Dr. John Pepe and Dr. Richard Sherman (“Relators”), acting as whistleblowers, brought a qui tam action against Fresenius Medical Care Holdings, Fresenius Vascular Care, Inc., and Dr. Gregg Miller (“Defendants”). Relators’ complaint alleged that the Defendants engaged in fraudulent billing practices under the False Claims Act (“FCA”) and analogous state laws. Last week, the United States District Court for the Eastern District of New York dismissed Relators’ case because they failed to plead their allegations with particularity as required by Federal Rule of Civil Procedure 9(b).Continue Reading Stringent Requirements for Pleading Fraud Under Rule 9(b).
False Claims Act (FCA)
General Allegations Without Representative Examples Are Insufficient to Survive a Motion to Dismiss
The United States District Court for the Northern District of Indiana recently dismissed a case involving allegations of fraudulent Medicaid claims and self-referrals. The case, United States of America and State of Indiana ex rel. Bradley A. Stephens v. Nuclear Cardiology Associates (“NCA”), serves as a critical reminder of the stringent requirements for pleading fraud under the False Claims Act (FCA) and the Stark Law.Continue Reading General Allegations Without Representative Examples Are Insufficient to Survive a Motion to Dismiss
The Anatomy of a Failed Qui Tam Case: Lessons from U.S v. Radiation Therapy Services
In the world of False Claims Act (“FCA”) litigation, the recent case United States ex rel. Robert C. O’Laughlin, M.D. v. Radiation Therapy Services, P.S.C., et al. serves as an important reminder of the need for concrete evidence when asserting qui tam FCA claims.Continue Reading The Anatomy of a Failed Qui Tam Case: Lessons from U.S v. Radiation Therapy Services
How much (information) is too much? Caselaw shines a light on avoiding privilege waiver.
United States of America v. Sutter Health is exemplary of the delicate balance courts must strike when dealing with attorney-client privilege. Here, the United States District Court for the Northern District of California denied the relator’s motion for determination as to waiver of privilege, but granted alternative relief.
This case involves alleged violations of…
Settling False Claims Act Cases Involves More than Just Cutting a Check to DOJ
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 Authority
Monumental 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 Clause
The 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…
“FCA ENFORCEMENT: DIFFERENT, BUT STILL HERE” – PART OF CROWELL & MORING’S RELEASE OF 2018 LITIGATION FORECAST
Crowell & Moring has issued its “Litigation Forecast 2018: What Corporate Counsel Need to Know for the Coming Year.”
The health care section of the Forecast, “FCA Enforcement: Different, But Still Here,” outlines how health care companies should expect continued enforcement of the False Claims Act, but with perhaps different emphasis …