On May 13, 2019, the Supreme Court of the United States, in
a unanimous decision, delivered an important victory for qui tam whistleblowers. United States ex rel. Hunt v. Cochise Consultancy,
Inc., No. 18-315 (decided May 13, 2019) (referred to as “Hunt”).
PHILADELPHIA, PA – The United States Attorney’s Office for the Eastern District of Pennsylvania announced on Friday, October 26, 2018, that global healthcare giant Abbott Laboratories (“Abbott”) has executed a settlement agreement and will pay $25 million to settle a non-intervened whistleblower lawsuit alleging that it illegally promoted its blockbuster cholesterol drug Tricor for off-label uses and paid kickbacks to prescribing physicians.
On May 21, 2018, Judge Lawrence F. Stengel of the US District Court for the Eastern District of Pennsylvania granted Relator Gohil’s motion to compel calling for the production of hundreds of attorney-client privilege-asserted documents in a False Claims Act dispute.
In the underlying case, United States of America ex rel.
What Happened?
Jeffrey Wertkin, a former Akin Gump Strauss Hauer & Feld LLP partner who previously had worked at the Department of Justice (“DOJ”), received 30 months’ imprisonment for offenses related to his theft and attempted sale of a sealed government whistleblower complaint to a cyber-security company being investigated by the DOJ.
The Supreme Court’s ruling in Escobar creates a new tension between CMS’s historical “pay and chase” framework and the idea that when the government continues to pay claims when it has information regarding potential fraud, the conduct involved is not material to the payment decision. Admittedly, it would be premature to commence administrative proceedings to debar providers at the inception of an investigation.
1. How far will the Supreme Court’s materiality ruling in Escobar extend?
2. Will there be any type of legislative “fix” to the Escobar ruling, and its growing progeny, being decided by scores of federal courts?
3. Will CMS more aggressively scrutinize provider submitted claims to avoid the gutting of multiple fraud investigations based on Escobar?
What Happened?
In affirming the district court’s entry of summary judgment in favor of Accredo Health Group, Inc., and its co-defendants, the U.S. Court of Appeals for the Third Circuit held that a plaintiff alleging a False Claims Act (“FCA”) violation based on an anti-kickback theory must show that (1) a particular patient was exposed to a kickback-tainted referral,
The United States Court of Appeals for the Fourth Circuit has affirmed a District Court’s judgment on a husband and wife’s health care fraud convictions. The Appellate Court found that medical necessity was a “critical prerequisite to payment” and insurers would not have knowingly paid for medically unnecessary urine drug tests.
A recent news article in the New York Times, “The Bounty Hunter of Wall Street,” featured Andrew Left, an “activist” short seller who receives leaked documents and other intelligence about publicly-traded companies from confidential sources. Armed with this information, short sellers leak negative information to the press.
On June 9, 2017, U.S. District Judge Reggie B. Walton (D.C.) denied a clinical laboratory defendant’s motion to dismiss a whistleblower’s False Claims Act case. The Court flatly rejected the lab’s attempt to avoid liability by arguing the doctor, not the lab, determines the medical necessity of a particular test.
If you are aware of any person, corporation or entity that you think may be violating the Federal False Claims Act or a State False Claims Act, contact us today.