A federal district judge recently denied a motion to dismiss filed by the US Office of the Comptroller of the Currency (OCC) in a lawsuit brought by the New York State Department of Financial Services, which challenged the OCC's decision to begin accepting applications from fintech companies for special purpose national bank charters.
In a recent decision, the Tenth Circuit reversed a district court's dismissal of qui tam claims, reasoning that the relator's allegations had satisfied Rule 9(b) of the Federal Rules of Civil Procedure. Among other things, the defendant contended that the court's intervention is necessary to resolve a deep circuit split on whether Rule 9(b)'s particularity requirement can be relaxed where a defendant exclusively holds the information necessary to state a claim.
The Supreme Court recently heard an oral argument in a case that appears likely to resolve a circuit split on a question of critical importance: in non-intervened False Claims Act cases, are relators entitled to invoke the act's alternative 10-year statute of limitations? Clarification of the circuit split on the availability of the 10-year statute of limitations will have a significant impact on False Claims Act cases throughout the United States.
The Third Circuit recently affirmed and vacated in part a district court ruling granting the United States' motion for summary judgment. The case raised, among other things, the issue of whether an individual without any ownership interests in a company can face False Claims Act liability for the company's failure to perform a required act to qualify for reimbursement and whether an unsworn statement is sufficient to create a material issue of fact when weighed against facts admitted during a plea colloquy.
The Department of Justice recently filed a complaint in intervention against Sutter Health and its affiliate Palo Alto Medical Foundation (PAMF) in a False Claims Act suit, alleging that the defendants had knowingly submitted and caused the submission of unsupported diagnosis codes for Medicare Advantage patients in order to increase reimbursements from Medicare. Among other things, Sutter and PAMF allegedly failed to provide any meaningful training to affiliated physicians.
The Department of Justice (DOJ) is pursuing a compounding pharmacy and its private equity fund owner, alleging that the pharmacy filed claims with Tricare that were rendered false by alleged kickbacks. However, a magistrate judge has filed an opinion recommending that the False Claims Act claims be dismissed due to the DOJ's failure to adequately plead its claims on either an implied or express certification theory of liability.
A recent US Court of Appeals for the Eighth Circuit decision follows a growing trend among courts in tightening False Claims Act pleading requirements. The court affirmed the dismissal of a qui tam action brought against a non-profit hospital because the relators had failed to meet the particularity standard set out under Rule 9(b) of the Federal Rules of Civil Procedure.
The Department of Justice (DOJ) recently announced that it had recovered more than $2.8 billion from False Claims Act (FCA) cases in the 2018 fiscal year. Although this number continues a multi-year downtrend in overall FCA recoveries, healthcare fraud remains a major DOJ focus. Of the $2.8 billion, $2.5 billion was extracted from various segments of the healthcare industry, including through major settlements with pharmaceutical and medical device manufacturers.
Health policy issues are high on the agenda of the new Congress. The stated priorities for the new House majority include reducing drug prices, defending the Affordable Care Act, addressing the opioid abuse crisis and investigating the pharmaceutical industry. Given the potential for at least some bipartisan cooperation on each of these priorities, stakeholders in the healthcare industry should be prepared for legislative and regulatory opportunities and challenges.
The Department of Justice (DOJ) recently stepped in to seek the dismissal of high-profile False Claims Act litigation being pursued by relators after the government initially declined to intervene. The DOJ's recent action, which pertains to approximately a dozen lawsuits involving pharmaceutical manufacturers and third-party service providers, is further evidence that the Granston Memo, in which the DOJ articulated clearer standards for seeking dismissal of non-intervened cases, has real teeth.
The Department of Justice (DOJ) recently announced that it had intervened in a False Claims Act suit against Sutter Health and its affiliate Palo Alto Medical Foundation. This intervention is the latest example of the DOJ's aggressive enforcement under the False Claims Act in the Medicare Advantage space.
The five US federal agencies responsible for implementing the Volcker Rule have individually released a related notice of proposed rulemaking. The notice proposes amendments to the Volcker Rule regulations that would implement two statutory changes required by the Economic Growth, Regulatory Relief and Consumer Protection Act. Comments in response to the notice must be received by the agencies within 60 days of its publication in the Federal Register.
The government has intervened in a qui tam suit against a compounding pharmacy and its private equity fund owner in which it is alleged that the pharmacy filed claims with Tricare that were rendered false by kickbacks. The opinion provides further guidance as to the circumstances under which a private equity fund investor may incur False Claims Act liability as a result of its active involvement in a portfolio healthcare company that submits allegedly false claims.
In the recent election, the Democrats captured a majority in the House of Representatives and Representative Maxine Waters (D-Calif) is now in line to lead the House Financial Services Committee. As such, it is expected that a significant shift in legislative efforts relating to the financial services industry will occur. During the first Financial Services Committee hearing since the election, Waters announced that deregulation efforts are finished.
Former Bayada Home Health Care employees recently alleged that the company had falsely billed Medicare for patients that it had known were not "homebound". Bayada moved to dismiss the suit on the ground that each employee had signed a separation agreement releasing Bayada from "any and all claims" prior to filing the False Claims Act lawsuit. With no binding Third Circuit precedent, the district court looked for guidance among other circuits that pre-filing releases can bar False Claims Act claims.
Evidence is mounting that the Department of Justice (DOJ) is willing to pursue private equity funds in False Claims Act cases, particularly ones based on alleged violations of healthcare fraud and abuse laws. Earlier in 2018, the DOJ intervened for the first time in one such False Claims Act case against a private equity sponsor, the fund's portfolio pharmacy and two pharmacy employees.
In July 2018 the Office of the Comptroller of the Currency (OCC) announced its decision to begin accepting applications from fintech companies for special purpose national bank charters (the Fintech Charter Decision). The New York State Department of Financial Services recently filed a federal court complaint seeking to enjoin further actions by the OCC to implement the Fintech Charter Decision and related actions, arguing that such acts are lawless, ill-conceived and destabilising for financial markets.
The US District Court for the District of Columbia recently vacated CMS's 2014 final overpayment rule, applicable to the Medicare Advantage programme, granting summary judgment to UnitedHealthcare that the final rule violated the Medicare statute, was inconsistent with the Affordable Care Act and the False Claims Act and violated the Administrative Procedures Act. Because the decision vacates the overpayment rule entirely, further rulemaking may be necessary.
The Office of the Comptroller of the Currency (OCC) recently announced – to much anticipation – that it will begin accepting applications from fintech companies for special purpose national bank charters (commonly referred to as 'fintech charters'). However, state banking regulators are likely to once again challenge the OCC's authority to grant fintech charters, which could create some uncertainty for early applicants.
The Sixth Circuit recently resurrected the relator's case in United States ex rel Prather v Brookdale Senior Living Communities, Inc. In a two-to-one decision, the majority held that the relator's materiality and scienter allegations sufficed under Universal Health Services, Inc v United States ex rel Escobar. The gulf between the majority and the vigorous dissent by the judge reflects persistent questions about how Escobar applies at the pleading stage.