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

On September 26, 2022, the United States Department of Justice (DOJ) announced a $900 million settlement with pharmaceutical company Biogen Inc., which arose from alleged violations of the federal False Claims Act (FCA) and Anti-Kickback Statute (AKS) tied to payments from the company to physicians, which were allegedly intended to induce prescription of Biogen’s drugs. The matter initiated as a qui tam whistleblower complaint filed by an employee under the FCA.

Continue Reading DOJ Announces $900 Million Settlement Tied to Speaker Bureau Payments to Physicians

On February 9, 2022, the United States Department of Justice (DOJ) announced a $3.8 million settlement with Catholic Medical Center (CMC) of Manchester, New Hampshire. This settlement resolves allegations that CMC violated the False Claims Act (FCA) and federal Anti-Kickback Statute (AKS). The allegations were originally brought in a qui tam lawsuit filed by a physician who is a former employee of CMC.
Continue Reading DOJ Announces $3.8 Million Settlement to Resolve Allegations of False Claims Act and Anti-Kickback Statute Violations

On November 3, 2020, a Massachusetts Federal District Court issued a notable decision on the applicability of the state’s medical peer review privilege in a federal proceeding, determining that the privilege does not apply to documents requested in discovery as part of a qui tam False Claims Act (FCA) case. In United States ex rel. Wollman v. Massachusetts General Hospital, Inc. et al., Case Number 1:15-cv-11890-ADB, the court reviewed the purpose of the peer review privilege and precedent addressing the applicability of state privileges under the Federal Rules of Evidence, and concluded that the privilege should not apply because the “goal of the peer review privilege would not be thwarted if it was not applied” in a case predicated on alleged billing fraud. The court’s decision is instructive for health care providers and whistleblowers in connection with discovery and the applicability of medical peer review privileges to FCA cases.
Continue Reading Massachusetts Federal Court Declines to Apply State Medical Peer Review Privilege in Federal Whistleblower Case

On January 27, 2020, the Department of Justice (DOJ) announced a $145 million settlement with Practice Fusion Inc., an electronic health records (EHR) software company that resolves parallel criminal and civil investigations involving allegations of kickbacks, false claims, and non-compliance with federal EHR program requirements. We previously discussed a preliminary settlement in this case here, and in announcing the finalizing of that settlement the DOJ has shed more light on the allegedly improper conduct at issue. According to the DOJ, this is the first criminal action ever brought against an EHR company, and the “unique” deferred prosecution agreement (DPA) imposed by the DOJ against Practice Fusion that seeks “to ensure acceptance of responsibility and transparency as to” underlying conduct may reflect a new approach to settlements with corporate health care defendants.
Continue Reading DOJ Announces Settlement with EHR Company to Resolve Criminal and Civil Kickback Investigations Tied to Opioid Prescribing

On November 26, 2019, the Department of Justice (DOJ) announced a $26.67 million settlement with a laboratory testing corporation, Boston Heart Diagnostics Corporation (Boston Heart). The settlement resolves allegations of False Claims Act (FCA) violations related to alleged payments for patient referrals in violation of the Anti-Kickback Statute (AKS) and the Physician Self-Referral Law (PSR Law) – commonly known as the Stark Law – and other improper billing.
Continue Reading DOJ Announces $26.67 Million Settlement with Laboratory to Resolve FCA Allegations

On November 15, 2019, the Department of Justice (DOJ) announced it had reached a settlement with Sutter Health (Sutter) and Sacramento Cardiovascular Surgeons Medical Group Inc. (Sac Cardio) to resolve alleged violations of the Physician Self-Referral Law (PSR Law), commonly known as the Stark Law. Sutter is a California-based health services provider; Sac Cardio is a Sacramento-based practice group of three cardiovascular surgeons. The total settlement in excess of $46 million includes $30.5 million from Sutter to resolve allegations of an improper financial relationship specific to compensation arrangements with Sac Cardio. Sac Cardio has agreed to pay $506,000 to resolve allegations of duplicative billing associated with one of these compensation arrangements. Separately, the settlement includes another $15,117,516 from Sutter to resolve self-disclosed conduct principally concerning the PSR Law.
Continue Reading DOJ Announces Physician Self-Referral (Stark) Law Settlement in Excess of $46 Million with California Health System and Surgical Group