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.
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Regulatory Compliance
False Claims Act Spotlight (2 of 3): Recent Proposed Amendments to the FCA Fall Short of Cohesive and Substantive Change
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 Surprises Continue: The Biden Administration Delays Implementation of Certain Provisions of the No Surprises Act and Transparency in Coverage Final Rules Applicable to Providers and Insurers
In a FAQ published on August 20, 2021, the Departments of Labor, Health and Human Services, and the Treasury (collectively, the “Departments”) significantly delayed implementation of statutory requirements on surprise billing and price transparency, which we had previously summarized in a series of blog posts throughout this past year:
- No Surprises: Congress Enacts Surprise Bill Law and Adds Mandatory Billing Transparency
- No Surprises in Initial No Surprises Act Regulations
- New Federal Transparency Requirements Impacting Health Providers and Plans
Specifically, the FAQs focus on the implementation of certain provisions of the Affordable Care Act’s (the “ACA’s”) Transparency in Coverage Final Rules (the “TiC Final Rules”) and certain provisions of title I (the No Surprises Act) and title II (Transparency) of Division BB of the Consolidated Appropriations Act, 2021 (the “CAA”).…
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False Claims Act Spotlight (1 of 3): Sub-Regulatory Guidance Subjugated No More in FCA Enforcement Actions
By Daniel S. Weinstein on
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.…
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Proposal to Increase Penalties for a Hospital’s Failure to Comply with Price Transparency Rule
As discussed in a prior post, the Hospital Price Transparency Rule at 45 C.F.R. § 180.10 et. seq. (the “Rule”), requires all hospitals to provide clear, accessible pricing information about the items and services they provide by publicizing (1) the prices for 300 of their most “shoppable services” or services that can be scheduled by a consumer in advance; and (2) total charges, payor-specific negotiated rates, and discounted cash prices for individuals paying out-of-pocket. …
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Pass Go and Collect Regulatory Scrutiny: The Biden Administration Takes Aim at Consolidation & Anti-Competitive Business Practices in Health Care
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.…
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No Surprises Act Regulations – Insurer Requirements
This post provides an update to our previous publication summarizing the federal No Surprises Act and is part two of two in a series on new interim regulations implementing certain requirements of the No Surprises Act.
In part one of this series, we discussed the recently issued interim final rule implementing the No Surprises Act and the protections afforded to patients in connection with emergency services furnished by out-of-network (OON) facilities and providers or in connection with non-emergency services performed by OON providers at certain in-network facilities.
Here, in part two of the series, we address the interim final rule’s plan coverage requirements, the methodology a health plan offering group or individual health insurance coverage must use to determine a patient’s cost-sharing responsibility, and communications between insurers and providers detailing payment amounts.…
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No Surprises in Initial No Surprises Act Regulations
This post provides an update to our previous publication summarizing the federal No Surprises Act and is part one of two in a series on new interim regulations implementing certain requirements of the No Surprises Act.
The recently issued interim final rule governing one aspect of the No Surprises Act—the treatment of out-of-network (OON) and uninsured patients during emergencies and where services are provided at in-network facilities regardless of emergent status—largely reflects the statute but commits the adopting federal agencies (HHS, Labor and the Treasury) to expansive readings in favor of limiting patient liability where possible. …
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HHS Offers Increased Flexibility Regarding the Use of Provider Relief Fund Grant Money and Associated Data Reporting Obligations
By Daniel S. Weinstein & Ryan P. Blaney on
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.
In Significant Update to the Provider Relief Fund, HHS Sets New Deadlines for Providers to Spend PRF Grant Money and Report Uses
By Daniel S. Weinstein & Ryan P. Blaney on
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.