Tag Archives: False Claims Act

Discovery Ruling in District of Minnesota May Have Far-Reaching Implications for FCA Defendants

In a concise, six-page discovery order, a federal judge in Minneapolis may have just started the proverbial shifting of tectonic plates undergirding routine defense procedures in False Claims Act (FCA) litigation by requiring a defendant in an FCA lawsuit to produce the information provided to the Department of Justice (DOJ) during the DOJ’s process of determining whether to pursue the matter.

The FCA creates liability for persons or entities found to have knowingly submitted false claims to the government or having caused others to do so. Like some other federal laws, the FCA creates a private right of action; under the act, a private party—a whistleblower or “relator”—may bring a qui tam action on behalf of the government. When initially filed, the court seals the complaint pending the government’s investigation of the case. If the government chooses, it may intervene and pursue the matter. If not, the relator may pursue the case on its own. (In either case, the relator is entitled to a percentage of the government’s recovery.)

View the full Alert on the Duane Morris LLP website.

DOJ Implements 2018 Granston Memo on False Claims Act

In early 2018, the U.S. Department of Justice announced a new policy encouraging prosecutors handling False Claims Act (FCA) cases to seek dismissal of qui tam complaints that threaten the government’s interests. However, it was unclear how and to what extent prosecutors would carry out that directive. Now a year later, federal prosecutors appear to be embracing the new policy—and it is already having an effect on one case involving a drug manufacturer.

The January 2018 Granston memorandum outlined the Department’s new approach to handling FCA prosecutions in “in light of the government’s limited resources.” Under the new policy, prosecutors are encouraged to move to dismiss qui tam claims as a way to “advance the government’s interests, preserve limited resources, and avoid adverse precedent.” This marked a departure from the Department’s previous policy of rarely exercising its statutory authority to dismiss such claims. To guide prosecutors, the memorandum offered a nonexhaustive list of factors as to when a motion to dismiss a qui tam claim is proper. Those factors include: (1) “curbing meritless qui tams”; (2) “preventing parasitic or opportunistic qui tam actions”; (3) “preventing interference with agency policies and programs”; (4) “controlling litigation brought on behalf of the United States”; (5) “safeguarding classified information and national security interests”; (6) “preserving government resources”; and (7) “addressing egregious procedural errors.” Overall, the memorandum instructed prosecutors to seek dismissal when the litigation does not serve the government’s interests.

Read the full Alert on the Duane Morris LLP website.

Supreme Court’s Materiality Standard in United Health Services, Inc. v. U.S. ex rel. Escobar May Limit Criminal Liability in Healthcare Fraud Prosecutions

By Amanda L. Bassen and Michael E. Clark

In healthcare fraud prosecutions under the Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)), the knowing or willful solicitation or receipt, either directly or indirectly, of any remuneration (including kickbacks, bribes or rebates) in exchange for the referral of patients for items or services covered by a federal healthcare program is a criminal offense.  In the seminal case of United States v. Greber, 760 F.2d 68 (3d Cir. 1985), the Third Circuit articulated the “one purpose test,” where so long as “one purpose” of a payment is to induce a referral, a criminal conviction may be sustained under the Anti-Kickback Statute, even if there are other, legitimate purposes for the payment.  Greber’s “one purpose test” has been widely adopted in Anti-Kickback prosecutions.   Continue reading Supreme Court’s Materiality Standard in United Health Services, Inc. v. U.S. ex rel. Escobar May Limit Criminal Liability in Healthcare Fraud Prosecutions