The Department of Justice (DOJ) appears to be taking to heart the policy articulated in what has come to be called the Granston Memo, as it has recently sought dismissal of 11 False Claims Act (FCA) cases in various federal courts across the country, in part on the grounds that the allegations “lack sufficient merit.” The Granston Memo, issued in January of last year, encouraged DOJ attorneys to seek dismissal of qui tam FCA suits “to advance the government’s interests, preserve limited resources, and avoid adverse precedent.” The 11 suits of which DOJ seeks dismissal all share the same legal theory: drugmakers who arrange patient education on proper drug usage and who assist with prior authorizations are essentially providing an illegal kickback to the prescribing physicians in violation of the Anti-Kickback Statute.…
Continue Reading Upswing in DOJ Qui Tam Dismissals

The Department of Justice (DOJ) recently released its annual statistical report on recoveries and new matters under the False Claims Act (FCA). The aggregate reported recovery of $2.8 billion for fiscal year (FY) 2018 is the lowest such total since FY 2009 and is 17% lower than last year’s total and less than half of FY 2014’s all-time high recovery of over $6.1 billion. As the table below shows, however, DOJ’s and private qui tam relators’ levels of enforcement activity on behalf of the Departments of Health and Human Services (HHS) and Defense (DOD) in FY 2018 remained consistent with recent trends.…
Continue Reading Health Care Suits at Center Stage in DOJ’s FCA Recovery Report for FY 2018

The United States District Court of the Eastern District of Pennsylvania recently issued a decision unsealing a False Claims Act case over the objections of the government, the relator and the defendant.[1] In United States ex. Rel. Brasher v. Pentec Health, Inc. No. 13-05745, 2018 WL 5003474 (E.D.P.A. Oct. 16, 2018), a case initially filed five years ago, the government filed a motion to continue the seal – which happened to be its eleventh such motion – arguing that additional time was necessary, in part, to finalize its decision whether to intervene in the action, as well as to pursue settlement options. The Court disagreed.…
Continue Reading District Court Determines that the Eleventh Time is NOT the Charm

When commercially available medications’ standard dosage forms or amounts don’t quite fit a patient’s particular needs, the patient may benefit from customized compounded drugs. Medicare Part D, the prescription drug…
Continue Reading OIG Report on Topical Compounded Drug Prescribing, Marketing and Billing Practices Signals Heightened Administrative and Enforcement Scrutiny

Each year, billions of dollars in damages are paid to the government as a result of False Claims Act (FCA) settlements and judgments. A significant percentage of those damages are…
Continue Reading Seventh Circuit Affirms Dismissal Of An Opportunistic Relator’s False Claims Act Lawsuit That Alleged Violations Of The Trade Agreements Act

And it is even more difficult still if the defendant had – and acted in accordance with – a reasonable interpretation of the vague or ambiguous statute, regulation or contract…
Continue Reading The Supreme Court Discusses When A Statute May Be Unconstitutionally Vague – Will It Be Extended to False Claims Act Cases?

In Part II of our series, we discussed government knowledge. When the government knows of a claim’s falsity, but nevertheless pays the claim, the falsity of the claim is not material to the government’s decision to pay. In other words, the falsity of the claim must not matter to the government and, consequently, there can be no liability under the implied certification theory.

But what about the situation in which the government could have refused payment, but did not have actual knowledge relating to the claim’s alleged falsity? Could the fact that the government retains the option to refuse payment be sufficient to establish materiality? Escobar says no. In so holding, Escobar rejected the Government’s and First Circuit’s pre-Escobar view of materiality (that any statutory, regulatory, or contractual violation is material so long as the defendant knows that the Government would be entitled to refuse payment were it aware of the violation).…
Continue Reading Materiality Part III: It Is Not Enough That The Government Could Refuse Payment—The Question Is Whether The Government Would Refuse Payment