Posts Tagged ‘qui tam’

Partner Jesse Hoyer Speaks at American Bar Association Conference

(L to R) Trial Consultant Suann Ingle, Attorney Jesse Hoyer, Jury Consultant Max Bloom

Partner Jesse Hoyer took part in a panel at the American Bar Association’s 2019 False Claims Act and Qui Tam Trial Institute at Fordham University on June 20th.

The False Claims Act mock trial gave attendees a rare look at a whistleblower trial from start to finish, including how jurors come to their verdict. Attorneys were able to observe jury deliberations, via video, and see how jurors responded to themes, evidence and arguments presented during the mock trial.

In addition to attending the mock trial, Jesse Hoyer sat on a panel titled “Bringing Your Trial to Life: Trial Graphics and Jury Consultants.” Joining her on the panel were trial consultant Suann Ingle of Suann Ingle Associates in New York City and jury consultant Max Bloom from Holocene in San Francisco.

“The mock trial was a fascinating exercise to witness, and it was a special honor to present on the panel,” Hoyer said.


Should you sign an employment release when considering a qui tam?

The Impact of Employment Releases on Qui Tam Cases

Termination of EmploymentWhistleblowers often run into this situation:  they’ve done the right thing to report suspicious conduct up the company’s chain of command only to be rewarded by being told that their services are no longer needed.  While they collect their belongings, the company offers a lump sum of money in exchange for them signing a broad release of all claims that the former employee could one day bring against the company.  The frazzled former employee tempted by the money often signs the agreement.

In the days or weeks that follow, the employee may figure out that the suspicious conduct they reported could have been the basis of a False Claims Act qui tam lawsuit and tries to file a case. One of the first hurdle the employee will need to clear is to get around the broad release of claims that they signed on their way out the door.

As with most things in life, timing is everything.

Releases signed after a case is filed.

The single biggest factor that determines whether a whistleblower case is still viable despite the existence of a broad release is when the release is signed.  If it’s after the case is on file, then generally speaking, the case is found to not be released.  The rationale is that once a qui tam case has been started, the False Claims Act provides that it can only be dismissed with permission of the government and the court — not by a release signed by the whistleblower. 31 U.S.C. 3730(b)(1); see also U.S. ex rel. Ritchie v. Lockheed Martin Corp., 558 F.3d 1161, 1168 (10th Cir.2009)(“[T]he statute only governs the enforceability of settlement agreements made after the filing of a qui tam claim.”). This rationale holds true no matter how broad the release is worded.

Releases signed before a case is filed.

That said, if the whistleblower signs the release on the way out the door and then files a case, he or she could be in trouble.  The False Claims Act statute does not provide specific guidance on pre-filing releases and the United States Supreme Court has yet to weigh in on this issue in the False Claims Act context. The Supreme Court has provided guidance as to how releases impact cases generally, holding that “a promise is unenforceable if the interest in its enforcement is outweighed in the circumstances by a public policy harmed by enforcement of the agreement.” Town of Newton v. Rumery, 480 U.S. 386, 392 (1987) This so-called “Rumery test,” is a balancing test to ensure public policy is not jeopardized by enforcement of any contract or agreement.

Building on the Rumery test, federal courts generally now agree that “pre-filing releases bar subsequent qui tam claims if (1) the release can be fairly interpreted to encompass qui tam claims and (2) public policy does not otherwise outweigh enforcement of the release.”  U.S. ex rel. Nowak v. Medtronic, Inc., 806 F. Supp. 2d 310, 336 (D. Mass. 2011).  The second prong is essentially the Rumery balancing test and has led to what has been called the “government knowledge exception,” which has been explained very concisely:

When the government is unaware of potential FCA claims, the public interest favoring the use of qui tam suits to supplement federal enforcement weighs against enforcing pre-filing releases. But when the government is aware of the claims prior to suit having been filed, public policies supporting the private settlement of suits heavily favor enforcement of a pre-filing release.

U.S. ex rel. Radcliffe v. Perdue Pharma., L.P., 600 F.3d 319, 332 (4th Cir.2010).

What does it all mean?

