On March 12, 2024, the U.S. Court of Appeals for the Second Circuit issued an important decision interpreting the “willfulness” standard necessary to find a violation of the federal Anti-Kickback Statute (AKS). The decision provides important guidance for health care and pharmaceutical organizations on what constitutes a knowing violation of the AKS and for counsel

This post was co-authored by Josh Yoo, legal intern at Robinson+Cole. Josh is not admitted to practice law.

Health care entities maintain compliance programs in order to comply with the myriad, changing laws and regulations that apply to the health care industry. Although laws and regulations specific to the use of artificial intelligence (AI) are limited at this time and in the early stages of development, current law and pending legislation offer a forecast of standards that may become applicable to AI. Health care entities may want to begin to monitor the evolving guidance applicable to AI and start to integrate AI standards into their compliance programs in order to manage and minimize this emerging area of legal risk.

Executive Branch: Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence

Following Executive Order 13960 and the Blueprint for an AI Bill of Rights, Executive Order No. 14110 (EO) amplifies the current key principles and directives that will guide federal agency oversight of AI. While still largely aspirational, these principles have already begun to reshape regulatory obligations for health care entities. For example, the Department of Health and Human Services (HHS) has established an AI Task Force to regulate AI in accordance with the EO’s principles by 2025. Health care entities would be well-served to monitor federal priorities and begin to formally integrate AI standards into their corporate compliance plans.

  • Transparency: The principle of transparency refers to an AI user’s ability to understand the technology’s uses, processes, and risks. Health care entities will likely be expected to understand how their AI tools collect, process, and predict data. The EO envisions labelling requirements that will flag AI-generated content for consumers as well.
  • Governance: Governance applies to an organization’s control over deployed AI tools. Internal mechanical controls, such as evaluations, policies, and institutions, may ensure continuous control throughout the AI’s life cycle. The EO also emphasizes the importance of human oversight. Responsibility for AI implementation, review, and maintenance can be clearly identified and assigned to appropriate employees and specialists.
  • Non-Discrimination: AI must also abide by standards that protect against unlawful discrimination. For example, the HHS AI Task force will be responsible for ensuring that health care entities continuously monitor and mitigate algorithmic processes that could contribute to discriminatory outcomes. It will be important to permit internal and external stakeholders to have access to equitable participation in the development and use of AI.

Continue Reading Forecasting the Integration of AI into Health Care Compliance Programs

On November 15, 2023, the U.S Department of Justice (DOJ) announced a $45.6 million consent judgment (Settlement) with six skilled nursing facilities (SNFs), as well as the owner of the SNFs and its management company which managed the SNFs, to resolve alleged violations of the False Claims Act (FCA) tied to medical director arrangements violating the Anti-Kickback Statute (AKS). The Settlement is notable for its inclusion of the owner and the management company in addition to the SNFs, which indicates DOJ’s interest in scrutinizing the actions of individuals and management entities in connection with problematic arrangements under federal fraud and abuse laws.Continue Reading DOJ Settlement Targets Owner and Management Company in Addition to Post-Acute Care Facilities

On October 13, 2023, the Office of Inspector General (OIG) published Advisory Opinion 23-07 (Advisory Opinion), in which the OIG issued a favorable opinion regarding a physician group employer’s proposal to pay bonuses to its employed physicians based on net profits derived from certain procedures performed by the physicians at ambulatory surgery centers.Continue Reading OIG Issues Favorable Opinion Regarding Physician Group’s Proposal to Pay Bonuses to its Employed Physicians Based on Net Profits

On June 26, 2023, Connecticut Governor Ned Lamont signed into law Public Act 23-129: “An Act Concerning Liability for False and Fraudulent Claims” (the Act). The Act expands application of Connecticut’s False Claims Act (CFCA) to all claims for money or property to the state of Connecticut (except as expressly provided in the CFCA) and accordingly expands the scope of conduct covered by the CFCA. The Act does so by removing the current limitation on the CFCA’s applicability to only state-administered health or human services programs. The Act took effect July 1, 2023.Continue Reading Connecticut Expands Applicability of State False Claims Act

This post is co-authored by Seth Orkand, co-chair of Robinson+Cole’s Government Enforcement and White-Collar Defense Team.

On June 1, 2023, the U.S. Supreme Court issued a unanimous opinion in the highest-profile False Claims Act (FCA) case for many years, concluding that a party’s subjective belief as to whether it overcharged Medicare and Medicaid

On March 29, 2023, the Department of Justice’s (DOJ) Office for the Eastern District of Michigan announced a notable set of three settlements (collectively, the Settlement) in excess of $69 million dollars total with a regional hospital system (Hospital) and two individual physicians, respectively.Continue Reading Stark Settlement Targeting Hospital and Physicians a Reminder for Health Care Organizations

On December 27, 2022, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule (Proposed Rule) which proposes certain policy and technical changes to Medicare regulations, including a notable change to the current standard under the “60-Day Rule” for identifying a Medicare overpayment. Specifically, CMS indicated that it is proposing to (i) “adopt by reference” the federal False Claims Act’s (FCA) definitions of “knowing” and “knowingly” as governing when an overpayment is identified, and (ii) eliminate the “reasonable diligence” standard that has been in place, but subject to challenges, for a number of years.Continue Reading No More Reasonable Diligence? CMS Proposes to Change Standard for Identifying Medicare Overpayments to Align with False Claims Act

On October 17, 2022, the United States Department of Justice (DOJ) announced a $13 million settlement with health care services provider Sutter Health, which arose from alleged violations of the federal False Claims Act (FCA).  These alleged FCA violations relate to Sutter Health billing the United States for toxicology screening tests performed by other labs.Continue Reading DOJ Announces $13 Million Settlement Related to Improper Billing for Lab Tests

On October 17, 2022, the Supreme Court denied certiorari in three cases asking the court to resolve a circuit split regarding the application of the particularity pleading requirement for allegations of fraud in False Claims Act (FCA) cases, as required under Federal Rule of Civil Procedure 9(b). The cases are: Johnson, et al. v. Bethany Hospice, 21-462; U.S., ex rel. Owsley v. Fazzi Associates, Inc., et al., 21-936; and Molina Healthcare, et al. v. Prose, 21-1145. Molina also presented a second question over which circuits had split, regarding the correct interpretation of Universal Health Services, Inc. v. United States ex rel. Escobar and whether a request for payment without specific representations can be actionable under an implied false certification theory. (Petition for Writ of Certiorari).Continue Reading Supreme Court Denies Certiorari in Three FCA “Particularity” Cases