In late March 2023, Dr. Paul Koch, the former owner of a chain of Rhode Island ophthalmology practices, agreed to pay $1.1 million to the U.S. Attorney’s Office to settle false claims act allegations. This case arose from a qui tam complaint brought by two whistleblowers alleging that over a five-year period, Koch paid kickbacks to optometrists to induce referrals for patients for cataract surgeries. Notably, the settlement included a non-admission clause by Dr. Koch, denying liability and disputing the relators’ entitlement to attorneys’ fees, and the court entered a Stipulation of Partial Dismissal and Consent to Dismissal on Behalf of the United States shortly thereafter.
Continue Reading Settling False Claims Act Cases Involves More than Just Cutting a Check to DOJ
Encouraging Signs that DOJ May Finally Be Using Its Dismissal Authority
For several years now, the United States Department of Justice (“DOJ”) has indicated an increased desire to exercise its dismissal authority over qui tam actions, even over the objections of relators who initially brought the claims. However, the slight uptick in such dismissals was seemingly stunted while United States ex rel. Polansky v. Exec. Health Res., Inc., 599 U.S. 419 (2023) (which involved the scope of the government’s authority to dismiss False Claims Act (“FCA”) qui tam actions) made its way to the United States Supreme Court (“SCOTUS”).
Continue Reading Encouraging Signs that DOJ May Finally Be Using Its Dismissal AuthoritySignificant Implications for FCA Defendants: Second Circuit Clarifies “Willfulness” in McKesson Decision
In a pivotal ruling that may reshape the landscape of False Claims Act (“FCA”) litigation, the United States Court of Appeals for the Second Circuit adopted a nuanced interpretation of “willfulness” under the federal Anti-Kickback Statute (“AKS”).
Continue Reading Significant Implications for FCA Defendants: Second Circuit Clarifies “Willfulness” in McKesson DecisionMonumental Reduction in FCA Damages Based on Excessive Fines Clause
In a recent landmark decision, the United States District Court for the District of Minnesota dramatically reduced the damages and penalties awarded in a major False Claims Act (“FCA”) case. United States of America ex rel. Kipp Fesenmaier v. The Cameron-Ehlen Group, Inc., et al., Case No. 13-cv-3003 (D. Minn., Feb. 8 2024) (Dkt. 1086). The case initially concluded with a staggering judgment of over $487 million against the defendants. However, after post-trial motions, the court reduced the judgment over 55% to approximately $216 million, citing the Excessive Fines Clause of the federal constitution as a limiting factor.
Continue Reading Monumental Reduction in FCA Damages Based on Excessive Fines ClauseThe Complexities of Assessing Damages in FCA Cases
Calculating and predicting damages in a False Claims Act (“FCA”) case can be a daunting task for the most seasoned FCA practitioners. In fact, even judges presiding over years of litigation and weeks of trial can get it wrong by tens of millions of dollars.
Last week, the United States District Court for the District
OIG Issues Updated General Compliance Program Guidance: Overview of Key Elements & Changes
The Office of the Inspector General (OIG) of the U.S. Department of Health and Human Services (HHS) published the General Compliance Program Guidance (GCPG) on November 6, 2023. The GCPG provides updated descriptions of the seven elements of an effective compliance program that health care entities have long relied upon. The new guidance also includes
Changing Hands, Not Washing Them: CMS’ First Report on Nursing Home M&A Data
Last week, the Centers for Medicare & Medicaid Services (CMS) released data—for the first time—reporting on mergers, acquisitions, consolidations, and changes of ownership of Medicare enrolled hospitals and nursing homes over the past six years. This data, expected to be updated on a quarterly basis moving forward, has been lauded as an important step in improving transparency around nursing facility ownership and enhancing nursing home safety and quality of care. In conjunction with the release of CMS’ data, HHS’s Office of the Assistant Secretary for Planning and Evaluation (ASPE) released a related report analyzing the data and examining trends in changes of ownership over the past six years. In its report, ASPE also offers preliminary insights into how the data on ownership changes can support implementing policies bolstering competition in health care as well as ensuring program integrity in Medicare and Medicaid.
Continue Reading Changing Hands, Not Washing Them: CMS’ First Report on Nursing Home M&A DataNot-So-Charitable Donations: DOJ Achieves a $20 Million Settlement for a Backdoor Donation Scheme for Increased Medicaid Contributions
On April 6, 2022, BayCare Health System Inc. (BayCare) entered into a $20 million settlement under the False Claims Act with the U.S. Department of Justice (DOJ) to resolve allegations that it had made donations in order to improperly inflate the funding four of its hospitals received from the federal Medicaid program. According to the agreement, BayCare did not formally admit wrongdoing or liability; rather, BayCare settled in order to “avoid the delay, uncertainty, and expense of litigation.”
Continue Reading Not-So-Charitable Donations: DOJ Achieves a $20 Million Settlement for a Backdoor Donation Scheme for Increased Medicaid Contributions