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New DOJ Task Force to Take on Opioid Crisis Using the FCA and Other Enforcement Tools

Earlier this week, the US Department of Justice (DOJ) launched a new front in its effort to combat the opioid crisis and explicitly stated that it will deploy the False Claims Act (FCA) as part of its offensive. In a press release and parallel speech delivered by Attorney General Jeff Sessions on February 28, 2018, DOJ announced the creation of the Prescription Interdiction & Litigation (PIL) Task Force. According to DOJ, the PIL Task Force will combat the opioid crisis at every level of the distribution system, from manufacturers to distributors (including pharmacies, pain management clinics, drug testing facilities and individual physicians). DOJ will use all available civil and criminal remedies to hold manufacturers accountable, building on its existing coordination with the US Food and Drug Administration (FDA) to ensure proper labeling and marketing.  Likewise, DOJ will use civil and criminal actions to ensure that distributors and pharmacies are...

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Guidance on Guidance: DOJ Limits Use of Agency Guidance Documents in Civil Enforcement Cases

In a two-page memorandum, the US Department of Justice (DOJ) announced a broad policy statement prohibiting the use of agency guidance documents as the basis for proving legal violations in civil enforcement actions, including actions brought under the False Claims Act (FCA). The extent to which these policy changes ultimately create relief for health care defendants in FCA actions is unclear at this time. That said, the memo provides defendants with a valuable tool in defending FCA actions, either brought by DOJ or relator’s counsel, that attempt to use alleged noncompliance with agency sub-regulatory guidance as support for an FCA theory. Continue reading

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The Opioid Crisis: An Emerging False Claims Act Risk Trend

The government’s focus on the US opioid crisis has been consistently expanding over the past year beyond manufacturers to reach prescribers and health care providers who submit claims to federal health care programs for opioid prescriptions. These efforts increasingly include investigations under the False Claims Act and administrative actions, in addition to the more traditional criminal approach to these issues. With the Trump administration's public health emergency orders, it is expected for the government's enforcement activities, including those instigated by relators and their counsel, to grow in this area. Continue Reading.

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DOJ Issues Memorandum Outlining Factors for Evaluating Dismissal of Qui Tam FCA Cases in Which the Government Has Declined to Intervene

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. Authored by Michael Granston, director, Fraud Section, Commercial Litigation Branch of the Civil Division of the DOJ, the eight-page memorandum follows comments made by Mr. Granston last year suggesting that—in cases where the DOJ has determined that allegations in a qui tam complaint lack merit—the United States would more aggressively exercise its statutory authority to dismiss FCA complaints pursuant to 31 U.S.C. § 3730(c)(2)(A). The DOJ later indicated that Mr. Granston’s public discussion of its...

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To Be or Not to Be Identified Is the 60-Day Question

Every day across the country, health-care organizations are asking themselves: Have we identified an overpayment? On Aug. 3, a federal judge in the Southern District of New York took the first judicial stab at answering this rather existential question in United States ex rel. Kane v. HealthFirst Inc. (see related article in the Leading the News section). Read the full article from Bloomberg BNA's Health Care Fraud Report™.

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D.C. Circuit Declines to Eviscerate Attorney-Client Privilege in Internal Investigations

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 produce the privileged files underlying its internal investigation into allegations that the company defrauded the U.S. government. The District Court had concluded that KBR impliedly waived the privilege by putting the contents of its corporate investigation at issue in the litigation when it produced an in-house lawyer as a deposition witness on the topic of KBR’s investigation and referenced that testimony in connection with its motion for summary judgment. The District Court had also ruled that the attorney-client privilege did not extend to summary reports prepared by KBR’s non-lawyer investigators. In vacating the District Court’s ruling, the...

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Pay Now or Pay More Later: Recent Cases Point to an Increased Risk of Reverse False Claims Act Claims

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...

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Health Care Executive Liability Exposure Post-Sacred Heart

Let’s get something straight, up front. The sky is not falling. No new enforcement wave is coming. Health care executives need not start contacting personal defense counsel. But in the wake of the March 19 verdict (Jury Finds Chicago Hospital Execs Guilty In Kickbacks Case) in the Sacred Heart antikickback case, it’s reasonable for general counsel to expect a question or two about personal liability from senior leadership team members. And that’s a great teaching moment for the general counsel. Indeed, Sacred Heart involved highly unique facts, and individual executive prosecutions under the federal Anti-Kickback Statute [42 U.S.C. 1320a-7b(b)] remain extremely rare. But the federal government has a wide variety of enforcement tools from which to pursue health care executives that it regularly considers using. So Sacred Heart provides an opportunity for general counsel to brief executives on the scope of the government’s power and discretion related to...

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Fraud Enforcement Trends for 2015: Over the Horizon

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...

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