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Healthcare Enforcement Quarterly Roundup – Q2 2019

In this second installment of the Healthcare Enforcement Quarterly Roundup for 2019, we cover several topics that have persisted over the past few years and identify new issues that will shape the scope of enforcement efforts for the remainder of this year and beyond. In this Quarterly Roundup, we discuss DOJ’s guidance on compliance programs and cooperation credit, new US Department of Health and Human Services (HHS) rules and enforcement activity on provider religious/conscience opt-out rights, enforcement activity against home health agencies and telemedicine providers, continued federal action to combat the opioid crisis, and resolution of ambiguity in the False Claims Act (FCA) statute of limitations. Click here to read the full issue of the Healthcare Enforcement Quarterly Roundup. Click here to download a PDF of the issue.  

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DOJ Preserves Its Options in Cooperation Credit Guidance

Last month, the Civil Division of the Department of Justice (DOJ) announced the release of formal guidance to DOJ civil attorneys on how to award “cooperation credit” to defendants who cooperate with the Department during a False Claims Act (FCA) investigation. The formal policy, added to the Justice Manual Section 4-4.112, identifies the type of cooperation eligible for credit. As announced by Assistance Attorney General Jody Hunt, DOJ believes the guidance reflects “important steps to incentivize companies to voluntarily disclose misconduct and cooperate with our investigations … False Claims Act defendants may merit a more favorable resolution by providing meaningful assistance to the Department of Justice—from voluntary disclosure, which is the most valuable form of cooperation, to various other efforts, including the sharing of information gleaned from an internal investigation and taking remedial steps through new or improved compliance programs.” Under...

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DOJ Guidance on Evaluation of Corporate Compliance Programs: Key Takeaways

Boards and management should make use of recent expanded guidance from the US Department of Justice to ensure that their compliance programs are considered “effective” if and when an investigation arises. Companies should affirmatively answer three fundamental questions in evaluating a compliance program: Is the compliance program well designed? Is the program being implemented effectively and in good faith? Does the compliance program work in practice? Click here to access the full article. 

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First of Its Kind: Drug Wholesaler Accepts DPA and Two Executives Face Criminal Charges in SDNY For Illegal Distribution of Opioids

On April 23, 2019, the US Department of Justice (DOJ) announced it has entered into a deferred prosecution agreement with Rochester Drug Co-Operative, Inc. (RDC), one of the 10 largest wholesale distributors of pharmaceutical products in the US, and filed felony criminal charges against two of RDC’s former senior executives for unlawful distribution of controlled substances (oxycodone and fentanyl) and conspiring to defraud the US Drug Enforcement Agency (DEA). During the relevant time period (2012-2016), RDC’s sales of oxycodone increased by approximately 800 percent (from 4.7 million to 42.2 million tablets) and fentanyl increased by approximately 2,000 percent (from 63,000 to over 1.3 million dosages). The two charged executives are RDC’s former chief executive officer, Laurence F. Doud III, and the company’s former chief compliance officer, William Pietruszewski. Geoffrey S. Berman, the US Attorney for the Southern District of New York, noted in a press...

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Health Care Enforcement Quarterly Roundup | Q4 2018

This latest installment of the Health Care Enforcement Quarterly Roundup reflects on trends that persisted in 2018 and those emerging trends that will carry us into 2019 and beyond. Leading off with the US Department of Justice’s (DOJ) December announcement of its fiscal year 2018 False Claims Act (FCA) recoveries, it remains clear that the health care industry is a primary target of FCA enforcement activity. We also revisit the current state of implementation of DOJ’s Granston Memorandum, substantive revisions to the Yates Memorandum, critical interpretations of the landmark Escobar case (including those expected in the coming year), and continued enforcement activity in the pain management industry. Click here to read the full issue of the Health Care Enforcement Quarterly Roundup.  Click here to download a PDF of the issue. 

