In one of the final cases of a tumultuous term at the Supreme Court, the Justices ruled against DOJ in a decision that could have wide ranging effects not just for physicians and other prescribers, but for drug control laws more generally. In Xiulu Ruan v. U.S., No. 20-1410 (Jun. 27, 2022), the Court considered the convictions of two physicians for violating the Controlled Substances Act, 21 U.S.C. § 841 because, DOJ contended, and the respective juries found, that their prescriptions were “not authorized.” (The relevant statute makes it a federal crime to “[e]xcept as authorized[,]….knowingly or intentionally…dispense…a controlled substance.” Id.). One physician was sentenced to 20 years imprisonment; a second to 25 years. Each, at trial, had contended that their prescriptions were authorized, that they had the requisite credentials to write prescriptions, including DEA and state board registrations, and that they were properly licensed. DOJ, meanwhile, had argued that the physicians were operating “pill mills” and, accordingly, their prescriptions were not “authorized.”
On February 4, 2021, the Department of Justice (“DOJ”), Office of Public Affairs, issued a Press Release (the “DOJ Press Release”) announcing that Kelly Wolfe, President of Regency, Inc., a medical billing company located in Florida, pleaded guilty to conspiracy to commit healthcare fraud through a “pernicious telefraud scheme” involving fraudulent Medicare and CHAMPVA (Civilian Health and Medical Program of the Department of Veterans Affairs) claims for medically unnecessary durable medical equipment (“DME”) supplies. As a result of Wolfe’s criminal plea, Wolfe could face up to 13 years in federal prison. …
Continue Reading OIG Warns Telehealth Industry: “With Great Power Comes Great Responsibility”
As we discussed in our April 27, 2020 blog post, nursing homes have become the focus of significant attention during the COVID-19 crisis. In many respects, the attention is well deserved:
- Nursing homes traditionally serve seniors who often struggle with chronic health conditions. As a result, nursing home residents are particularly vulnerable to coronavirus infection due to both their age and health status;
- Nursing homes residents are highly interactive with each other. The close proximity of nursing home rooms/beds and the personal relationships often formed among nursing home residents make social distancing hard to maintain;
- In order to relieve pressure on hospitals that need to reserve their beds for the most acute COVID-19 patients, nursing homes are under significant pressure to accept COVID-19 patients who have been discharged from hospitals because they no longer require an acute level of care but still may be symptomatic and require isolation and treatment; and
- Most importantly, the above three factors and others have turned many nursing homes across the country into hot spots for coronavirus infection and, in some cases, COVID-19 fatalities. Overwhelming data as to the dangers found in nursing homes is highlighted in the blog article referenced above.
On February 26, 2018, twenty states (the “Plaintiffs”) jointly filed a lawsuit in the U.S. District Court for the Northern District of Texas requesting that the court strike down the Patient Protection and Affordable Care Act (“ACA”), as amended by the Tax Cuts and Jobs Act of 2017 (the “TCJA”), as unconstitutional. The Plaintiffs’ suit gained support from the White House last week, when Attorney General Jeff Sessions delivered a letter to House Speaker Paul Ryan on June 7, 2018 (the “Letter”), indicating that the Attorney General’s Office, with approval from President Trump, will not defend the constitutionality of the individual mandate – 26 U.S.C. 5000(A)(a) – and will argue that “certain provisions” of the ACA are inseverable from that provision. The Letter indicates that this is “a rare case where the proper course is to forgo defense” of the individual mandate, reasoning that the Justice Department has declined to defend statutes in the past when the President has concluded that the statute is unconstitutional and clearly indicated that it should not be defended.
Continue Reading Following Repeal of the Individual Mandate, Twenty States Challenge the Affordable Care Act
 On January 25, 2018, Associate Attorney General Rachel Brand issued a memorandum on behalf of the U.S. Department of Justice (DOJ) (the “Brand Memo”) which effectively limits the use and enforcement power of guidance documents for the purposes of affirmative civil enforcement cases, a development that could have a significant impact on how certain healthcare cases are handled at the federal level by federal departments, agencies, and administrations, including those that are fixtures of the healthcare marketplace – the Department of Health and Human Services (HHS) and its constituent agencies, including the Centers for Medicare and Medicaid Services (CMS), the Food and Drug Administration (FDA) and the HHS Office of Inspector General (OIG).
