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False Claims Act Statistics, News & Analysis

  • 03
  • November
  • 2017


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Frighteningly Large Settlement for Hospice Provider Whose Patients Lived

The day before Halloween, the DOJ announced that Chemed Corporation and its various subsidiaries have agreed to a $75 million settlement for submitting allegedly false hospice services claims to Medicare for reimbursement. Touting this as “the largest amount ever recovered under the False Claims Act from a provider of hospice services,” the government sets the tone early in the new fiscal year for a high-recovery agenda.

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  • 28
  • September
  • 2017


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Futrell Enters the Fray on Whether the FCA Covers the E-Rate Program Despite Funding from Telecomm. Industry

Last month, a Missouri district court in U.S. ex rel. Futrell v. E-Rate Program, LLC handed down a decision of interest to the telecommunications industry. The defendant contracts with schools and school districts to help them obtain funds under the E-Rate Program, a program that provides subsidies and discounts to schools to secure affordable telecommunications and Internet access. The program is administered by USAC, a private non-profit organization subject to regulations of (but not controlled by) the FCC, and is funded by mandatory contributions from private interstate telecommunications carriers. The Futrell court found that FCA liability may exist in such circumstances, even though the USAC funds are not government dollars. The Futrell decision adds to a disagreement between at least two district courts and one circuit court on this issue.

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Back to Basics with the Original Source: Pre-ACA Public Disclosure Bar

With the fate of the Affordable Care Act in question these days, the FCA community nevertheless continues its struggle to understand and cope with the changes wrought to the statute over seven years ago through the 2010 ACA amendments. And yet, due in large part to the quirky nature of the FCA’s sealing provision, which results in cases existing “undercover” for years, application of pre-ACA law remains an occasional necessity. In September, the Eighth and Fifth Circuits each examined the question of what it means to be a pre-ACA “original source,” the saving grace for relators whose allegations would otherwise be subject to dismissal under the public disclosure bar.

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Litigation Update: Rose District Court Recognizes Sanford-Brown Decision and Certifies Post-Escobar Questions for Interlocutory Appeal

We have been monitoring United States ex rel. Rose v. Stephens Institute, a post-Escobar implied false certification case in which the Northern District of California considered whether a university violated the FCA when it obtained funding from the U.S. Department of Education (DOE) by allegedly falsely certifying compliance with Title IV of the Higher Education Act. Relators allege in this non-intervened case that the university was providing incentive payments to student recruiters, which is a violation of Title IV. As we reported here, the court ruled against the university on both falsity and materiality and the university moved to certify the district court’s order for immediate appeal. Over the government’s objections in a statement of interest, the district court on October 28, 2016 certified three of the university’s four proposed questions for interlocutory appeal and stayed the case pending resolution of the university’s appeal.

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Seventh and Eighth Circuits Grade Relators’ Materiality Claims in First Appellate Materiality Decisions Applying Escobar

Last week, the Eighth Circuit issued the first appellate decision to engage in a detailed application of the False Claims Act’s (FCA) materiality standard after Universal Health Services, Inc. v. U.S. ex rel. Escobar, 136 S. Ct. 1989 (2016). The court, reviewing a summary judgment ruling against the relators below, reversed, concluding that even under the Escobar’s “demanding” materiality rule, there was a genuine issue of material fact about whether the regulatory and contractual violations at issue were material. The Seventh Circuit quickly followed this week, concluding that the relator presented no evidence of misrepresentations connected with claims for payment and no evidence that the government’s decision to pay actually would have been affected by knowledge of the defendant’s alleged violations.

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Eighth Circuit Decision Suggests Supreme Court's Rejection of "Objectively Reckless" Test in Patent Case Leaves Intact Safeco's "Objectively Reasonable" Test for False Claims Act Knowledge

Courts finding that FCA defendants lacked knowledge sufficient to impose liability have frequently cited the Supreme Court’s holding in Safeco Insurance Company of America v. Burr, that where there is more than one objectively reasonable interpretation of a statute, regulation, etc., a defendant cannot be found to have acted knowingly or recklessly.

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