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Topic: Enforcement

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Judge doubles down on finding of materiality in FCA case

Federal courts continue to grapple with applying the “materiality” standard that is needed to cause a Stark Law violation or other underlying compliance matter to trigger False Claims Act liability. Although we have recently begun to gain a clearer view of what contractual requirements will not likely be viewed as material, at least one federal … Continue reading

Government audits shift to high error rates and significant variances

CMS has revamped its approach to pursuing alleged improper payments. Its new audit strategy with Medicare Administrative Contractors (MACs) will target providers and suppliers with the highest error rates or the most significant deviations. This is a significant shift in strategy to focus on outliers when seeking recoupment. Under the new audit process, through a process of … Continue reading

DOJ charges 412 individuals in largest healthcare fraud takedown in US history

On Thursday, the DOJ announced charges against 412 individuals for their alleged participation in healthcare fraud schemes involving approximately $1.3 billion in false billings.  This marks the largest national healthcare fraud takedown in U.S. history—topping the DOJ’s announcement of charges against 301 individuals in June 2016. The enforcement actions spanned across 41 federal districts and … Continue reading

Bipartisan effort to provide greater transparency into federally-negotiated settlement agreements

This week, U.S. Senators Elizabeth Warren (D-MA) and James Lankford (R-OK) reintroduced a bill designed to provide the public with more information about settlement agreements between federal agencies and companies and individuals. The bill, called the Truth in Settlements Act, was first introduced in 2014. In September 2015, it was unanimously passed by the Senate … Continue reading

DC Circuit affirms injunction against US$54b Anthem-Cigna merger

A split DC Circuit panel affirmed a U.S. District Court’s permanent injunction against the US$54 billion merger between Anthem and Cigna, holding the district court did not abuse its discretion in enjoining the merger based on Anthem’s failure to show the extraordinary efficiencies necessary to offset the anticompetitive effect of the merger in fourteen states. … Continue reading

Federal district court endorses Stark liberalization of writing requirement

On March 15, a federal district court in the Western District of Pennsylvania endorsed CMS commentary from November 2015 that dramatically liberalized the “written agreement” requirement of core Stark exceptions, thus providing some new insights as to what may be the outer limits of CMS’s new approach. When ruling on cross motions for summary judgment … Continue reading

CVS customers denied class certification in lawsuit alleging overcharging for generic prescriptions

On Tuesday, March 21st, the U.S. District Court for the Northern District of California denied class certification in a suit alleging that CVS had overcharged insurance companies for generic prescriptions, resulting in higher copayments for customers. Corcoran, et al. v. CVS Health, et al., No. 15-cv-03504-YGR. The putative class alleged that in 2008 CVS introduced … Continue reading

Fourth circuit declines to rule on the appropriateness of statistical sampling in FCA cases

As expected after oral arguments, the Fourth Circuit Court of Appeals declined to decide whether parties may use statistical sampling to prove False Claims Act liability in United States ex rel. Michaels v. Agape Senior Community, Inc., Nos. 15-2145 and 15-2147, by finding that the issue was fact-driven and thus not appropriate for interlocutory review.  … Continue reading

How pharma cos. can shape the drug-pricing landscape

Unless you have been living under a rock, you no doubt have noticed that drug price increases have resulted in a wave of public criticism, playing right into the media’s demonization of the pharmaceutical industry, and even becoming an election year issue. The United States is one of the only developed nations that largely does … Continue reading

FDA enforcement spike targets drug promotions

The Food and Drug Administration’s (FDA) Office of Prescription Drug Promotion (OPDP) focused its end-of-year enforcement efforts on drug manufacturers’ promotions on tv, social media ads, and electronic promotion efforts. The OPDP issued in December six of its eleven total enforcement letters for 2016.  The eleven disciplinary letters represents a small spike from previous years’ … Continue reading

Teva Pharmaceuticals to pay nearly US$520M in record-breaking FCPA settlement

The world’s largest manufacturer of generic pharmaceuticals, Israeli-based Teva Pharmaceutical Industries Ltd. (“Teva International”), and certain of its global subsidiaries agreed to pay nearly US$520 million and enter into a Deferred Prosecution Agreement (“DPA”) to resolve allegations that the companies bribed government officials in Russia, Ukraine, and Mexico, in violation of the U.S. Foreign Corrupt … Continue reading

DOJ recovers $4.7 billion in 2016, third highest in FCA history

The Department of Justice (“DOJ”) announced yesterday that it recovered over $4.7 billion in fiscal year 2016 in civil cases involving claims of fraud against the government under the False Claims Act (“FCA”).  This is the third largest annual recovery in FCA history and one of the largest in recent years, easily surpassing last year’s … Continue reading

First and Fourth Circuit Courts of Appeal hear oral arguments in two key FCA cases

Last week, the Fourth Circuit and First Circuit heard oral argument in two separate cases dealing with key False Claims Act (“FCA”) issues. First, the Fourth Circuit Court of Appeals heard oral arguments for the interlocutory appeal in United States ex rel. Michaels v. Agape Senior Community Inc., Nos. 15-2145 and 15-2147.  Second, in the … Continue reading

No monetary penalties for manufacturer providing physicians with free vaccine refrigeration storage system

In an Advisory Opinion issued on September 23, 2016, the U.S. Department of Health and Human Services Office of Inspector General (“OIG”) announced that  it would not impose administrative sanctions against the manufacturer of a vaccine refrigeration system (the “Requestor”) for providing the devices to physicians without charge.  This development comes at a critical time … Continue reading

Ninth circuit upholds conviction for physician for re-using single use devices

Last week, the Ninth Circuit affirmed a physician’s conviction for conspiracy to distribute an adulterated device with intent to defraud or mislead in violation of Section 331(k) of the federal Food, Drug and Cosmetic Act (FDCA). The physician – who dubbed his own practice “The McDonald’s of Urology” because of the high volume of patients … Continue reading

HHS update: Looking toward audits and increased enforcement

The Department of Health and Human Services and its Office of Civil Rights (OCR) are capping off a very active 2016. In the last 6 months, the OCR has released a new audit protocol, announced new rounds of HIPAA audits, and stepped up enforcement. The flurry of activity comes after a prolonged period of anticipation in … Continue reading

Physicians’ compensation structure results in $17M Stark Law fine and CIA for hospital

Lexington Medical Center (“LMC”), a 428-bed hospital in South Carolina, has agreed to pay $17 million to resolve allegations that it violated the federal False Claims Act (“FCA”), 31 U.S.C. §§ 3729 et seq., and Physician Self-Referral Law (“Stark Law”), 42 U.S.C. § 1395nn, by allegedly providing improper financial incentives to 28 physicians for referrals.… Continue reading
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