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FCA Targets Areas for 2020 and Increased Use of the Voluntary Disclosures

Jody Hunt, Assistant Attorney General for DOJ’s Civil Division, and Michael Granston, Deputy Assistant Attorney General, Commercial Litigation Branch, spoke recently about False Claims Act (“FCA”) enforcement at the Federal Bar Association’s annual Qui Tam Conference. 

During their presentations, Hunt and Granston identified three priorities for FCA enforcement this year, including: (1) fraud that affects nursing homes or nursing home patients; (2) fraud involving Medicare Advantage plans; and (3) potential for fraud arising out of the evolving landscape of electronic health records.

Recent settlements under the Federal False Claims Act (“FCA”) involving nursing homes underscore the continued focus on misconduct in this area even when large sums of money are not involved.  While cases are often pursued civilly through the FCA, parallel criminal prosecutions are on the rise.  Formed in 2016, The DOJ’s Elder Justice Initiative remains active and is comprised of representatives from U.S. attorneys’ offices, state Medicaid fraud control units, state and local prosecutors’ offices, the U.S. Department of Health and Human Services (“DHHS”), state adult protective services agencies, and various law enforcement agencies.  Bases of liability could include state and federal criminal laws, the FCA, and the Health Insurance Portability and Accountability Act (“HIPAA”).  Attorney General Barr just announced the largest coordinated sweep of elder fraud cases in history, charging more than 400 defendants in 2020 alone.  The alleged losses are over a billion dollars and are described as an Agency Priority Goal, one of DOJ’s top four priorities. Click here to view more information.

As to Medicare Advantage, Hunt signaled that the DOJ intends to pursue insurers – as opposed to health care providers – in connection with their pervasive practice of billing the Government for as many diagnoses codes as possible without making enough of an effort to identify and report providers’ submissions use of erroneous codes that should have never been reimbursed in the first place. According to Hunt, the insurance companies ignore unsupported diagnosis codes and simply pass the charges on to the Government without exercising due diligence and oversight.

Hunt also addressed the DOJ’s plan to utilize its dismissal power on merit-less and burdensome qui tam FCA cases following an internal policy memorandum issued in early 2018, which (in reference to its author) is now commonly referred to as the “Granston Memo.” Prior to the issuance of the Granston Memo, the DOJ used its dismissal authority in about 45 cases in approximately 30 years. In the brief 2-year period since the memo was released, however, the Government has exercised its power to dismiss merit-less cases 50 times. In many of those cases, the Government cited the enormous burdens that would be imposed on the DOJ if it were required to respond to discovery in cases that it deemed to be frivolous or without merit.  

During the Bar Association’s qui tam conference, however, Hunt stated that the DOJ will not dismiss potentially meritorious cases solely because it might be required to expend resources responding to discovery. Hunt’s statement during the conference follows numerous declarations by the DOJ over the last two years that defendants in qui tam actions should not issue discovery on Government agencies as a tactic in hopes of triggering the DOJ to uses its Granston Memo dismissal authority. The Government will instead continue to weigh a variety of factors when determining whether it would be appropriate to intervene in a matter for purposes of seeking dismissal.

In reference to the FCA cooperation policy announced last year, Hunt also stated that the DOJ will continue to show leniency towards companies that cooperate with FCA investigations, and cooperation credit has been codified in the DOJ’s Justice Manuel, see here. The guidance includes voluntary disclosure and ten other forms of cooperation that could trigger some amount of leniency.  Whether to admit liability or provide information on possible misconduct continues to be a factually specific undertaking best counseled by experienced government investigations and FCA attorneys.

© Polsinelli PC, Polsinelli LLP in CaliforniaNational Law Review, Volume X, Number 65


About this Author

Melissa S. Ho Shareholder Phoenix Antitrust, Antitrust - Health Care Compliance, Fraud and Abuse, Stark, Financial and Securities Litigation, Financial Technology, Regulation Government Investigations, Health Care Litigation

Melissa Ho is a trial attorney with a detailed understanding of government regulations and business litigation. A former prosecutor, she is sympathetic to the disruption and chaos a government inquiry and criminal investigation can cause. 

Melissa defends individual clients against a wide variety of criminal allegations, including health care fraud, qui tam, RICO violations, bank fraud, real estate fraud, mortgage fraud, foreign corrupt practices, securities fraud, water and air quality violations, government corruption, procurement and public fraud, professional misconduct, civil...

Kevin M. Coffey, Polsinelli PC, Chicago, Planning Advocacy Lawyer, Compliance matters Attorney

Kevin Coffey blends advocacy skills and a proactive planning approach in providing comprehensive health care legal representation to a broad range of organizations in fraud and abuse and compliance matters. He works closely with clients to proficiently respond to investigations based on alleged violations of various civil, criminal, and administrative laws, including the False Claims Act and OIG’s Civil Monetary Penalties. Kevin is well-versed in federal and state health care regulatory schemes and laws.