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Health Care Enforcement Quarterly Roundup | Q3 | September 2018

In the latest installment of Health Care Enforcement Quarterly Roundup, we examine key enforcement trends in the health care industry that we have observed over the past few months. In this issue, we report on: Practical applications of recent guidance from the US Department of Justice (DOJ) A recent blow to DOJ’s effort to use the federal False Claims Act (FCA) to attack Medicare Advantage reimbursement Continued enforcement efforts at the state and federal level to combat the opioid crisis Potential changes to the Stark Law and Anti-Kickback Statute Continued reporting on how the lower courts have interpreted the landmark Escobar case Click here to read the full issue of the Health Care Enforcement Quarterly Roundup. Join us on for a webinar discussion on Tuesday, October 23. will take a deep dive into the trends and issues covered in this installment of the Health Care Enforcement Quarterly Roundup. Click here to register.

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Sixth Circuit Declines to Revisit Materiality Ruling

This week, the Sixth Circuit declined the en banc petition of Brookdale Senior Living Communities to revisit a three-judge panel’s two-to-one decision to permit the Relator’s third amended complaint to move forward. We previously analyzed this decision here. The court’s one-page order did not explain the reasoning for declining the petition, although it noted that the dissenting judge voted in favor of re-hearing. Fortunately, most courts have taken to heart the Supreme Court’s direction that materiality is a “demanding” and “rigorous” test in which “minor or insubstantial” non-compliance would not qualify as material. However, the Sixth Circuit’s decision that noncompliance with a physician signature timing requirement sufficiently alleged materiality under Escobar arguably is inconsistent with Escobar. The better analysis of the Relator’s complaint would conclude that the Relator pled insufficient facts, under the Rule 9(b) particularity standard, to...

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OIG Seeks Comments on Anti-Kickback Statute and Beneficiary Inducements as Part of its Regulatory Sprint to Coordinated Care

On August 24, 2018, the Office of Inspector General (OIG), Department of Health and Human Services (HHS) published a request for information, seeking input from the public on potential new safe harbors to the Anti-Kickback Statute and exceptions to the beneficiary inducement prohibition in the Civil Monetary Penalty (CMP) Law to remove impediments to care coordination and value-based care. The broad scope of the laws involved and the wide-ranging nature of OIG’s request underscore the potential significance of anticipated regulatory reforms for virtually every healthcare stakeholder. The request for information follows a similar request by the Centers for Medicare and Medicaid Services (CMS) published on June 25, 2018, regarding the physician self-referral law, commonly known as the Stark Law. Both of these requests are part of HHS’s “Regulatory Sprint to Coordinated Care,” which is being spearheaded by the Deputy Secretary as an effort to address regulatory...

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Health Care Enforcement Quarterly Roundup | Q2 | July 2018

How will key trends and developments in health care policy and enforcement impact future litigants? In the latest Health Care Enforcement Quarterly Roundup, we address this question in the context of: Continued interpretations of the landmark Escobar case The latest guidance from US Department of Justice (DOJ) leadership regarding enforcement priorities The uptick in state and federal efforts to combat the opioid crisis Recent court decisions regarding the use of statistical sampling in False Claims Act (FCA) cases A recent increase in regulatory scrutiny of co-location and shared services/equipment arrangements Materials from our corresponding Q2 webinar can be accessed below. Click here to read the full issue of the Health Care Enforcement Quarterly Roundup. Click here to view the archived webinar.

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Timing is Everything: The Sixth Circuit’s Application of the Materiality Test

The materiality test articulated in Escobar has become one of the most litigated issues in False Claims Act (FCA) practice. Most courts have taken to heart the Supreme Court’s direction that materiality is a “demanding” and “rigorous” test in which “minor or insubstantial” non-compliance would not qualify as material. However, a recent Sixth Circuit two-to-one decision found that noncompliance with a physician signature timing requirement sufficiently alleged materiality under Escobar, reversing the district court’s dismissal of the case. United States ex rel. Prather v. Brookdale Senior Living Communities, Inc., 892 F.3d 822 (6th Cir. 2018). This opinion arguably is inconsistent with Escobar. The better analysis of Relator’s complaint would conclude that the Relator pled insufficient facts, under the Rule 9(b) particularity standard, to suggest that the untimely physician signature somehow resulted in the government paying for home health services for which...

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