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Daniel S. Weinstein

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This is the second installment in our series of posts covering recent developments in False Claims Act (“FCA”) doctrine and practice, with the first post discussing the rescission of the “Brand Memo” and restoring the role of sub-regulatory guidance in FCA enforcement actions. A third post, to come later this week, will address recent federal court cases construing the FCA.

In July 2021, Senator Chuck Grassley led a bipartisan group of senators in introducing S.B. 2428, the “False Claims Amendments Act of 2021,” which aims to address legal developments in FCA doctrine that, according to the bill’s sponsors, made it “more difficult for plaintiffs and whistleblowers to succeed in lawsuits against government contractors engaged in fraud.” S.B. 2428 proposes amendments to the FCA in four key areas more fully described below:

  • to shift the burden to defendants to disprove plaintiffs’ showing of materiality of alleged FCA misconduct;
  • to provide a means by which the government can seek reimbursement for costs incurred for responding to burdensome discovery requests;
  • to resolve a Circuit Court split regarding the appropriate standard of review for evaluating government’s (c)(2)(A) motions to dismiss qui tam complaints; and
  • to extend the FCA’s anti-retaliation whistleblower protections.

The False Claims Act (“FCA”) is a punitive civil statute that acts as the federal government’s primary tool for combatting fraud in government health care programs, such as Medicare, Medicaid, and Tricare. In fiscal year 2020 alone, the Department of Justice (“DOJ”) obtained more than $2.2 billion in FCA settlements and judgments (not including potential recoveries from pending cases or ongoing negotiations); the largest of these many recoveries came in the health care and pharmaceutical sectors, with several recoveries totaling over $100 million each.

Given the frequency of FCA application in the health care context, and despite this vast body of law and commentary spanning more than a century and a half since the FCA’s inception, novel applications and interpretations of the law still arise, especially as the health care industry evolves and new modes of payment and care delivery come to the fore. In 2021, the FCA has once again been the focal point of government attention, with a DOJ memorandum, proposed federal legislation, and recent federal court decisions adding new context and authority to guide future applications of the law.

This post is the first of three covering recent FCA updates, and in it we discuss the re-emergence of federal guidance as a tool in the belt of the DOJ in enforcing the FCA.

Given the current political dynamic within Congress, the chances of the Biden Administration enacting significant, substantive health care legislation appear slim in the short-term. Thus, the Biden Administration has sought alternative routes to advance its policy priorities, mainly through budget reconciliation (see here for a comprehensive explainer from the Congressional Research Service) and agency regulation. For example, we have previously written here and here about the “No Surprises Act”, enacted through the legislative short-cut of budget reconciliation as part of the 2021 Consolidated Appropriations Act, and the Biden Administration’s new regulations implementing consumer protections against surprise medical bills. In this mold, President Biden’s July 9 Executive Order on Promoting Competition in the American Economy (the “Order”) appears to lay out an aspirational, yet somewhat more practical agenda to implementing reforms in the health care sector, as compared to relying on new legislation coming through Congress.

The Order tasks federal agencies across the “whole-of-government” to “protect competition in the American economy” by acting on 72 regulatory initiatives, to be coordinated by a newly established “White House Competition Council” with representatives from key federal agencies. While the “whole-of-government” is involved and the entirety of the U.S. economy is targeted, there is a distinct focus among these initiatives on “improving health care” by addressing “overconcentration, monopolization, and unfair competition” in the sector. The Order specifically cites four areas in the health care sector ripe for renewed enforcement and regulatory attention with the goal of lowering prices, promoting competition, and benefiting consumers.

This is the second of two posts discussing the June 11, 2021 updates to the PRF reporting requirements and FAQs.

As discussed in our earlier blog post, on June 11, 2021, the U.S. Department of Health and Human Services (“HHS”) released revised COVID-19 Provider Relief Fund (“PRF”) Reporting Requirements, superseding all prior versions of reporting requirements issued by HHS, along with associated revised PRF FAQs, Reporting Portal FAQs, and a Reporting Portal Registration User Guide that each make conforming changes. In addition to the new deadlines discussed in the prior post, the June 11 PRF updates offer providers more clarity into the the priority of eligible uses, required reporting elements, and instructions on how to return unused funds.

This is the first of two posts discussing the June 11, 2021 updates to the PRF reporting requirements and FAQs.

On June 11, 2021, the U.S. Department of Health and Human Services (“HHS”) released revised COVID-19 Provider Relief Fund (“PRF”) Reporting Requirements, superseding all prior versions of reporting requirements issued by HHS, along with associated revised PRF FAQs, Reporting Portal FAQs, and a Reporting Portal Registration User Guide that each make conforming changes. The updated Reporting Requirements come just three weeks prior to when PRF recipients would have been required to expend all received funds and when reporting was scheduled to commence (July 1, 2021).

Significantly, the updates give providers a longer runway to use funds, clarify the definition of “COVID-19 patient”, and provide insight into potential upcoming PRF distributions. The updated Reporting Requirements represent the Biden Administration’s first actions to modify the PRF, which distributes federal grants to help providers offset revenue shortfalls and expenses incurred due to the COVID-19 pandemic.

The COVID-19 pandemic has seen a wave of telehealth policy changes across the nation at both federal and state levels. Such changes have expanded access to health care and addressed underutilization in chronic disease management while minimizing the risk of exposure for individuals seeking care. One such policy change in particular has received widespread attention and support from industry stakeholders and lawmakers alike: expansion of telehealth to include audio-only telephonic communications. However, the longevity of telehealth’s expansion to audio-only services remains uncertain as states and the federal government each pursue revisions to pandemic-era policies and flexibilities.

The latest COVID-19 stimulus bill, the American Rescue Plan of 2021 (the “Act”), enacted on March 11, 2021, provides $1.9 trillion in funding for various COVID-19 relief measures. However, while the Act includes many funding provisions, including those funding direct assistance to lower-income individuals and families, expanding “Obamacare” insurance subsidies and availability, increasing federal medical assistance percentage (“FMAP”) rates for Medicaid programs under certain circumstances, supporting public health workforce development, funding technical assistance to skilled nursing facilities (“SNFs”), and bolstering COVID-19 vaccine and testing efforts, it also has a few provisions that create new or directly augment existing financial supports available to providers and hospitals that have sustained losses during the pandemic.

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