Duane Morris Health Law

January 9, 2015 by Amy E. McCracken

Antipsychotic Drug Use Can Lower Nursing Home’s Five-Star Rating

The Centers for Medicare & Medicaid Services (CMS) is continuing its efforts to reduce the national prevalence of antipsychotic drug use in long-stay nursing home residents. Its initial goal of a 15.1% reduction in antipsychotic drug use was met, so CMS now seeks to reduce antipsychotic drugs by 25% by the end of 2015 and 30% by the end of 2016. The national average of antipsychotic drug prevalence was 19.8% in early 2014.

CMS has been publishing each facility’s antipsychotic drug use on the Nursing Home Compare web site. Now in 2015, as further incentive to nursing homes, CMS will use antipsychotic drug use as a factor in calculating each facility’s Five-Star Rating. A low Five-Star Rating can have a direct impact on a facility’s census and profitability.

Nursing homes need to develop strategies to reduce antipsychotic drug use. They cannot depend upon physicians to change the drug orders; they need to partner with physicians to develop creative approaches for treatment. Each resident should be thoroughly evaluated to determine the root cause of behaviors that trigger the use of antipsychotic drugs. Frequently, the undesirable behaviors are caused by an unmet need. Once the need or cause is determined, individualized, person-centered approaches can be developed to prevent or respond to the behaviors. This is the beginning of a new year, now is the time to start some new interventions to reduce antipsychotic drug use and enhance your Five-Star Rating.

January 9, 2015January 9, 2015 by Seth A. Goldberg

Fees and Costs Awarded to False Claims Act Defendant

A recent decision in the U.S. District Court for the Southern District of New York provides fair warning to qui tam relators who assert erroneous claims under the False Claims Act (“FCA”) that they could be hit with legal fees and expenses pursuant to 31 U.S.C. § 3730, which permits such an award “upon a finding that the . . . claims were objectively frivolous, irrespective of plaintiff’s subjective intent.” Mikes v. Straus, 274 F.3d 687, 705 (2d Cir. 2001).

On December 1, 2014, in U.S., et al., ex rel. Fox Rx, Inc., 1:12-cv-00275, defendant Managed Health Care Associates Long Term Care Network, Inc. (“MHA”), was awarded attorneys’ fees and expenses because the relator’s, Fox Rx, Inc.’ (“Fox”), claim that MHA, which negotiates reimbursement rates, among other things, on behalf of a network of pharmacies, allegedly (i) failed to substitute generic drugs for named brand drugs, and (ii) dispensed drugs beyond their termination date, was objectively frivolous given that the plain language of the very agreement Fox attached to its second amended complaint demonstrated that MHA did not itself dispense drugs, and exercised no control or supervision of its network pharmacies’ dispensing. Continue reading “Fees and Costs Awarded to False Claims Act Defendant”

January 5, 2015 by Seth A. Goldberg

Another Win for a False Claims Act Defendant

On January 2, 2015, the U.S. District Court for the Central District of California threw out claims that Walgreens pharmacy violated the federal and California false claims acts on the basis that the plaintiff failed to meet the applicable stringent pleading requirements.

In Irwin v. Walgreens, 2:13-cv-08473, a whistleblower/Relator contended that Walgreens cheated Medicare and Medi-Cal out of millions of dollars by establishing schemes to bill those government healthcare programs for prescriptions that were never picked up by patients, rather than restocking the drugs and reversing any associated charges to the government payers. Among other things, the complaint asserted that, as demonstrated by the fact that they were not picked up by the patients, the prescriptions were not medically necessary, and therefore should not have been billed. The complaint sought money damages, including a penalty of up to $11,000 for each violation and treble damages. In September 2014, the government declined to intervene in the qui tam action. Continue reading “Another Win for a False Claims Act Defendant”

December 22, 2014 by Philip H. Lebowitz

False Claims Act Defendants May Have Possible Counterclaims Against Whistleblowers

Although whistleblowers benefit from strong public policies protecting the means by which they assert and support their False Claims Act (FCA) allegations, a recent decision highlights a possible counterclaim theory that empowers defendants to assert claims against the whistleblower. In U.S. ex rel. Notorfransesco v. Surgical Monitoring Association, Inc. et al., (E.D. Pa.), the whistleblower was a former employee of the defendant, and the defendant asserted a counterclaim based on the former employee’s taking and disseminating confidential information from the former employer, including using that information in the qui tam complaint. The counterclaim asserted breach of contract, implied contract and promissory estoppel theories.

