False Claims Act

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At the end of December, the Second Circuit joined several other circuit courts in holding that a plaintiff adequately pleads an Anti-Kickback Statute (“AKS”) violation when she states with the requisite particularity that at least one purpose of the alleged scheme was to induce fraudulent conduct, the “at-least-one-purpose” rule.

In United States ex rel. Camburn v. Novartis Pharmaceuticals Corp., Relator Steven Camburn alleged that Novartis violated the AKS, and the False Claims Act (“FCA”), in marketing its drug Gilenya, which is prescribed for multiple sclerosis (“MS”).  Since approving Gilenya in 2010, the FDA has imposed a first-dose observation requirement for new patients, who must be monitored by a doctor while attached to an electrocardiogram machine for six hours.Continue Reading Second Circuit Adopts At-Least-One-Purpose Rule For Anti-Kickback Statute Violations

The SDNY U.S. Attorney’s Office has targeted several labs and their principals for False Claims Act violations arising out of reimbursements for COVID-19 testing services.  In a complaint filed on June 13, the government sued LabQ Clinical Diagnostics, Dart Medical Laboratory, Community Mobile Testing, and their CEO, Moshe Landau.

In response to the COVID pandemic, Congress mandated that private health insurers cover COVID-19 testing and required government health care programs to also cover such testing.  For uninsured persons, Congress appropriated funds for a federal program to reimburse health care providers furnishing COVID-19 testing to uninsured persons (the “Uninsured Program”), administered by an agency within the Department of Health and Human Services.  Before seeking reimbursement, however, COVID-19 testing providers were required to confirm that the patients were uninsured and no one else would pay for the testing. Continue Reading SDNY Sues Labs For Fraudulent COVID-19 Testing Under False Claims Act

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Recently, in United States ex rel. Hart v. McKesson Corp., the Second Circuit clarified the standard for acting “willfully” under the federal anti-kickback statute (AKS).

False Claims Act relator Adam Hart alleged that the defendant violated the AKS by providing business management tools to its customers, without charge, to induce those customers to purchase drugs from them.  The tools helped providers to maximize profits and mitigate the risk that reimbursement rates would fall below the cost of the drugs to them.  One tool, the Margin Analyzer, compared profit margins for drugs considered to be interchangeable, and the second, the Regimen Profiler, provided margin information for an entire course of treatment as opposed to specific drugs.  The unlawful kickback, according to relator, was that the defendant did not offer these tools on a stand-alone basis, but only offered them to providers who agreed to use the defendant as their primary wholesaler of branded and generic drugs.  The defendant allegedly provided the tools as a kickback to induce drug sales. 

The Second Circuit first addressed the proper understanding of “willfulness” under the AKS.  The Court held that, in order to violate the federal AKS, a defendant must act knowing that the conduct is in some way unlawful but does not have to know specifically that the conduct violates the AKS.  The Court stated that this interpretation accords with the general goal of criminal law to punish only those who act with a “vicious will.”  Notably, in 2010, Congress amended the AKS to provide that a violation does not require actual knowledge of the AKS or a specific intent to violate the AKS.  Also, particularly with respect to the analysis of applications of AKS safe harbors to conduct, this interpretation also avoids unfairly sweeping innocent conduct under the reach of the criminal statute.Continue Reading Second Circuit Defines “Willfulness” Standard Under Anti-Kickback Statute

EDNY Judge Brian Cogan recently addressed the False Claims Act public disclosure bar and original source rule in a decision based on a qui tam Relator’s claims that defendants marketed a test to measure the levels of a certain hormone knowing that the test was flawed. In United States ex rel. Patriarca v. Siemens Healthcare Diagnostics, Inc., Relator alleged…
Continue Reading EDNY Decision Highlights False Claims Act Public Disclosure Bar, Original Source Rule

False Claims Act whistleblowers expose themselves to significant risks by coming forward and asserting claims of fraud against the government. Often, the whistleblowers, called relators under the False Claims Act, would prefer to maintain their anonymity for personal or professional reasons, but their options to do so are limited.

A False Claims Act case is initially filed under seal, and…
Continue Reading Medicaid Fraud Whistleblower Loses Bid To Keep His Name Out Of The Public Eye

The Second Circuit recently agreed to accept an interlocutory appeal to decide the question whether a violation of the False Claims Act’s “first-to-file” rule compels dismissal of the complaint or whether it can be cured by the filing of an amended pleading.

In United States ex rel. Wood v. Allergan, Inc., Relator John Wood brought FCA claims against Allergan,…
Continue Reading Second Circuit Accepts Appeal of False Claims Act First-To-File Issues

Last week, the Second Circuit held that a False Claims Act relator does not have to plead details of specific alleged false billings or invoices to the government, as long as he can allege facts leading to a strong inference that specific claims were submitted and that information about them are peculiarly within the defendant’s knowledge.

In United States ex …
Continue Reading Second Circuit Sets False Claims Act Pleading Standard For Claim Information

imagesNG7ROJJTCMS has published a Proposed Rule to clarify how physicians are to bill for services furnished “incident to” the professional services of a physician.

When a medical practice bills Medicare “incident to” for NPP services (i.e. “non-physician practitioners” such as nurses or physician assistants), the bill is rendered by the physician using the physician’s NPI number. Incident to services billed…
Continue Reading ‘Incident To’ Billing: Billing Physician as the Supervising Physician and Ancillary Personnel Requirements

Columbia University agreed to pay $9 million this week in settlement of a SDNY False Claims Act case alleging that it had submitted false claims in connection with federal grants funding AIDS and HIV related work.  Columbia was the grant administrator on behalf of ICAP, an entity that received millions of dollars in federal grants for support and services for…
Continue Reading Columbia Pays $9 Million In False Claims Act Case For Mischarging Federal Grant Money

When does the 60-day clock start for an identified overpayment of federal funds to become a reverse false claim under amendments to the False Claims Act?  A closely watched SDNY qui tam  case may provide an answer. 

In June, the United States and New York intervened in United States v. Continuum Health Partners, Inc., alleging that defendants had knowingly…
Continue Reading Dismissal Motions Filed In SDNY Computer Glitch Reverse False Claim Act Case