The health care industry is anxiously awaiting the First Circuit’s ruling on the standard of causation for actions brought under the False Claims Act (FCA) predicated on a federal Anti-Kickback Statute (AKS) violation. The First Circuit will decide whether the FCA “result[s] from” a kickback if that claim would not
Fraud & Abuse
Relator, No More? Florida Federal Court Declares Qui Tam Provisions of False Claims Act Unconstitutional, with Potentially Broad Implications for Government Fraud Litigation
By Vinay Kohli, G. Patrick Regan & D. Austin Rettew on
On September 30, 2024, the U.S. District Court for the Middle District of Florida issued an order dismissing a qui tam case under the False Claims Act (“FCA”) and holding the relator provisions of the FCA to be unconstitutional.[1] In reaching this conclusion, the Court reasoned that the…
CMS Proposes Additional Modifications to the Overpayment Rule Relating to the Deadline for Reporting and Returning Overpayments
By Matthew J. Westbrook & Whitney Phelps on
In the context of Medicare Advantage (“MA”) reform initiatives, we previously addressed the Centers for Medicare & Medicaid Services’ (“CMS”) December 27, 2022 proposal to amend its regulations set forth at 42 C.F.R. § 401.305(a) regarding the standard for an “identified overpayment” under Medicare Parts A–D…
Recent Circuit Litigation Continues to Highlight “But-For” Causation Requirement for the Government to Demonstrate an FCA Violation Predicated on an AKS Violation
By Matthew J. Westbrook & Vinay Kohli on
In recent years, a circuit split among the United States Courts of Appeals has emerged over how courts have interpreted the False Claims Act’s (“FCA”) causation element in cases where a violation of the Anti-Kickback Statute (“AKS”) is a predicate violation for the false claim. The spotlight is now on…
Using OIG’s Cross-Component Audit and Enforcement Data to Strengthen Your Compliance Program
By Matthew J. Westbrook on
The U.S. Department of Health and Human Services Office of Inspector General’s (OIG) core responsibility is to promote efficiency and economy in myriad programs by eliminating fraud, waste and abuse. For years, compliance professionals have come to rely on OIG’s advisory opinions, special fraud alerts, advisory bulletins and industry-specific guidance…
OIG Reaffirms Its Concern About “Carving Out” Federal Health Care Program Business
By Matthew J. Westbrook on
Last month, the Office of Inspector General (OIG) for the U.S. Department of Health and Human Services reaffirmed its longstanding position that an arrangement that “carves out” Federal health care program (FHCP) business is not dispositive with respect to whether such arrangement implicates the Federal Anti-Kickback Statute (AKS). Specifically, OIG…
Recent Supreme Court Case Affirms Government’s Power to Dismiss Qui Tam Suits
On June 16, 2023, the Supreme Court (the “Court”) in United States ex rel. Polansky v. Executive Health Resources affirmed the federal government’s power to dismiss a False Claims Act (“FCA”) action brought under the qui tam provisions whenever it chooses to intervene. Polansky is the second FCA case this summer in which the Court has ruled in favor of the federal government—i.e., the Department of Justice, acting through the Attorney General (“DOJ”). Writing for an 8-1 majority, Justice Kagan explained that DOJ receives considerable deference, even over the objection of the individual who raised the action (i.e., the relator or whistleblower), to dismiss cases that are inconsistent with DOJ’s interests.
The Supreme Court’s Ruling Narrows Available FCA Scienter Defenses
In a unanimous opinion, the United States Supreme Court (“Court”) recently held that the False Claims Act’s (“FCA”) scienter requirement refers to a defendant’s knowledge and subjective beliefs, rather than what a hypothetical reasonable person could have known or believed. As supported by the text of the FCA itself and by its common‑law roots, the Court explained that the “focus is what a defendant thought when submitting a claim—not what a defendant may have thought after submitting it.” Consequently, the Court vacated the holding of the Seventh Circuit and remanded the matter for further proceedings consistent with the Court’s opinion. Because the Seventh Circuit had affirmed a Federal district court’s grant of the defendants’ motions for summary judgment, the Court’s opinion effectively revives the FCA claim against the defendants.
Another Resolution by DOJ Pursuant to its Civil Cyber-Fraud Initiative Highlights Continued Efforts to Hold Companies Accountable for Ensuring Data are Secured
By Matthew J. Westbrook & Ryan P. Blaney on
We previously wrote about the United States Department of Justice’s (“DOJ”) Civil Cyber-Fraud Initiative (“CCFI”), which “aims to hold accountable entities or individuals that put U.S. information or systems at risk by knowingly providing deficient cybersecurity products or services, knowingly misrepresenting their cybersecurity practices or protocols, or knowingly violating obligations to monitor and report cybersecurity incidents and breaches.” In that post, we summarized DOJ’s first two False Claims Act (“FCA”) resolutions pursuant to the CCFI, which amounted to more than $9 million in recoveries.
Recent FCA and AKS Litigation Highlights Use of Different Standards in Different Circuits
In an important decision limiting the reach of the Federal Anti-Kickback Statute (42 U.S.C. 1320a-7b(b)) (“AKS”) and its application to violations of the False Claims Act (31 U.S.C. 3729, et seq.) (“FCA”), the U.S. Court of Appeals for the Sixth Circuit (“Sixth Circuit”) recently contended that, “[w]hile the word remuneration may be broad, it customarily requires a payment or transfer of some kind,” and mandated “but-for” causation standard for determining whether claims paid by Federal health care programs were tainted by an AKS violation such that they violated the FCA. See U.S. ex rel. Martin et al. v. Hathaway, et al., Case No. 22-1463, at 11 (6th Cir.) (appeal from 1:19-cv-00915, ECF Doc. No. 108 (W.D. Mich.)) (emphasis added).