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

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 Authority

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 Decision

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 Clause

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

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

This week CMS continued its rapid response—average approval takes less than a week—to review and approve Social Security Act Section 1115(c) Appendix K and Section 1135 waivers to facilitate state Medicaid programs’ efforts to address the COVID-19 pandemic. CMS approved waiver applications from Colorado, Connecticut, Delaware, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Maryland, Massachusetts,

New York State is now considered the nation’s epicenter of the coronavirus outbreak, far surpassing all other states in confirmed COVID-19 cases.  Managed long-term care plans (“MLTCPs”) and other Medicaid managed care organizations (“MCOs”) are facing unprecedented financial and other challenges addressing the care needs of their members as COVID-19 continues to ravage more and more New Yorkers.  Earlier this week, the New York State Department of Health (“DOH”) acted to secure regulatory relief from the federal government for MLTCPs and MCOs as well as Programs of All-Inclusive Care to the Elderly (“PACE”) Organizations from the growing financial stress brought about by the coronavirus outbreak.

In recognition of the challenges faced by health care providers and payors alike, on March 13, 2020, the Secretary of Health and Human Services, invoking Section 1135 of the Social Security Act authorized the Centers for Medicare and Medicaid Services (“CMS”) to waive application of certain federal laws to ensure that sufficient health care items and services are available to meet the needs of Medicaid patients and plan members during the coronavirus public health emergency.  On March 23, 2020, DOH requested additional waivers from federal regulations under Section 1135 that impact among others, MCOs and MLTCPs, including:Continue Reading New York State Department of Health Seeks Additional 1135 Waivers From CMS To Alleviate Strain On Medicaid Managed Long-Term Care Plans and Other MCOs As Well As PACE Organizations Amidst Coronavirus Outbreak

On March 23, the Centers for Medicare and Medicaid Services (CMS) approved Section 1135 waiver requests submitted by the California Department of Health Care Services (DHCS) as part of its response to the COVID-19 pandemic.  The waiver requests were submitted by DHCS on March 16 and March 19, 2020.

As discussed in a previous blog post, Section 1135 authorizes the U.S. Department of Health and Human Services to waive federal Medicare, Medicaid, and Children’s Health Insurance Program requirements in order to respond to a public health or national emergency. As of March 24, CMS had approved Section 1135 waivers related to the COVID-19 pandemic from 13 different states.

With the approval granted by CMS, DHCS is permitted to take the following actions in regards to its Medicaid program (Medi-Cal), effective retroactively to March 1 and to extend until the end of the public health emergency:Continue Reading CMS Approves Medi-Cal Section 1135 Waivers