A qui tam False Claims Act (FCA) complaint was recently unsealed against Cerebral, a telehealth startup that provides virtual mental-health therapy, in the U.S. District Court for the Northern District of Iowa.
Why it matters: The lawsuit is an example of the continued scrutiny companies face from the government and private whistleblowers related to telehealth prescriptions for controlled substances.
- The government has investigated telehealth providers for their prescribing practices during the COVID-19 pandemic.
- Although the government declined to intervene in this case, telemedicine prescriptions remain an area of focus for government regulators and would-be FCA relators.
Digging deeper: The relator, a former Cerebral practitioner, alleges that Cerebral violated the FCA and the federal Anti-Kickback Statute (AKS) by offering to reimburse the cost of her Drug Enforcement Administration (DEA) registration if she prescribed a specified and excessive number of controlled substances to patients.
- The relator alleges that Cerebral sought reimbursement from federal healthcare programs for prescriptions it knew were tainted by these alleged AKS violations.
- The complaint was filed in June 2022, and in October 2023 the government declined to intervene.
- As of this writing, Cerebral has not responded to the complaint.
Further coverage: For more information on these topics, see our articles below and subscribe to this blog.
- District Courts Wrestle with Causation in Kickback Cases While Circuit Courts Remain Divided
- Controlled Substances Act and False Claims Act Collide
- Telehealth Scrutiny Following COVID-19 Pandemic
If you have questions about how regulations related to telehealth services may affect your business, please contact the authors.