Continue Reading New DOJ Guidance Policy Limits Use of Guidance Documents in Federal Civil Actions
As reported by the New York Times in an article dated July 13, 2017, in an effort to crack down on fraud and abuse, and with a particular focus on opioids, the Department of Justice (“DOJ”) is charging 412 individuals for collectively defrauding the government of around $1.3 billion. Of the individuals implicated, approximately one-third are being accused of opioid-related crimes. These crimes include billing Medicare and Medicaid for drugs that were never purchased, collecting money for fake treatments and tests, and exchanging prescription drugs for money. The fraud and abuse prosecutions are spread across more than 20 states, which include California, New York, Florida, and Texas.
Continue Reading Recent Department of Justice Crackdown on Fraud and Abuse
Recent activities of the Department of Justice (“DOJ”) and Qui Tam whistleblowers reveal that Medicare Advantage Plans remain at the forefront of investigations for violations of the federal False Claim Act (“FCA”) for allegedly engaging in improper risk adjustment practices and other improper or fraudulent practices. In addition to the pending FCA enforcement cases in the Swoben and Poehling cases, as well as reports of ongoing federal investigations, the recent federal settlement in May in Florida with Freedom Health, Inc., and Optimum HealthCare, Inc. – both Medicare Advantage-participating managed care plans that are subsidiaries of America’s 1st Choice Holdings of Florida, LLC – demonstrates that the DOJ, the Office of the Inspector General of the United States Department of Health and Human Services (“OIG”) and Qui Tam whistleblowers are not only interested in large players, such as UnitedHealth Group and others, but also in smaller and regional Medicare Advantage organizations.
Continue Reading The Enforcement Risks for Medicare Advantage Plans Continue: A New False Claims Act Settlement in Florida
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 bring charges or negotiate plea and other agreements. The February 8th issuance is the agency’s first formal guidance under the new presidential administration, and the latest effort by the DOJ’s “compliance initiative,” which launched at the hiring of compliance counsel expert Hui Chen in November 2015. The new guidance is particularly valuable for healthcare organizations in light of the agency’s heightened efforts to prosecute Medicare Advantage plans for fraudulent reporting under the False Claims Act.
Continue Reading DOJ Issues New Guidance on the Evaluation of Corporate Compliance Programs in Federal Fraud Investigations
On June 9, 2016, the Antitrust Division of the United States Department of Justice (“DoJ”) filed a complaint against the Charlotte-Mecklenburg Hospital Authority, d/b/a Carolinas Health Care System (“CHS”) in the United States District Court for the Western District of North Carolina. (United States of America and State of North Carolina v. Charlotte Mecklenburg Hospital Authority). The complaint accuses CHS of using “contract restrictions that prohibit commercial health insurers in the Charlotte area from offering patients financial benefits to use less expensive healthcare services offered by CHS’s competitors.” (Complaint, Preamble) In effect, the complaint is attacking a type of widely used contracting provision in which acute care hospital systems seek to prohibit insurance company payors from using “steering” restrictions, which would otherwise be used to steer their insured patients to lower cost healthcare providers, including lower-cost hospitals, in exchange for lower premiums in so-called “narrow network” insurance plans. The complaint then alleges that CHS has an approximately 50% share of the market for acute inpatient hospital care in the Charlotte metropolitan area, allegedly conferring market power on CHS.
Continue Reading U.S. Department of Justice Sues North Carolina Hospital System for Insisting on Anti-Steering Provisions in Insurance Reimbursement Contracts
By Robert Rose
Last month, in a joint letter by HHS and DOJ to five prominent hospital associations, the government warned that some providers are using electronic medical records (EMR) to “game the system.” The September 24th letter gave examples of “troubling indications” of EMR misuse:
- Cutting and pasting the same examination findings for multiple patients—known as “cloning”—to make it appear that physicians conducted more thorough exams that were actually done
- Upcoding the intensity or severity of a patient’s condition simply to profit without improving the quality of care
By Bob Rose
Four ex-officers of a Pa.-based manufacturer of a bone cement product were sentenced to prison for an unapproved trial that led to three deaths. Each pled guilty to a single misdemeanor count of shipping adulterated and misbranded Norian XR in interstate commerce. The sentences, imposed in Philadelphia federal court, ranged from five to nine months in custody plus fines.…