Qui Tam

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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).

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

In the world of legal battles, few are as complex and as fraught with procedural intricacies as qui tam actions brought under the False Claims Act (“FCA”).  The qui tam provision of the FCA allows private individuals, known as relators, to file lawsuits on behalf of the government and if successful, relators can receive a…

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

Over 40 percent of money recovered by the Department of Justice from False Claims Act (FCA) suits involve fraud against federal health care programs. More importantly, nearly 89 percent of all new FCA matters in 2014 originated qui tam lawsuits brought by whistleblowers.

Developments in FCA jurisprudence have innumerable consequences for the health care industry,…

 
After a protracted battle, Kaiser Foundation Health Plan, Inc. (Kaiser) recently settled a False Claims Act (FCA) qui tam case alleging that it falsely certified compliance with Medicare Advantage (MA) bidding instructions that relator claimed resulted in billions of dollars in damages to the United States. Crowell & Moring represented Kaiser in the litigation.

Kaiser’s former employee, Chris McGowan filed his initial complaint in 2009, but changed his theory of liability through a number of amendments as the case proceeded. Ultimately, he alleged that for its 2008 and 2009 MA bids Kaiser failed to comply with the CMS Office of the Actuary (OACT) “gain/loss margin” guidance directing that an MA plan’s proposed margin requirement be within a “reasonable range” of the margin requirements for its “other lines of business.” McGowan alleged that Kaiser’s certifications of compliance with MA bid instructions for 2008 and 2009 were false.Continue Reading Settlement in FCA Qui Tam Case Disposes of Claims Alleging Falsely Certified Compliance with Medicare Advantage Rating Instructions

On October 2, 2013, the federal district court in Columbia, South Carolina imposed a landmark $237 million judgment in a much-discussed False Claims Act case which was predicated on violations of the Physician Self-Referral (Stark) Law, U.S. ex rel. Drakeford v. Tuomey Healthcare System, Inc.1 The case was originally filed as a qui tam case in 2005 by a physician, Michael Drakeford. The federal government intervened in the case in 2007. 

The relator Drakeford and the government alleged that Tuomey Healthcare System (Tuomey) had established employment relationships with certain referring physicians which did not meet a Stark Law “exception,” thus tainting all Medicare referrals and claims submitted by Tuomey for services resulting from these physicians’ referrals. The physicians, employed through Tuomey’s affiliated medical practice groups, were part-time employees and their compensation covered only the physicians’ outpatient surgery services. The physicians’ salaries were adjusted according to collections received by the hospital for the services personally performed by the physicians. The physicians also received productivity and quality bonuses based on a percentage of these collections.  Continue Reading Landmark False Claims Act Judgment: What Hospitals and Healthcare Providers Should Know