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In recent years, there have been only a handful of corporate integrity agreements (“CIAs”) and integrity agreements (“IAs”) that have included a “conditional exclusion release” of the Office of the Inspector General for the United States Department of Health and Human Services’ (“HHS-OIG”) permissive exclusion authority under 42 U.S.C. § 1320a-7(b)(7) (“Permissive Exclusion Authority”).[1]  Inclusion of a conditional exclusion release is atypical, as HHS-OIG’s historical practice has been to provide an outright release of its Permissive Exclusion Authority in exchange for a CIA or IA.  It appears, based on an IA executed last month and the other recent CIAs and IAs, that a trend may be emerging.

Specifically, in December 2022, HHS-OIG entered into an IA with a Georgia-based physician, Aarti D. Pandya, M.D., and his practice, Aarti D. Pandya, M.D. P.C. (collectively, “Dr. Pandya”).  In atypical fashion, however, HHS-OIG required the IA to be for five years (as opposed to three years) and held Dr. Pandya to a conditional exclusion release contingent upon Dr. Pandya’s satisfactory completion of the IA (as opposed to outright providing a release of its Permissive Exclusion Authority).  This IA signals to the industry that HHS-OIG is not bound by precedent and that, perhaps, a belt and suspenders approach to resolving conduct allegedly violating the False Claims Act (“FCA”) may be emerging as HHS-OIG’s new norm.…

Continue Reading Another Unique Integrity Agreement Signals a Trend towards HHS-OIG’s Comfort with a Belt and Suspenders

This past week, the Supreme Court of the United States (Supreme Court) denied UnitedHealthcare Insurance Company’s (UnitedHealthcare) petition for a writ of certiorari (Petition) challenging, in part, the Centers for Medicare & Medicaid Services’s (CMS) Overpayment Rule, which requires Medicare Advantage (MA) plans, such as UnitedHealthcare, to return identified “overpayments” to CMS within 60 days.  With this denial, the Overpayment Rule remains in full force and effect, and UnitedHealthcare, among other MA plans, must comply or potentially face False Claims Act (FCA) liability.
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Continue Reading The Supreme Court Denies Petition Challenging CMS’s Overpayment Rule

Recently, in Siegel v. Snyder, Slip.Op. 07624, New York’s Appellate Division, Second Department interpreted New York’s peer review/quality assurance confidentiality statute in a manner that may require modifications to the standard documentation of such meetings.  New York’s Education Law 6527(3) shields from disclosure “the proceedings [and] the records relating to performance of a medical or a quality assurance review function or participation in a medical . . . malpractice prevention program,” as well as testimony of any person in attendance at such a meeting when a medical or quality assurance review function or medical malpractice prevention program was performed (see Logue v Velez, 92 NY2d 13, 16-17).  Public Health Law 2805-m(2) affords similar protection from disclosure for “records, documentation or committee actions or records” required by law, which includes peer review activity.…

Continue Reading Failure to Disclose Speakers at Protected QA Meeting Loses Protection for All Speakers

Over the past few weeks, we have covered recent updates to the False Claims Act (“FCA”), first discussing the recent recension of the “Brand Memo” and the resulting restoration of the Department of Justice’s willingness to use sub-regulatory guidance to bring FCA enforcement actions. In our second post, we outlined S.B. 2428’s proposal to shift the burden of proving materiality to defendants, provide for discovery reimbursement, address deference standards in motions to dismiss brought by the government in qui tam complaints, and extend whistleblower anti-retaliation protections. In this final post of our three-part series, we close out our discussion of the FCA with a review of a recent Seventh Circuit decision endorsing the use of an “objective reasonableness” defense in litigation brought under the FCA. We also highlight other recent court activity affecting enforcement of the FCA.…
Continue Reading False Claims Act Spotlight (3 of 3): Changing Landscape of the FCA in the Courts

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.

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Continue Reading False Claims Act Spotlight (2 of 3): Recent Proposed Amendments to the FCA Fall Short of Cohesive and Substantive Change

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.
Continue Reading False Claims Act Spotlight (1 of 3): Sub-Regulatory Guidance Subjugated No More in FCA Enforcement Actions

The U.S. Department of Justice (the “DOJ”) recently settled whistleblower False Claims Act (“FCA”) allegations against The University of Miami (“UMiami”) for $22 million, which resolves claims from three separate lawsuits related to billing practices at UMiami’s off-campus hospital-based facilities (“Off-Campus Hospital Facilities”) and fraudulent claims for laboratory services.
Continue Reading The University of Miami to Pay $22 Million to Settle Medicare False Claims Act Allegations

A recent Fourth Circuit decision, United States v. Mallory (988 F.3d 730), upheld damages and penalties for more than $100 million for violations of the Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)) (the “AKS”) and the False Claims Act (31 U.S.C. § 3729) by a blood testing laboratory and its contracted sales agents.  The Court held that commission payments made by the laboratory to its sales agents (sales companies that, in turn, hired and contracted salespeople to sell the laboratory blood tests), which were based on the percentage of revenue the sales agents generated for the laboratory through marketing services, constituted improper “remuneration” that intended to induce the sales agents to sell as many laboratory tests as possible. The defendants failed to show that the arrangements fit within an AKS Safe Harbor.
Continue Reading Developments Regarding Commission-Based Compensation Arrangements with Independent Contractors