Category: Merle M. DeLancey Jr.

Merle M. DeLancey Jr.

Over the last decade, False Claims Act (“FCA”) litigation has exploded, and actions asserting new theories of liability are resulting in increasingly large recoveries. Last year the U.S. Department of Justice (DOJ) announced that it had recovered $3.8 billion under the federal FCA in FY 2013. From all appearances FY 2014 promises to be another “banner year for civil fraud recoveries,” and the DOJ has already put up impressive numbers, particularly against pharmaceutical and medical device companies, including a massive $2.2 billion settlement with Johnson & Johnson, as well as settlements with Endo Health Solutions Inc. ($192.7 million), Halifax Hospital Medical Center ($85 million), and Amedisys, Inc. ($150 million).

While the DOJ continues to vigorously pursue FCA cases against companies in the health care and other sectors, cash-strapped states are now following suit. State Attorneys General (AGs) have increasingly pursued novel and creative FCA actions, as have private plaintiffs, who are authorized by qui tam provisions to stand in the shoes of states to sue and receive part of any recovery. A driver of this action was the Deficit Reduction Act (DRA) of 2005, which authorized states to receive, in addition to their own recoveries, 10 percent of the federal government’s share of recovered Medicaid funds if their FCAs are at least as robust as the federal FCA. As a result, since 2005 nearly a dozen states have either enacted false claims statutes or have amended existing statutes to make them equally or more robust than the federal FCA, including incorporating qui tam provisions and broadening the circumstances under which companies can be found liable for violations.

For example, late last year, in response to the DRA, New York state amended its FCA (New York State Finance Law § 187, et seq. (NY FCA)), to bring its false claims law more in line with the federal FCA. The New York statute now includes a “reverse false claims” provision that imposes liability as broadly as the federal FCA, providing that a person may be held liable for violating the NY FCA if that person “[k]nowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the state or a local government, or conspires to do the same….” (NY FCA § 189(1)(h)). The New York amendments also allow the state, as intervenor in a qui tam case, to relate back to the qui tam plaintiff’s filing date for statute of limitations purposes, expanding the period for which the state can seek recoveries. In addition, the law provides attorneys’ fees for successful qui tam plaintiffs, incentivizing the plaintiff’s bar to partner with the state or pursue their own cases under the NY FCA. Continue reading “State False Claims Act Enforcement Explodes in 2014”

Merle M. DeLancey Jr. and Deborah P. Kelly

In the past two months, three important changes took place that will affect the federal workplace. First, in early February, President Obama signed an Executive Order raising the minimum wage for federal contractors from $7.25 to $10.10. On the heels of that Executive Order, in March, the President signed a memorandum directing the Department of Labor (“DOL”) to “propose revisions to modernize and streamline” the existing Fair Labor Standards Act’s overtime regulations. Finally, three days ago, the DOL’s new federal contract affirmative action regulations took effect—a development we first analyzed in this alert. Below, we summarize these three events and how each could affect your federal contracting business.

I.     Obama’s Executive Order Regarding Federal Contractor’s Minimum Wage

With the March Executive Order, President Obama raised the minimum wage for federal contractors. How will this new Executive Order affect your federal contracts? Below, we highlight the critical questions and answers regarding the scope and substance of this new Executive Order. Continue reading “Recent Changes to Federal Employment Regulations”

Merle M. DeLancey Jr.

False Claims Act (FCA) suits against health care providers have dramatically risen during the last three years. However, recent decisions indicate that courts are becoming increasingly skeptical of suits which allege that technical violations of Medicare regulations are actionable FCA violations. The most recent decision indicating such increasing skepticism was issued by the Eighth Circuit Court of Appeals last week in U.S. ex rel. Ketroser v. Mayo Foundation, 2013 WL 4733986, No. 12-3206 (8th Cir. Sept. 4, 2013). In that case, relators brought a qui tam action under the FCA against the Mayo Clinic and several related entities (Mayo). Relators asserted that Mayo falsely billed Medicare for surgical pathology services when it did not submit written reports for each surgical pathology service billed, which was allegedly required by Medicare regulations. The Eighth Circuit found that the regulations at issue did not require such written reports. However, the Eighth Circuit also signaled that even if Mayo was noncompliant with Medicare’s rules and requirements, the relators had not established the “scienter” necessary to show that Mayo “knowingly” submitted false or fraudulent claims for Medicare payment in violation of the FCA. The court concluded that because Mayo’s interpretation of the applicable requirements was at least reasonable, it did not violate the FCA even if it did make a technical mistake under the rules, because it did not act “with the knowledge that the FCA requires before liability can attach…” Continue reading “Courts Are Increasingly Skeptical of FCA Suits Alleging Technical Violations of Medicare Regulations”