False Claims Act Statistics, News & Analysis

"The Benefit of Hindsight": The D.C. Circuit Holds That the Government's Failure to Seek Repayments After Investigating a Relator’s Allegations Is "Very Strong Evidence" of Immateriality

On Friday, the D.C. Circuit issued its first decision applying Universal Health Services, Inc. v. United States ex rel. Escobar. The D.C. Circuit’s decision, United States ex rel. McBride v. Halliburton Co., provides important guidance regarding the False Claims Act’s materiality standard and applies that standard to an implied certification theory.

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Double Dipping: Liability for FCA Violations Doesn't Necessarily End with the DOJ

Last month a federal judge in Tennessee approved a $60 million settlement in a shareholder derivative action brought on behalf of Community Health Systems, Inc., officially resolving five years of litigation. A qui tam FCA action based on the same underlying conduct settled for $98 million in 2014, not including the attorneys’ fees and expenses also owed. Both actions arose from allegations that the company shirked the traditional evidence-based and objective admissions criteria used by most hospitals in favor of more lenient criteria designed to steer patients toward medically unnecessary inpatient admissions. Allowing patients to be treated inpatient rather than outpatient allegedly allowed Community Health Systems to receive hundreds of millions of unwarranted Medicare and Medicaid reimbursements for the inpatient services. The derivative suit plaintiffs claimed that the actions of the officers and directors left the company open to legal liability, including the FCA claims, resulting in substantial harm to the company’s reputation and financial health. This settlement is a cautionary tale for all public companies facing potential FCA claims: liability and fees may not end with a settlement with the DOJ.

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Supreme Court Nominee Judge Gorsuch on the False Claims Act

President Trump recently announced that he was nominating Judge Neil M. Gorsuch to fill the Supreme Court seat vacated one year ago by the death of Justice Antonin Scalia. We at LLB went to work researching what a Justice Gorsuch might mean for future case law construing our favorite statute, the False Claims Act. Here is what we found.

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  • 09
  • February
  • 2017

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Baby, It’s Cold Outside – Federal Hiring Freeze and the Government Contractor

We may be experiencing an unusually warm spring, but for government contractors the outlook is becoming icier and more treacherous as the impact of President Trump’s federal hiring freeze takes shape. The hiring freeze, enacted through an executive order issued on the first full working day of the new administration, applies to all federal civilian employees in the executive branch, with certain enumerated exemptions. Those exceptions include military personnel, personnel deemed “necessary to meet national security or public safety responsibilities,” or specific personnel deemed necessary by the Director of the Office of Personnel Management. During the period of the freeze, no vacant civilian position may be filled and no new positions may be created. This winterization of the federal government is indefinite in length, hinging on the implementation of an as-yet-unformed plan from the Office of Management and Budget “to reduce the size of the Federal Government’s workforce through attrition.”

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  • 07
  • February
  • 2017

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The Ratchet Clicks: DOJ Increases FCA Penalties, Applies Worrisome Retroactivity Rule

Last week, we noted that DOJ missed the January 15 deadline for issuing its annual inflation adjustments to the FCA’s penalties. Perhaps DOJ read our post. Two days later, DOJ released for public inspection its FCA penalty adjustment, which was published in the Federal Register and took effect on February 3, 2017. As expected, DOJ has fallen in line with the Department of Commerce’s (“DOC’s”) earlier FCA penalty adjustment, increasing FCA penalties from between $10,781 and $21,563 to between $10,957 and $21,916.

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