Fraud & Abuse

Subscribe to Fraud & Abuse via RSS

On August 26, 2024, the United States Attorney’s Office for the District of Montana filed a False Claims Act (FCA) complaint against a Montana oncologist, alleging that the oncologist’s busy schedule led to excessive claims that violated the FCA. The complaint is unusual in that its chief theory is the amount of time the oncologist spent with patients, relative to what the Justice Department claims is the standard practice of other oncologists. In that respect, the complaint is a warning sign to busy physicians across the country.

This blog post begins by explaining how this Montana oncologist found himself on the Justice Department’s radar—a self-disclosure by the health system that previously employed the oncologist—before discussing what the Justice Department is alleging against the oncologist, as well as what other physicians should learn from this lawsuit.

On June 13, 2024, the Justice Department announced arrests in what it called the nation’s first criminal case against digital health company executives over allegations that those executives caused illegal prescriptions for controlled substances to be ordered by way of telehealth visits.

While the Justice Department has previously brought charges in telehealth cases involving things like orthotic braces or genetic testing, a case against digital health executives involving telehealth-prescribed controlled substances is a first.

For years, law enforcement has bypassed traditional means of securing evidence by informal requests for documents from witnesses of crimes. At some point, that practice bled over into informal requests for healthcare providers’ documents, including documents reflecting protected health information (PHI). Healthcare providers, for the most part, have complied with these informal requests because, as the logic goes, law enforcement couldn’t possibly prosecute me for complying with law enforcement, right? Isn’t that entrapment?

This cooperative, well-intentioned practice by healthcare providers now appears to be drawing scrutiny from Congress. On December 12, 2023, members of Congress sent a letter to Health & Human Services Secretary Xavier Becerra announcing the results of a Congressional inquiry into the practice of pharmacies handing over patient information without legal process. In the face of that new scrutiny, which is sure to extend beyond pharmacies to all healthcare providers, what are healthcare providers to do when asked for PHI through informal means?

In the world of qui tams, it is usually the whistleblower pushing cases to trial. But on February 23, 2023, a federal judge in West Virginia set down for trial a hospital’s case against a whistleblower. Now, in a trial set for late March 2023, a jury is set to determine whether a whistleblower and the general counsel for a competing health system engaged in malicious prosecution and tortious interference by filing a qui tam against a West Virginia hospital.

The Centers for Medicare and Medicaid Services (CMS) recently issued a final rule that includes several anti-fraud measures and significantly enhances the agency’s authority to exclude new and current providers and suppliers that are identified as posing an undue risk of fraud, waste or abuse. The new measures require providers and suppliers to disclose to CMS upon its request and upon application for initial enrollment or revalidation any “affiliations” or parties who have one or more defined “disclosable events.” The rule went into effect November 4, 2019.

The new rule requires all providers to disclose any current or prior affiliations within the past five years that the provider—or any of its owning or managing employees or organizations—has or had with a current or former Medicare provider with a “disclosable event,” which is triggered by any of the following:

  • an uncollected debt to CMS
  • current or previous payments suspension from a federal health care program
  • current or previously exclusion from healthcare programs
  • previous denial, revocation or termination of Medicare, Medicaid or CHIP billing privileges

On January 10, 2018, citing costs associated with record increases in the number of qui tam actions filed under the False Claims Act, the Department of Justice issued a memorandum[1] to certain DOJ attorneys, strongly signaling the Department’s intent to liberalize its use of section 3730(c)(2)(A) to seek dismissal of qui tam actions.

In the recently leaked memo, Michael Granston, Director of the Fraud Section of DOJ’s Commercial Litigation Branch, outlines “a general framework for evaluating when to seek dismissal” by identifying seven factors that have supported DOJ’s previous successful dismissal requests and emphasizes that the Department views its dismissal authority as one subject only to “highly deferential” review by the courts. The memo suggests DOJ will seek dismissal of these actions more often, making use of its authority to seek dismissal as “an important tool to advance the government’s interests, preserve limited resources, and avoid adverse precedent.” As further indication that the Department intends to pursue aggressively any available means of dismissal of these cases, the Director also recommends asserting in the alternative other independently available grounds for dismissal or requesting partial dismissal where appropriate, and the memo reminds attorneys that dismissal may occur at any stage of the proceedings, depending on the circumstances. The Director also stresses the importance of communication between the DOJ, the affected agency, and relators as a means of encouraging voluntary dismissal.

On June 12, 2017, the Department of Health and Human Services Office of Inspector General (OIG) published a report with the objective of determining whether the Centers for Medicare & Medicaid Services (CMS) made proper incentive payments to providers for “meaningful use” of a certified electronic health record (EHR).  The report, entitled “Medicare Paid Hundreds of Millions in Electronic Health Record Incentive Payments That Did not Comply with Federal Requirements,” estimates that CMS improperly paid $729 million in EHR incentive payments to providers who did not actually comply with the requirements of meaningful use.

The Department of Justice (DOJ) recently announced a $155 million settlement agreement with an electronic health records (EHR) vendor, eClinicalWorks (ECW), to settle False Claims Act allegations against the company initially brought by a whistleblower/qui tam relator.  The whistleblower was a software technician for the City of New York City who was implementing ECW software in a prison healthcare system.  The DOJ subsequently intervened and filed suit.  The May 31, 2017 announcement is the first of its kind, holding an EHR vendor accountable for claims made about their certifications.

Provider clients of ECW relied on the assertions made by ECW that their EHR software met the criteria of the Office of the National Coordinator of Health Information Technology (ONC) certification program.  Based on ECW’s software and the assertion of EHR certification, providers believed they had achieved “meaningful use” and received incentive payments under the Medicare and Medicaid EHR Incentive Programs. 

Emerging Issues in Healthcare Law is coming to the Big Easy. The American Bar Association’s 18th annual conference is slated for New Orleans March 8-11.

Husch Blackwell is a platinum sponsor of this event featuring the most emergent topics facing the healthcare bar. As the industry faces changes and continues to grow under healthcare reform and enforcement, this conference allows attendees a perfect opportunity to stay ahead of the developments.