) … Continue Reading

The Siege Continues: The Justice Department is Investigating Four Additional Medicare Advantage Plans

Steven ChananieBy Steven Chananie on Posted in False Claims Act
In our prior blog post, we reported that, at the request of the federal Department of Justice, the FCA qui tam whistleblower lawsuit in the case of United States ex rel Benjamin Poehling v. United HealthGroup, Inc., et. al. was unsealed on February 15, 2017.  The complaint alleges that United HealthGroup, as well as a … Continue Reading

DOJ Issues New Guidance on the Evaluation of Corporate Compliance Programs in Federal Fraud Investigations

Kenneth YoodBy Kenneth Yood and Katherine Fragoso on Posted in DOJ, False Claims Act
On February 8th, the U.S. Department of Justice (DOJ) quietly issued new guidance on how the agency evaluates corporate compliance programs during fraud investigations. The guidance, published on the agency’s website as the “Evaluation of Corporate Compliance Programs,” lists 119 “sample questions” that the DOJ’s Fraud Section has frequently found relevant in determining whether to … Continue Reading

Justice Department Joins Whistleblower Suit Accusing UnitedHealth Group of Overcharging Medicare by “Hundreds of Millions”

Kenneth YoodBy Kenneth Yood and Katherine Fragoso on Posted in DOJ, False Claims Act
The U.S. Department of Justice (DOJ) has joined a whistleblower lawsuit, United States of America ex rel Benjamin Poehling v. Unitedhealth Group Inc., No. 16-08697 (Cent. Dist. Cal. Sep. 17, 2010), ECF No. 79, against UnitedHealth Group (United) and its subsidiary, UnitedHealthcare Medicare & Retirement—the nation’s largest provider of Medicare Advantage (MA) plans. The suit … Continue Reading

The Overpayment Rule and the Implied False Claims Theory: “What You Don’t Know Can Still Hurt You”

Steven ChananieMichael McKinnonLinda IgarashiErica KrausBy Steven Chananie, Michael McKinnon, Linda Igarashi and Erica Kraus on Posted in Affordable Care Act (ACA), Centers for Medicare and Medicaid Services ("CMS"), False Claims Act, Medicaid, Medicare
In 2010, the Affordable Care Act (“ACA”) enacted new rules governing overpayments made by the Medicare and Medicaid programs. Under these rules, providers have 60 days from the date that the overpayment has been identified to return the overpayment or face penalties and treble damages under the False Claims Act (“FCA”).  As described below, recent … Continue Reading

Supreme Court Preserves But Significantly Changes “Implied Certification” Theory of False Claims Act Liability

Erica KrausDavid DouglassMichael PaddockBy Erica Kraus, David Douglass and Michael Paddock on Posted in False Claims Act
On June 16, 2016, the Supreme Court issued its opinion (“Op.”) in Universal Health Services v. U.S. ex rel. Escobar (“Escobar”), a case testing the viability and scope of the implied certification theory of False Claims Act (“FCA”) liability.  Under the implied certification theory, a defendant may be liable under the FCA based on the … Continue Reading

Did the FCA’s “Implied Certification” Theory Dodge a Bullet?

Scott RoybalBarbara TaylorBy Scott Roybal and Barbara Taylor on Posted in False Claims Act
Yesterday’s argument before the Supreme Court in Universal Health Services, Inc. v. U.S. ex rel. Escobar had the potential to put false claims based on an “implied certification” in the crosshairs. Instead, based on the weight of questioning by a plurality of justices, it appears that some form of implied certification theory may survive. (We … Continue Reading

How Are Your Physicians Compensated? Stark Law + False Claims Act = Halifax Paying $85 Million

Barbara TaylorCharles KreindlerBy Barbara Taylor and Charles Kreindler on Posted in False Claims Act
On March 10, 2014, just days before trial, Halifax Hospital Medical Center and Halifax Staffing, Inc. (collectively “Halifax”) entered into an $85 million settlement with the U.S. Department of Justice resolving allegations that they violated the False Claims Act (“FCA”) by submitting Medicare claims that violated the Stark law.  (See Notice of Settlement and Settlement … Continue Reading

Update on the Provider Self-Disclosure Protocol

Barbara TaylorBy Barbara Taylor on Posted in False Claims Act
Since we last reported on the Provider Self-Disclosure Protocol (“Protocol”) issued by the Department of Health and Human Services, Office of the Inspector General (“OIG”), the entire Protocol has been revamped.  Rather than being in the Federal Register, the Protocol is on the OIG website.  The current Protocol extends not just to providers, but also … Continue Reading

The $330-Million Dollar Question

By Sheppard Mullin on Posted in False Claims Act
The question every false claims defendant must face is whether to pursue litigation or simply concede and settle.  While many shy away from litigation, opting for an expensive but certain resolution, for Johnson & Johnson and its subsidiary Janssen Pharmaceuticals, Inc., the decision to pursue their day in court has saved J&J over $330 million.… Continue Reading

Navigating the Provider Self-Disclosure Protocol

Barbara TaylorBy Barbara Taylor on Posted in False Claims Act
Providers can voluntarily disclose potential fraud with respect to Federal health care programs—Medicare, Medicaid, and potentially private insurers to the extent Federal or state funds are involved—by following the Provider Self-Disclosure Protocol (“Protocol”) issued by the Department of Health and Human Services, Office of the Inspector General (“OIG”). (See 63 FR 58399 (Oct. 30, 1998).) … Continue Reading
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