False Claims Act

Overview

BakerHostetler has a track record of successfully resolving and defending False Claims Act investigations on behalf of a wide variety of healthcare providers, including academic medical centers, hospitals and health systems, physician groups, ancillary service providers and manufacturers and distributors of pharmaceuticals and medical supplies.

Our Approach

Our national Healthcare Litigation team—comprising nationally recognized healthcare lawyers, former U.S. Department of Justice (DOJ) healthcare fraud prosecutors and white collar defense attorneys—brings to bear a unique combination of skills and insight to methodically address the legal and reputational challenges arising from False Claims Act matters and to secure the best outcome for our provider clients.

We partner with our provider clients across the country to manage and defend False Claims Act investigations from start to finish. We conduct internal investigations and audits, respond to administrative subpoenas and civil investigative demands and negotiate with the DOJ, state attorneys general and other federal and state authorities for favorable resolutions of a False Claims Act investigation. If the government or an individual relator proceeds with a case, our team has the right combination of healthcare law expertise and trial skills to defend clients in the courtroom.

We also understand that the government does not conduct False Claims Act investigations in a vacuum. Our clients rely heavily on our team, which includes several former federal healthcare fraud prosecutors, to evaluate the extent to which a False Claims Act matter may involve parallel criminal allegations. Should a criminal investigation arise, we have the experience to effectively respond to grand jury subpoenas and search warrants, obtain non-prosecution agreements and other favorable pretrial diversions, defend against indictments and, if necessary, try cases to federal and state juries.

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False Claims Act News

Federal Court Cases May Have Some Healthcare Providers Asking For Peace, Not War (6/13/2013)
Last summer, a federal judge in Houston ruled that the Wartime Suspension of Limitations Act (WSLA), found in Title 18, § 3287 of the U.S. Criminal Code, applied to a civil False Claims Act case and suspended the statute of limitations until five years after the conclusion of the conflicts in Iraq and Afghanistan. While the decision was novel at the time, the government’s continued reliance on the WSLA threatens to make it more difficult for False Claims Act defendants, including healthcare providers, to assert a statute of limitations defense.

Physicians Are My Friends; Surely I Can Get Paid to Talk To Them! (6/13/2013)
On April 26, 2013, the DOJ intervened in a whistleblower case alleging Novartis Pharmaceuticals Corporation (Novartis) knowingly and willfully violated the federal False Claims Act by inducing physicians to prescribe Novartis drugs in the form of payments to the physicians for speaking at programs that did not appear to be bona fide. The DOJ's intervention occurred just days after it filed a separate case against Novartis alleging kickbacks in the form of discounts and rebates to at least 20 pharmacies.

Hospital Ordered to Produce Privileged Documents Under the Crime-Fraud Exception (5/30/2013)
A magistrate judge in the U.S. District Court for the Middle District of Florida recently ordered a hospital defendant in a False Claims Act case to turn over two prime documents to the DOJ and the whistleblower that would seem to fall within the traditional confines of the attorney-client privilege. The complaint alleges that Halifax entered into several specialty physician employment agreements that provided for compensation that was not commercially reasonable, exceeded fair market value and/or took into account the volume or value of referrals or other business generated in violation of the federal Stark Law, and in turn, the federal False Claims Act.

Groundhog Day for Tuomey: Jury Finds Hospital Violated Stark Law and False Claims Act (5/16/2013)
On May 8, 2013, a jury in the Columbia Division of the U.S. District Court for the District of South Carolina returned a verdict finding that Tuomey Healthcare Systems, Inc. violated the Stark Law and the False Claims Act by submitting 21,730 claims to Medicare tainted by improper relationships with eighteen physicians.

SSixth Circuit Holds Physician Supervision and Enrollment Issues Are Not Conditions of Payment for Purposes of False Claims Act Liability (4/18/2013)
The Sixth Circuit Court of Appeals recently issued a decision overturning an $11.1 million False Claims Act verdict against MedQuest Associates, Inc. for submitting claims to Medicare in violation of the Medicare conditions of participation. In this decision, the Sixth Circuit expanded on its recent precedent by stating that the False Claims Act should not be used to penalize providers for technical noncompliance with the complicated Medicare regulatory scheme.

