Health Care Enforcement & Investigations

Mintz's Health Care Enforcement group analyzes trends in False Claims Act (FCA) investigations and lawsuits using data compiled its Qui Tam Database, the Department of Justice's (DOJ) annual report of FCA statistics, and the DOJ’s discussion of FCA enforcement trends.

The vast majority of False Claims Act recoveries in fiscal year 2022 came from health care–related cases, and new case filings remained high, despite an ongoing decline in health care FCA case volume. Mintz’s Health Care Enforcement Defense team explores FCA litigation trends using annual DOJ statistics and activity tracked in our database of health care whistleblower cases.

As many of our readers are likely aware, last week the Supreme Court agreed to hear a second False Claims Act (FCA) issue this term. Having previously accepted and heard argument on a case concerning the government’s authority to dismiss an FCA whistleblower case after declining to intervene, the Court has now granted certiorari to hear two cases addressing what constitutes a “knowing” violation of the FCA. Hanging in the balance is the fate of two lower court decisions that endorsed a powerful defense to FCA liability.

As illustrated by a recent Office for Civil Rights (OCR) settlement with a dental practice, health care entities continue to struggle with how to respond to negative online reviews while maintaining compliance with the HIPAA Privacy Rule. Given the significant reputational harm that negative reviews on Yelp and other social media and public platforms (Platforms) can create, providers may be tempted to respond to such negative comments with patient specifics in an attempt to mitigate harm to their businesses.

The Supreme Court recently denied petitions for writs of certiorari in three closely watched cases where parties asked the Court to clarify the heightened pleading standard governing fraud allegations under the False Claims Act (FCA). The heightened pleading requirements of Federal Rule of Civil Procedure 9(b) require that, for allegations of fraud (which include FCA claims), “a party must state with particularity the circumstances constituting fraud or mistake.” Among other things, a cause of action for “false claims” must allege the defendants submitted false claims, or caused false claims to be submitted, to the government. The crux of the issue petitioners asked the Court to address is whether, to meet Rule 9(b)’s requirements for FCA causes of action, relators must allege in the complaint specific details of false claims allegedly submitted to the government for payment. This issue typically arises in qui tam cases under the FCA after the government declines to intervene.  

On September 15, 2022, the Department of Justice (DOJ) announced a $7.9 million settlement with generic manufacturer Akorn Operating Company LLC (Akorn) to resolve allegations that Akorn caused the submission of over-the-counter (OTC) drugs to Medicare Part D in violation of the False Claims Act (FCA).  Because Medicare Part D only covers prescription drugs, the pertinent drugs were not eligible for Medicare reimbursement. The conduct at issue under this settlement is a relatively novel basis for FCA liability, but we may see similar government enforcement actions in the future as the federal government actively encourages drug manufacturers to “switch” prescription drugs to OTC status in order to enhance their accessibility and reduce costs. This blog post provides an overview and analysis of the settlement. 

In a significant win for False Claims Act (FCA) defendants, the Eighth Circuit recently reversed a district court decision that defendants violated the FCA premised on violations of the Anti-Kickback Statute (AKS). The Eighth Circuit adopted a stricter but-for causation standard for FCA claims based on AKS violations, holding that, in order to prevail on these claims, the government must prove that FCA defendants would not have submitted claims for particular items or services to Medicare or Medicaid absent the illegal kickbacks.

Disclosing known or suspected fraud to regulators can have its benefits.  As reported in a previous post, the Department of Justice (DOJ) issued policy guidance in 2019 on providing credit in False Claims Act (FCA) settlements to corporations for “disclosure, cooperation, and remediation” (the Policy Guidance).  Since then, the industry has been watching to see how  DOJ implements this Policy Guidance. 

Two settlements announced earlier this month seem to demonstrate that DOJ is applying the Policy Guidance in resolving FCA cases.  Although the facts of these two settlements differ significantly, they highlight the benefits of self-disclosure, cooperation with the government in its investigation, and proactive efforts to remediate non-compliance.

Last week, the Department of Justice (DOJ) announced another significant takedown that it described as “build[ing] on the success of the May 2021 COVID-19 Enforcement Action.”  As part of this enforcement effort, criminal charges were announced against 21 defendants across the country for their alleged involvement in various COVID-19 related fraud schemes that resulted in over $149 million in “COVID-19 related false billings to federal programs and theft from federally-funded pandemic assistance programs.” 

The Office of Inspector General for the Department of Health and Human Services (OIG) recently issued another favorable Advisory Opinion on patient incentives (e.g. gift cards or cash equivalents) given as part of patients’ treatment plans. Though the OIG reiterated its concern that cash and cash equivalents given to patients can present substantial fraud and abuse risks, the OIG concluded that the arrangement presented a minimal level of risk.

Health care providers, health information networks, health information exchanges, and health IT developers of certified health IT will want to take note of the information blocking claim submission trends recently published by the Office of the National Coordinator for Health Information Technology (ONC).

In our annual webinar, Mintz’s Health Care Enforcement Defense team reviewed the key health care fraud enforcement developments and trends from 2021, assessed their likely impact in 2022, and provided recommendations to avoid government scrutiny.