The district court denied the whistleblower’s motion to dismiss the counterclaim, holding that the counterclaim raised claims that were independent of the FCA allegations and therefore were not against public policy. The court also held that the defendant had plausibly asserted that it could be entitled to injunctive relief and damages. Continue reading “False Claims Act Defendants May Have Possible Counterclaims Against Whistleblowers”

December 22, 2014December 22, 2014 by Seth A. Goldberg

False Claims and Anti-Kickback Defendants Should Insist on Discovery from the Whistleblower/Relator

One arrow in the quiver for healthcare providers sued for violations of false claims and anti-kickback statutes is pressing for discovery from the whistleblower/relator, including a deposition of the relator. The failure of the whistleblower to comply with the discovery obligations could result in meaningful sanctions, including dismissal.

In Guthrie v. A Plus Home Health Care, Inc. et al, 0:12-cv-60629-WPD (S.D. FL), the relator, William Guthrie, sued a home health care provider, its seven doctors, and their spouses, alleging that the doctors and their spouses implemented a fraudulent scheme of compensation and referral payments resulting in violations of the False Claims Act, the Stark Act, and the federal Anti-Kickback Statute. Continue reading “False Claims and Anti-Kickback Defendants Should Insist on Discovery from the Whistleblower/Relator”

December 12, 2014 by Philip H. Lebowitz

Clinical trial sponsors can be liable for inadequate consent forms

Physicians acting as investigators for a clinical trial testing a new therapy are required to present to each patient or study subject a consent form, indicating that the patient understands the risks, benefits and alternatives of participating in the trial and voluntarily elects to do so. Federal law imposes several specific items to be included in the consent form. Where all pertinent risks, benefits and alternatives have been disclosed, and the patient signs the form, the patient is said to have given “informed consent.”

A patient injured in a clinical trial studying a new therapy for Parkinson’s Disease sued the manufacturer of the equipment used in the procedure. In addition to a claim of negligent design and manufacture of the equipment itself, the patient asserted that the manufacturer, as the sponsor of the clinical trial, was negligent in drafting and approving the informed consent documents that the patient signed to participate in the clinical trial. Can a manufacturer be liable for an improperly drafted consent form? Continue reading “Clinical trial sponsors can be liable for inadequate consent forms”

December 10, 2014June 14, 2017 by Philip H. Lebowitz

Medical Marijuana article

My partner Seth Goldberg and I just published an article in the Legal Intelligencer describing the ethical dilemmas faced by lawyers who have clients who may embark on business ventures that involve medical marijuana in Pennsylvania and other jurisdictions where the law and the norms are still being formulated. You can read the full text here.

December 5, 2014 by Philip H. Lebowitz

7th Circuit Clarifies FCA Fraud Standard

In an opinion openly skeptical of a relator’s knowledge, the 7th Circuit Court of Appeals recently affirmed the dismissal of False Claims Act claims against a Chicago pharmacy brought by a former employee of the pharmacy. The principal claims in the case, Grenadyor v. Ukrainian Village Pharmacy, Inc., were that the pharmacy’s practice of soliciting and keeping its base of mostly Ukrainian customers by providing gifts of caviar and Russian language TV Guides, as well as waiving co-pays, amounted to kickbacks in violation of the federal (and several state) anti-kickback statutes.

Judge Richard A. Posner, the author of the court’s opinion, revealed his distaste for the relator early in the opinion by describing him as a “bounty hunter”. The court rejected most of the relator’s claims because he had failed to identify a single patient who received gift bags worth more than the de minimis $50, even though the relator had amended his complaint ostensibly to correct this deficiency, and had not alleged that the pharmacy intended to offer kickbacks when it certified to the government that it would abide by Medicare and other federal laws. Continue reading “7th Circuit Clarifies FCA Fraud Standard”

October 27, 2014 by Duane Morris

Duane Morris Special Counsel Michael E. Clark to Moderate Tweet Chat: Ebola and Legal Issues Raised by Reactions

Duane Morris special counsel Michael E. Clark will moderate a free Tweet Chat that is being hosted by the ABA Health Law Section on Wednesday, November 5, 2014 at 12:00 noon EST/11:00 a.m. CST.

About the Program

The Health Law Section’s second Tweet Chat will be held on Wednesday, November 5, 2014 at 12:00 noon EST / 11:00 am CST. The hashtag for the Tweet Chat will be #HLSChat. The Section’s Twitter account is @abahealthlaw. Follow the account for more information. The moderator for the chat will be the Section’s Chair, Michael Clark (@MichaelEClark). Also participating will be Kirk Nahra, @KirkJNahrawork an expert on privacy issues, and Melissa Markey, an expert on pandemics.

The topic is Ebola and legal issues raised by reactions. This is a popular topic in light of many fears about an outbreak in the United States and wanting to learn about treatment of individuals who have come back with the virus. Please join us to discuss these issues and share your ideas, thoughts and insights.