In practice, this means that whether a pre-filing release will bar a whistleblower case depends on whether the government would have had knowledge of the fraud if the case was not filed. This is a difficult evaluation to make in any case.  As a result, a very careful fact-specific evaluation needs to be done prior to filing a qui tam case, so it is very important that a whistleblower immediately tell his or her lawyer about the existence of any release, or about any pending release that is under consideration.


Supreme Court to Rule on Implied Certification Qui Tam Liability

Whistleblower Case

Whistleblower CaseUpdating on our previous post, on Friday, December 4th, the United States Supreme Court accepted certiorari in the case Universal Health Services v. United States ex rel. Escobar.

As described by the ScotusBlog, the important issues related to qui tam liability presented to the High Court are:

  1. whether the “implied certification” theory of legal falsity under the FCA – applied by the First Circuit below but recently rejected by the Seventh Circuit – is viable; and
  2. whether, if the “implied certification” theory is viable, a government contractor’s reimbursement claim can be legally “false” under that theory if the provider failed to comply with a statute, regulation, or contractual provision that does not state that it is a condition of payment, as held by the First, Fourth, and D.C. Circuits; or whether liability for a legally “false” reimbursement claim requires that the statute, regulation, or contractual provision expressly state that it is a condition of payment, as held by the Second and Sixth Circuits.

In Universal Health Services, the defendant was the owner of a counseling service provider that had prescribed medication for the relators’ daughter’s purported bipolar disorder.  The case was brought on an implied certification theory that the defendant violated state and federal False Claims Acts by submitting claims for reimbursements while its staff members were not properly licensed or supervised as required by law.  Essentially, the relators argued that the defendant’s noncompliance as to certain regulations rendered the reimbursement claims false.

The district court sided with the defendant and dismissed the case for failure to state a claim.  The First Circuit then revived it holding that noncompliance can form the basis of a False Claims Act case and that the relators had stated the qui tam liability theory with particularity.

It is our hope that the Supreme Court agrees with the First Circuit and the majority of other circuits that have considered the issue so that this important theory of qui tam liability can help whistleblowers recover ill-gotten taxpayer money.


DOJ Releases FY2014 Statistics, Record False Claims Act Recoveries

On the heels of the SEC’s recent report of its whistleblower statistics, the Department of Justice released statistics detailing the staggering False Claims Act recoveries in FY2014.  In the fiscal year ending September 30, 2014, the United States obtained a record $5.69 billion in settlements and judgments from civil cases involving false or fraudulent claims against the government.  This brings the five year total since January 2009 to $22.75 billion – more than half the recoveries since the inception of the modern False Claims Act in 1986.

Acting Assistant Attorney General Joyce Branda – in the role she took over when Stuart Delery became the Acting Associate Attorney General in September 2014 – said, “It has been an extraordinary year for civil fraud recoveries … The False Claims Act was enacted to both protect vital taxpayer dollars and deter those who would misuse public funds.  The department will continue to enforce the law aggressively to ensure the integrity of government programs designed to keep us safer, healthier and economically more prosperous.”

The number of False Claims Act qui tam suits initiated by whistleblowers exceeded 700 for the second year in a row.  In FY2014, qui tam cases accounted for nearly $3 billion, with whistleblowers receiving $435 million as relator’s share awards.

The Department of Justice’s report details specific recoveries from the housing and mortgage fraud arena, which totaled $3.1 billion from various banks and financial institutions, and from the health care fraud area, which totaled $2.3 billion.  Notably, FY2014 was the fifth straight year that the Department of Justice has recovered more than $2 billion from healthcare related cases.  The Department of Justice’s report also identifies the $85 million recovery from Halifax Hospital Medical Center, in which James Hoyer acted as local counsel for relator Elin Baklid-Kunz.

Finally, the Department of Justice’s press release specifically recognizes the invaluable efforts of False Claims Act whistleblowers.  The report acknowledges that the growing number of qui tam lawsuits has led to increased recoveries.  Branda commented, “We acknowledge the men and women who have come forward to blow the whistle on those who would commit fraud on our government programs.  In strengthening and protecting the False Claims Act, Congress has given us the law enforcement tools that are so essential to guarding the treasure and deterring others from exploiting and misusing taxpayer dollars.  We are grateful for their continued support.”

