Category: Healthcare
Late last month, the federal government announced a False Claims Act settlement with Summit BHC New Jersey, LLC, d/b/a Seabrook (“Seabrook”), a prominent New Jersey Drug & Alcohol Rehabilitation facility. The joint settlement with the New Jersey Attorney General’s Office, in the amount of $19,751,762.69, covered claims submitted by Seabrook under the Medicaid program and Department of Veterans Affairs benefit programs.
For at least five years, under both Republican and Democrat administrations, there has been a focus on private equity actors in the healthcare space. Since at least 2020, the Department of Justice (DOJ) has focused on private equity in enforcement efforts. In 2023, during the Biden administration, the Senate conducted a bipartisan investigation of the effect that private equity could have on the healthcare industry.
In a significant ruling, the Second Circuit Court of Appeals recently expanded the scope of the Anti-Kickback Statute (AKS). The Court joined other circuit courts across the country in adopting, for the first time, the “at-least-one-purpose rule,” whereby a defendant violates the AKS when at least one purpose,
Senate testimony focusing on the impact of the rising presence of private equity (PE) firms’ control of major healthcare providers touched on the “substantial overlap between the risks associated with private equity ownership of healthcare companies and the activities targeted by the False Claims Act (FCA), a federal law that establishes liability for individuals or companies that defraud governmental programs.” See O’Grady Statement.pdf (senate.gov).
As experienced whistleblower counsel, with more than a decade of representing emergency providers in false claims act (FCA) cases against large hospital systems and national hospital-based staffing groups, the recent investigation by the US Senate into the impact of private equity on emergency care is no surprise.
Takeaways:
- FY 2023 saw the most FCA settlements and judgments ever.
- $2.69B in total recoveries is an uptick from 2022’s down year but still below historical norms.
- New non-qui tam cases surged to the highest in history as the Department of Justice’s pandemic fraud crackdown gains steam.
Medicare Advantage Organizations have come under increased fire as their parent companies continue to acquire more healthcare practices across the country. Experts suggest that this vertical integration has led to inflated Medicare spending, with providers facing new pressure to diagnosis chronic conditions that fetch more money for Medicare Advantage plans.
It’s not always sunny for everyone on the Florida beaches. On January 30, 2023, the United States Attorney’s Office for the Middle District of Florida announced that Al Clint LaRoche of West Palm Beach pleaded guilty to two counts of bank fraud involving more than $1 million from the Paycheck Protection Program (PPP) loan program.
Takeaway: The Eastern District of New York rules that the tax code gives relator’s counsel superpriority to False Claims settlement proceeds.
On Wednesday, November 9th, the Eastern District of New York ruled that fees owed to relator’s counsel must be paid before the relator’s tax lien,
Takeaway: Recent qui tam settlement highlights the DOJ’s continued focus on fraud and abuse in the diagnostics industry and robust enforcement of the Anti-Kickback Statute.
Earlier this month, Snap Diagnostics LLC and two of its executives entered into a nearly $4 million settlement with the United States to settle two qui tam lawsuits.