False Claims Act: Health System Settles Allegations Related to Payments to Physician Advisors (2/7/2013)
The DOJ recently issued a press release related to a settlement agreement between the U.S. Attorney's Office for the District of New Jersey, the state of New Jersey and a New Jersey hospital system wherein the system agreed to pay a total of $12.6 million to the U.S. and New Jersey to resolve allegations that it violated the federal and New Jersey civil false claims acts by submitting claims for cardiology services that resulted from improper payments to cardiologists.

10 Fraud and Abuse Enforcement Trends You Can't Afford to Ignore in 2013 (2/7/2013)
To paraphrase a famous quote, "Those who do not learn from history are doomed to repeat it," and providers who ignore the significance of the federal government's healthcare fraud enforcement efforts in 2012, do so at their own peril. Using lessons from 2012, we have compiled a list of the ten fraud and abuse enforcement trends that providers simply cannot afford to ignore in 2013.

Select Experience

  • Represented Cardinal Health in U.S. ex rel. Steury v. Cardinal Health, Inc. (5th Circuit), an action claiming that defendants sold the U.S. Department of Veterans Affairs defective medical equipment in violation of the False Claims Act. The court affirmed the dismissal of the action.
  • Represented healthcare providers in responding to and negotiating a final settlement or resolution of False Claims Act investigations by the DOJ and the Office of Inspector General (OIG) regarding allegations of kickbacks and miscoding.
  • Obtained dismissal of pivotal qui tam False Claims Act litigation for an academic medical center involving the application of the False Claims Act to state universities and allegations related to federal grants.
  • Represented hospitals and academic medical centers in federal False Claims Act lawsuit concerning Medicare billing for certain investigational cardiac medical devices.
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Experience

  • Represented Cardinal Health in U.S. ex rel. Steury v. Cardinal Health, Inc. (5th Circuit), an action claiming that defendants sold the U.S. Department of Veterans Affairs defective medical equipment in violation of the False Claims Act. The court affirmed the dismissal of the action.
  • Represented healthcare providers in responding to and negotiating a final settlement or resolution of False Claims Act investigations by the DOJ and the Office of Inspector General (OIG) regarding allegations of kickbacks and miscoding.
  • Obtained dismissal of pivotal qui tam False Claims Act litigation for an academic medical center involving the application of the False Claims Act to state universities and allegations related to federal grants.
  • Represented hospitals and academic medical centers in federal False Claims Act lawsuit concerning Medicare billing for certain investigational cardiac medical devices.
  • Represented hospital in False Claims Act lawsuit involving related party transactions on Medicare cost reports.
  • Represented hospitals before the DOJ and OIG, on issues related to the government’s DRG Window and Outpatient Lab Unbundling False Claims Act recovery projects.
  • Represented hospital in challenging the constitutionality of the whistleblower provisions under the False Claims Act. See U.S. ex rel Riley v. St. Luke’s Episcopal Hospital, 982 F.Supp. 1261 (S.D. Tex. 1997).
  • Represented imaging centers with respect to False Claims Act allegations of kickbacks and miscoding.
  • Represented clients in False Claims Act investigation and internal reviews related to ambulance services and contracting.
  • Represented the chief compliance officer of a major pharmaceutical company in an off-label and False Claims Act investigation.
  • Represented numerous employees of a major pharmaceutical company in a False Claims Act off-label investigation.
  • Represented a large public company in a False Claims Act investigation.
  • Represented a home health agency before the OIG in negotiations, implementation, and ongoing monitoring of corporate integrity agreement following criminal and civil settlements.

Recognition

  • Recognized as one of the top law firms for client service, BakerHostetler was named to the 2019 BTI Client Service 30 for the fifth consecutive year.

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