Chelsea M. Rutherford Chelsea M. Rutherford

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Chelsea M. Rutherford focuses her practice on corporate, transactional and regulatory matters affecting a wide range of clients in the health care and life sciences industries. Read Chelsea M. Rutherford's full bio.

Stark Law Proposed Change Affects Group Practice Special Rules for Productivity Bonuses, Profit Shares


By , , , , , and on Oct 22, 2019
Posted In Stark

On October 9, 2019, the US Department of Health and Human Services Centers for Medicare and Medicaid Services (CMS) published proposed changes to the physician self-referral law (Stark Law). Physician practices are subject to the Stark Law, and the proposed rule includes an important clarification affecting certain group practices’ compensation models. CMS proposes to revise...

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District Court Decision Joins Ranks of FCA Cases Confirming Escobar’s Materiality Standard


By on Jun 26, 2018
Posted In Materiality

On June 8, 2018, the US District Court for the Eastern District of Virginia granted in part a motion for summary judgement filed by a government contractor in an implied false certification case under the False Claims Act (FCA), holding that the relator failed to satisfy the Supreme Court’s materiality standard put forth in the...

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Par Pharmaceutical Beats FCA Prescription-Switch Allegations


By on Sep 25, 2017
Posted In Materiality, Pharmaceuticals

In the fourth of a related set of qui tam False Claims Act (FCA) suits, the United States District Court for the Northern District of Illinois granted summary judgment in favor of generics manufacturer Par Pharmaceutical Companies (Par). The court’s August 17, 2017, opinion in U.S. ex rel. Lisitza et al v. Par Pharmaceutical Co,...

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Relators Denied Permanent Seal on FCA Case Record after Voluntary Dismissal


By on Apr 21, 2017
Posted In Anti-Kickback Statute / Stark Law, Retaliation

On March 20, 2017, the US District Court for the Southern District of Mississippi denied a motion to permanently seal the record of previously dismissed False Claims Act (FCA) claims.  The three relators, who initially brought the claims in US v. Apothetech Rx Specialty Pharmacy Corp., claimed they would face potential reputational damage and retaliatory...

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District Court Lets Insurer off the Hook from Defending FCA Suit


By on Dec 8, 2016
Posted In Uncategorized

On November 15, the US District Court for the Northern District of California granted Scottsdale Insurance Company’s motion for judgment on the pleadings in Hotchalk, Inc. v. Scottsdale Insurance Co. (Case No. 4:16-CV-03883), ruling that Scottsdale is not required to defend or indemnify Hotchalk from a 2014 False Claims Act (FCA) suit (and subsequent settlement)....

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First 60 Day Rule Overpayment Case Ends with Almost $3 Million Settlement


By on Sep 7, 2016
Posted In Reverse False Claims

As part of a settlement agreement reached on August 23, three hospitals and their former parent system agreed to pay $2.95 million to resolve state and federal False Claims Act (FCA) allegations that they failed to investigate and repay overpayments from the New York Medicaid program in a timely manner under the so-called “60 Day...

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Congressional Hearing Explores FCA Oversight and Reform


By on May 3, 2016
Posted In Damages and Penalties

On April 28, 2016, the House Judiciary Committee’s Subcommittee on the Constitution and Civil Justice (Subcommittee) held a hearing on the False Claims Act (FCA). According to a statement of the Subcommittee chair, the hearing was called to examine FCA oversight and “what more can be done to prevent, detect, and eliminate false claims costing...

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OIG Continues to Refine Guidance on Patient Assistance Programs


By on Feb 23, 2016
Posted In Anti-Kickback Statute / Stark Law, Pharmaceuticals

The past three months have seen a flurry of advisory opinion activity from the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG). The majority of this activity focuses on patient assistance programs (PAPs) as donors and organizations continue to have questions about OIG’s most recent PAP guidance. While none of...

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“Operation Spinal Cap” Sees Former Hospital Executive, Physicians Charged for Their Roles in Kickback Scheme


By on Dec 3, 2015
Posted In Damages and Penalties

Last week, the Department of Justice (DOJ) announced charges against a former hospital CFO, two orthopedic surgeons, a chiropractor, and a health care marketer for their alleged roles in a series of fraudulent referral and billing schemes.  According to the DOJ, these referral schemes paid illegal kickbacks to physicians for spinal surgery referrals and caused...

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Recent Advisory Opinion Shows OIG’s Growing Acceptance of Financial Integration Among Related Entities


By on Sep 21, 2015
Posted In Anti-Kickback Statute / Stark Law

On July 20, the Office of Inspector General of the Department of Health and Human Services (OIG) posted a new Advisory Opinion (the Opinion) addressing a health system’s restructured arrangement to lease employees, and provide other operational and management services, to a related psychiatric hospital (the Arrangement). The Opinion is a notable departure from other...

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