Posted by Stephanie R. on Thursday, September 25th, 2014
If you’ve been following along, you’ll know that the federal Courts of Appeal are engaged in a near-even split with regard to the applicability of Federal Rule of Civil Procedure 9(b) in the False Claims Act context. In general, a civil plaintiff must set forth general facts in a complaint that tend to give rise to an actionable claim under a recognized civil law. However, Rule 9(b) imposes a concept known as “heightened pleading requirements” with regard to certain civil matters, including fraud. The same heightened pleading requirement is not mentioned in the language of the False Claims Act itself, resulting in a conflict between the courts as to the requisite specificity with which a plaintiff must describe the fraud they have witnessed.
Posted by Stephanie R. on Wednesday, September 24th, 2014
It’s another instance of healthcare fraud involving the federal Medicare and Medicaid systems. A prominent California neurosurgeon, his associates, and their distributorship network – Reliance Medical Systems LLC – are facing significant possible liability under the False Claims Act for engaging in unnecessary procedures in order to pad revenue. The allegations involve a complex combination of unlawful billing procedures, medically unnecessary spinal operations, and kickbacks for all involved.
Posted by Stephanie R. on Tuesday, September 23rd, 2014
While many aspects of the False Claims Act are firmly settled by consistent holdings by federal district and appellate courts, other areas are more grey – including how much weight should be given to the difference between a condition of payment and a condition of participation. In today’s article, we explore the merits of an amicus curiae brief filed by Massachusetts Attorney General Martha Coakley. In it, she urges the First Circuit to revive a qui tam lawsuit against Universal Health Services, Inc., citing the District Court’s “overly rigid” conditions for imparting liability under the False Claims Act.
Posted by Stephanie R. on Monday, September 22nd, 2014
On August 29th, the U.S. Department of Justice filed a complaint against two California-based nursing home facilities known as Country Villa Watsonville East and Country Villa Watsonville West – both of which participate in both Medicare and Medicaid (Medi-Cal). The complaint alleges horrific patterns of patient neglect, including the administration of government-reimbursed medications in order to render patients “more manageable” for Country Villa staff. The complaint, which was filed in United States District Court for the Northern District of California, advances the claim that Country Villa not only owes compensatory damages to the government for wrongful conduct toward Medicare and Medi-Cal patients, but seeks damages under the common law theories of unjust enrichment and payment by mistake. In addition, the False Claims Act allows for treble statutory damages ranging from $5,000 to $11,000 per violation.
Posted by Stephanie R. on Friday, September 19th, 2014
Medical corporation Merck & Co. will decidedly face the music in the ongoing class action and related anti-trust lawsuit involving its mumps vaccine – a product routinely given to babies and children for generations. The issue, which involves allegations of false compliance with FDA standards for vaccines, prompted a False Claims Act lawsuit: United States v. Merck & Co. This case was commenced by two virologists once employed with Merck, alleges a systematic and long-standing commitment by the company to lying about the efficacy of its mumps vaccination, thereby prompting possible exposure to liability under the federal False Claims Act. The government has not yet opted to intervene, but has reserved its right to join in the case in the future.
Posted by Stephanie R. on Thursday, September 18th, 2014
As we have reported in previous posts, Federal Rule of Civil Procedure 9(b) has emerged as an obstacle in some jurisdictions when applied to the pleadings submitted in False Claims Act cases. In sum, Rule 9(b) imposes heightened specificity requirements in certain federal filings. The rule is often applied in negligence cases, and specifically mentions fraud filings as within its purview. However, courts across the United States are split on exactly how specific False Claims Act pleadings must be, with some Circuits holding that Rule 9(b) does not apply to False Claims Act cases at all. Other Circuits have held that Rule 9(b) requires itemized, explicit, specific examples, at a transactional level, of intentional fraud in order for a False Claims Act case to survive a motion to dismiss.
Posted by Stephanie R. on Wednesday, September 17th, 2014
An Elkhart, Indiana-based spinal surgeon has agreed to pay $2.6 million to settle allegations under the False Claims Act. The surgeon and Texas-based Omni Surgical, L.P. were allegedly engaged in an unlawful kickback scheme in violation of the False Claims Act’s anti-kickback provisions. In general, any claim for reimbursement to a government healthcare agency (e.g., Medicare, Medicaid or Tricare) that arose due to an inappropriate financial arrangement between one or more healthcare providers could trigger False Claims Act liability for all parties involved. As is reiterated by the government following most resolutions of the kickback allegations, patients deserve honesty and candor from their provider, and should be not be referred to certain clinics or physicians based on an underlying financial arrangement.
Posted by Stephanie R. on Tuesday, September 16th, 2014
On the heels of a provocative op-ed in the New York Times discussing the nexus between Medicare and the expenses of nursing home care, the U.S. Court of Appeals for the Seventh Circuit issued its much-anticipated opinion in United States ex rel. Absher v. Momence Meadows Nursing Center, which involves the collision between the False Claims Act and nursing home providers’ submission of invoices for reimbursement. In its opinion, the Court reversed an expansive interpretation of one oft-cited trigger for FCA liability: worthless services. The opinion registers as pro-provider.
Posted by Stephanie R. on Monday, September 15th, 2014
Repeat offender Omnicare, a nationwide pharmacy services organization, was recently pitted against Fox, Rx, a Medicare Part D program sponsor, in a False Claims Act lawsuit, alleging several counts of fraud involving government healthcare programs. Unlike the liability faced by Omnicare in several other lawsuits, it was able to avoid facing civil consequences in this particular suit. This was primarily due to the fact that United States District Court for the Southern District of New York’s judge Denise Cote categorized Omnicare’s conduct as “irrelevant” to government “disbursement decisions.”
Posted by Stephanie R. on Friday, September 12th, 2014
In a recent False Claims Act case filed in Colorado, the federal government has decided to intervene after engaging in a preliminary investigation of the relator’s claims. The government, which intervenes in approximately 25 percent of all filed False Claims Act cases, will join as an active participant against Evercare Hospice and Palliative Care – a group accused of engaging in fraud against Medicare and Medicaid. There are actually several lawsuits ongoing against the group, which is run by parent company United Healthcare – also named in the suit.