In recent years, the overwhelming risk of devastating large-scale payments under federal and state False Claims Act (FCA) laws, including those initiated by private qui tam relators, has been borne by health care and life sciences companies.
The technical complexity of the health care reimbursement laws, coupled with the strong financial incentives that FCA treble damages provide, offers great encouragement to federal and state enforcement authorities and private parties litigating in their name. And no area of health care has proved immune to the extraordinary breadth and power of suits brought under FCAs. Even in cases that do not result in verdicts, settlements, or other payments, mere FCA investigations are costly, disruptive, and destructive of corporate goodwill and market value. In short, in today’s litigious environment, it is not much of an exaggeration to say that there are only two kinds of health care and life sciences companies: those that have been subject to FCA matters and those that will be unless the latter have benefitted from aggressive counsel at every stage of an investigation or lawsuit.
Our Federal and State False Claims Act (Including Qui Tam) group rigorously defends health care and life sciences clients in FCA investigations, enforcement actions, and lawsuits. Clients also turn to us to help them create and implement compliance strategies to avoid FCA litigation in the first place.
Navigating Each Stage
Our group guides companies and individuals through the entire response to FCA claims, up to and including trial. From the first federal or state subpoena, Civil Investigative Demand (CID), or other inquiry, our experienced lawyers act with speed and discretion to anticipate and resolve the issues with our government counterparts. We bring uncommonly strong assets to our clients’ defense, most notably our deep bench of health care attorneys and regulatory consultants—people whose knowledge of governing statutes and regulations meets and often exceeds that of both governments' and relators’ counsel. We are known for our ability to spot weaknesses in the arguments of government enforcers and whistleblowers and for convincing federal and state regulators and litigators to decline to pursue cases at an early stage, before substantial resources are committed.
Seeking Optimal Outcomes
In a regulatory environment where the reputational damage to a company can be at least as severe as potential financial penalties, clients can look to us to approach their case discreetly, avoiding undue media attention or operational disruption. Many of our most successful outcomes are achieved with no press exposure at all. If a case is headed for settlement, we work strategically to narrow the scope of the matter and have been successful not only in negotiating favorable financial terms but also in limiting the scope of, and sometimes avoiding completely, the imposition of costly imposed compliance oversight embodied in Corporate Integrity Agreements (CIAs). In addition, we have successful experience in avoiding or resolving suspension and debarment proceedings that could arise from an FCA case.
When a settlement or informal resolution is not possible, the government is well aware of our litigation skills, and our excellent track record—both in achieving pre-trial dismissals and in the courtroom.
- Prevailed in a federal jury trial on behalf of a large urban hospital system charged by a qui tam FCA relator with obtaining improper reimbursements by allegedly upcoding bills submitted by affiliated medical school faculty members.
- Obtained the dismissal of a hospital system from a federal FCA lawsuit asserting that our client was part of a scheme to submit false claims for health care services reimbursed by the Medicare, Medicaid, and TRICARE programs. We convinced the court that the qui tam relator failed to allege sufficient details proving that the claimed scheme led to our client submitting false claims.
- Concluded through dismissal on a pre-trial motion a federal FCA whistleblower retaliation claim brought in federal court in Virginia against a major federal defense contractor.
- Obtained summary judgment in a federal FCA case alleging that our hospital client submitted claims to the Centers for Medicare & Medicaid Services (CMS) for hyperbaric oxygen therapy services in violation of CMS's physician supervision requirement. Accepting our argument that when these services are provided on hospital premises, physician presence is presumed, the court found that the relator had failed to show either that a false claim was submitted or that our client caused or contributed to the submission of any false claim.
- Secured summary judgment on behalf of a long-term care pharmacy provider accused of improperly maintaining a pharmaceutical recycling program in violation of the federal FCA.
- Resolved an FCA case pursued against a large integrated care provider alleging improper coding and billing of certain medical services over the course of multiple years. We handled the investigation pursued by the U.S. Department of Justice (DOJ), leading to the government’s decision to decline to intervene in the case, and then defended the subsequent qui tam litigation, which was settled prior to trial.
- Successfully concluded prior to trial a multidefendant litigation brought under federal and multiple state FCAs, alleging fraudulent submissions in connection with the Medicare Risk Adjustment Program, with our client being responsible for just 5 percent of the overall settlement.
- Represented the operator of a large network of skilled nursing facilities in an FCA case brought by the DOJ. Our client faced allegations of submitting false claims to its state Medicaid program, which required physicians to certify a placement evaluation for each patient entering a nursing home. We negotiated a settlement and a CIA with the U.S. Department of Health and Human Services’ Office of Inspector General (OIG).
- Negotiated a fractional settlement of an FCA billing and coding federal and state investigation for a hospitalist company that preserved investor value and company relationships. The case involved the preparation and marshaling of complex legal, regulatory, and accounting input to defeat the expansive arguments of government experts.
- Attained summary judgment for an outpatient clinic in a matter brought under federal and state FCAs, arguing that the services provided were not supervised in accordance with CMS regulations. The court found that the relator had failed to show that any false claim was submitted or that our client caused or contributed to the submission of a false claim. Judgment was also entered in our client’s favor on the relator’s retaliation claims.
- Secured a favorable result for a private equity client in a matter before the OIG in which OIG concluded that a CIA was not necessary with respect to a qui tam relator’s allegations that a health care company in the client’s portfolio violated the federal FCA by engaging in “swapping” arrangements.
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- AHLA Physicians and Hospitals Law Institute: Reporting from the Trenches—A False Claims Act Enforcement 2022 Recap and Predictions for 2023January 31, 2023
- HFMA NJ and Metro Philadelphia Annual Institute: Current Trends in Federal and State Fraud and Abuse InvestigationsOctober 26, 2022
- AHLA Physicians and Hospitals Law Institute 2022: False Claims Act Enforcement from the Frontlines—Investigations and Litigation in 2021 and the Outlook for 2022February 3, 2022