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In a settlement this week, the government rewards prompt action of a biopharma company by declining a penalty. Although an enforcement action by the Securities and Exchange Commission, the approach corresponds to a recent announcement by the Department of Justice. Companies that self-report, cooperate, and remediate will receive lenient treatment. This settlement makes clear just how valuable those efforts can be, allowing a company to settle violations of accounting controls and disclosure with no financial penalty whatsoever. On the other…
A federal judge rejects healthcare company’s “C” plea as not good enough.  Lessons from this decision apply to any healthcare provider trying to negotiate a specific sentence with the federal government. A summary of the judge’s criticism follows a short background about a C plea. Types of Guilty Pleas Federal Criminal Rule 11(c)(1) governs plea agreement procedure. It includes a limitation: “The court must not participate in these discussions.” The subsection describes three types of guilty pleas. Subsection (A) covers…
A recent civil settlement announced by the Department of Justice reminds providers that failing to repay the government can be as costly as fraudulent billing. Although a medical practice paid nearly $450,000 to resolve an investigation, the contested amount was only $175,000. That’s the kind of 250% penalty often associated with a false claim settlement. Similarly, this incident of failing to repay was brought to the government’s attention by a qui tam relator, as are instances of…
Rejecting a contrary holding in the Fourth Circuit, the Sixth Circuit decided a healthcare provider has no “fundamental right to participate in federal health care programs.” Accordingly, the Department of Health and Human Services (HHS) was correct to exclude a pharmacist from federal healthcare programs simply because he was convicted of misdemeanor misbranding.…
A fraudulent survey of doctors sponsored by attorneys for a qui tam relator doomed a False Claims Act (FCA) complaint against a pharmaceutical company. In a forceful opinion, United States District Judge Dennis Saylor IV, District of Massachusetts, found violation of ethical rules, excised more than 100 paragraphs of the complaint as a sanction, and dismissed the truncated complaint for failure to meet the particularity standards required for an FCA complaint under Fed. R.
The immense power wielded by the Department of Justice (DOJ) under the False Claims Act (FCA) has limits according to United States District Judge Anna J. Brown in the District of Oregon. This month the court decided DOJ cannot force the Act to apply to an “arm of the state” simply by intervening in the suit. Although a rare setback to a DOJ position on proper interpretation of the FCA, the issue may not yet be…
Last week a jury awarded millions of dollars to a former General Counsel who brought a whistleblower retaliation lawsuit against a life sciences company. (Verdict form here.) Does that verdict warn the health care industry to brace for a wave of False Claims Act (FCA) litigation brought by in house counsel who have turned relators? Certainly not. General Counsel brought the retaliation lawsuit under the Sarbanes-Oxley Act regarding possible violation of the Foreign Corrupt Practices Act that had been…
The Department of Justice (DOJ) announced this week that it collected another $4.7 billion during FY 2016 under the False Claims Act (FCA). This was the third largest haul in history, bringing total recoveries since FY 2009 up to $31.3 billion. Although DOJ did not say it directly, there seems no end in sight to huge recoveries. The sleeping statistic is the number new matters initiated. Although given less prominence than the total of…
In a decision that will impact every provider who supplies goods and services to the federal government, the Supreme Court today approved the implied false certification theory as a basis for liability under the False Claims Act (FCA). Specifically, in Universal Health Services v. Escobar, the Court ruled that the FCA is violated whenever a provider submits a claim for payment to the government yet misrepresents its compliance with material statutory, regulatory or contractual requirements—whether…
Overview After receiving scores of comments over nearly 4 years, the Centers for Medicare and Medicaid Services (CMS) has released its final rule (the “Final Rule”) addressing the reporting and returning of overpayments made to suppliers and providers who receive funds through Medicare. The Final Rule implements Section 6402(a) of the Affordable Care Act, which requires that suppliers and providers report and return overpayments by 60 days after (1) the overpayment is identified or (2)…