For the Department of Justice’s full press release, click here.

To contact James Hoyer about a suspected False Claims Act violation, or if you are being retaliated against as a whistleblower, please contact us here or call us toll-free at 1-800-651-2502.


Amedisys Home Health Agrees to Pay $150 Million to Resolve Whistleblower Case

The Department of Justice announced today that Amedisys Inc. and its affiliates have agreed to pay $150 million to the federal government to resolve allegations that they violated the False Claims Act by submitting false home healthcare billings to the Medicare program. Amedisys, a Louisiana-based for-profit company, is one of the nation’s largest providers of home health services and operates in 37 states, the District of Columbia and Puerto Rico.

“It is critical that scarce Medicare home health dollars flow only to those who provide qualified services,” said Stuart F. Delery, Assistant Attorney General for the Civil Division. “This settlement demonstrates the department’s commitment to ensuring that home health providers, like other providers, comply with the rules and don’t misuse taxpayer dollars.”

The settlement announced today resolves allegations that, between 2008 and 2010, certain Amedisys offices improperly billed Medicare for ineligible patients and services. Amedisys allegedly billed Medicare for nursing and therapy services that were medically unnecessary or provided to patients who were not homebound, and otherwise misrepresented patients’ conditions to increase its Medicare payments. These billing violations were the alleged result of management pressure on nurses and therapists to provide care based on the financial benefits to Amedisys, rather than the needs of patients.

Additionally, this settlement resolves certain allegations that Amedisys maintained improper financial relationships with referring physicians. The Anti-Kickback Statute and the Stark Statute restrict the financial relationships that home healthcare providers may have with doctors who refer patients to them. The United States alleged that Amedisys’ financial relationship with a private oncology practice in Georgia – whereby Amedisys employees provided patient care coordination services to the oncology practice at below-market prices – violated statutory requirements.

“Combating Medicare fraud and overbilling is a priority for my office, other components of the Department of Justice, and United States Attorneys’ Offices across the country,” said Zane David Memeger, United States Attorney for the Eastern District of Pennsylvania. “We have recovered billions of dollars in federal health care funds from schemes such as the one alleged in this case. Those are health care dollars that should be spent on legitimate medical needs.”

“Home health services are a large and growing part of our federal health care system,” said Sally Quillian Yates, United States Attorney for the Northern District of Georgia. “Health care dollars must be reserved to pay for services needed by patients, not to enrich providers who are bilking the system.”

“Amedisys made false Medicare claims, depriving the American taxpayer of millions of dollars and unlawfully enriching Amedisys,” said Joyce White Vance, U.S. Attorney for the Northern District of Alabama. “The vigorous enforcement work by assistant U.S. attorneys in my office, along with their colleagues in North Georgia, Eastern Pennsylvania, Eastern Kentucky and the Civil Division of the Justice Department, has secured the return of $150 million to the taxpayers and stands as a warning to future wrongdoers that we will aggressively pursue them.”

“This settlement represents a significant recovery of public funds and an important victory for the taxpayers,” said Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky. “Fighting health care fraud and recovering tax payer dollars that fund our vital health care programs is one of the highest priorities for our district.”

Amedisys also agreed to be bound by the terms of a Corporate Integrity Agreement with the Department of Health and Human Services – Office of Inspector General that requires the companies to implement compliance measures designed to avoid or promptly detect conduct similar to that which gave rise to the settlement.

“Improper financial relationships and false billing, as alleged in this case, can shortchange taxpayers and patients,” said Daniel R. Levinson, Inspector General for the U.S. Department of Health and Human Services. “Our compliance agreement with Amedisys contains strong monitoring and reporting provisions to help ensure that people in Federal health programs will be protected.”

This settlement resolves seven lawsuits pending against Amedisys in federal court – six in the Eastern District of Pennsylvania and one in the Northern District of Georgia – that were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery. As part of today’s settlement, the whistleblowers – primarily former Amedisys employees – will collectively split over $26 million.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $19.2 billion through False Claims Act cases, with more than $13.6 billion of that amount recovered in cases involving fraud against federal health care