Other Notable Enforcement Actions

As first reported in the National Law Journal, the US Department of Justice (DOJ), Civil Division, recently issued an important memorandum to its lawyers handling qui tam cases filed under the False Claims Act (FCA) outlining circumstances under which the United States should seek to dismiss a case where it has declined intervention and, therefore, is not participating actively in the continued litigation of the case against the defendant by the qui tam relator.
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On Tuesday, August 11, 2015, in United States ex rel. Barko v. Haliburton et al., the U.S. Court of Appeals for the D.C. Circuit issued an opinion vacating another series of rulings by the United States District Court for the District of Columbia that had required defendant Kellogg Brown & Root, Inc. (KBR) to

Imagine that you’re counsel to a company embroiled in a False Claims Act (FCA) case. Now imagine that your company is about to sign a settlement agreement ending that case after years of protracted discovery and motion battles with a relator or the government. You sigh in relief, right? But if that settlement includes a corporate integrity agreement (CIA), you should think twice about relaxing. A recent decision by the U.S. District Court for the Eastern District of Pennsylvania dampens the upsides of settling, as it turns out that a CIA can potentially expose a company to new FCA cases for alleged CIA violations.

In U.S. ex rel. Boise v. Cephalon, Inc. (July 21, 2015) (1 No. 08-287, 2015 WL 4461793)  the U.S. District Court for the Eastern District of Pennsylvania held that relators stated a claim under the 31 U.S.C. 3721(a)(1)(G)—otherwise known as the “reverse false claims” provision of the False Claims Act— based on alleged violations of a Corporate Integrity Agreement (CIA). In other words, just when Cephalon thought that it had a FCA matter behind it, a relator was able to advance a new action claiming that Cephalon hadn’t complied with the terms of the CIA. 
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Health care fraud enforcement continues to be a priority for the federal government and is poised to expand even more. As a result, health care providers and suppliers should anticipate greater oversight activities from auditors and investigators. Ensuring that your compliance program is up-to-date and up-to-task in proactively identifying problems and making timely decisions about corrective actions and potential disclosures is key to protecting the organization.

BIGGER BUDGETS FOR LAW ENFORCEMENT AND PROGRAM INTEGRITY

In the fiscal 2015 budget, Congress more than doubled the appropriation to the Health Care Fraud and Abuse Control (HCFAC) program to $672 million. This means that the U.S. Centers for Medicare and Medicaid Services (CMS), the U.S. Department of Justice (DOJ), and the Office of Inspector General (OIG) for the U.S. Department of Health and Human Services (HHS) received a large infusion of new funding at a time when many agencies continue to face flat or declining appropriations. CMS program integrity functions received more than $477 million for Medicare oversight, including Parts C and D. OIG and DOJ received more than $67 million and $60 million, respectively, from HCFAC.
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