Source: https://www.thefcainsider.com/
Timestamp: 2019-04-19 15:18:03+00:00

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The Supreme Court recently granted certiorari in an Eleventh Circuit False Claims Act (FCA) case, Cochise Consultancy, Inc. v. U.S. ex rel. Hunt, No. 16-12836 (11th Cir. 2018). The Supreme Court will decide how the FCA’s statute of limitations applies in qui tam actions that are brought by a private relator, particularly in cases where the government has declined to intervene, resolving a long standing split among the circuit courts.
Although § 3731(b)(2) operates as a tolling provision to the six-year statute of limitations period in § 3731(b)(1), there has been a historical split among the circuits regarding whether this tolling provision applies when the government declines to intervene in a relator’s action. The key question the Supreme Court will decide is whether the relevant trigger for the limitations period is the government’s knowledge of the material facts or the relator’s knowledge of the material facts.
In Hunt, the district court below ruled that § 3731(b)(2)’s tolling provision was inapplicable in qui tam cases where the government declined to intervene. However, the Eleventh Circuit reversed the Northern District of Alabama, holding that the alternative 3-year limitations period can apply when the government declines to intervene in a relator’s qui tam action.
The Eleventh Circuit also held that the 3-year limitations period is triggered by the government’s knowledge of the alleged fraud, not the relator’s. It also held for purposes of applying the limitations period, the relator’s knowledge of the alleged fraud was irrelevant to the analysis.
The provision applies in cases where the government has declined to intervene, and the clock begins to run when the government learned of the fraud.
The Supreme Court’s decision in Hunt could resolve this split and create a uniform national standard that eliminates confusion and uncertainty for FCA defendants.
Caris Healthcare, L.P. has entered an agreement with the DOJ in which it has agreed to pay $8.5 million to resolve allegations that it violated the False Claims Act. The qui tam action was filed in the Eastern District of Tennessee by a registered nurse who was formerly an employees of Caris Healthcare.
The former employee alleged that Caris Healthcare submitted false claims and retained overpayments in connection with claims for hospice services. The patients at issue were allegedly ineligible for hospice benefits under Medicare because such patients were not terminally ill. According to the complaint, Caris Healthcare was made aware of the ineligibility of the patients, yet continued to submit the claims to Medicare. Allegedly, in an effort to meet the aggressive admissions and census targets set by the company, Caris Healthcare admitted patients whose medical records did not support a terminal prognosis.
The settlement provides another reminder for healthcare entities to ensure that they are billing accurately for services that are covered by Medicare and our properly rendered. In light of the scrutiny on the healthcare industry it is important to separately assess each patient and make individualized determinations regarding care. Moreover, healthcare entities should carefully review internal concerns that are raised both to ensure that the company truly has a top-down culture of compliance, but also to identify and resolve potential issues that may arise.
The United States Attorney’s Office for the Middle District of Florida recently settled a False Claims Act case against Healogics, Inc. (“Healogics”) in which it was alleged that Healogics had knowingly billed Medicare for medically unnecessary and unreasonable hyperbaric oxygen therapy (“HBO therapy”). Under the settlement, Healogics agreed to pay $17.5 million, plus an additional $5.01 that is dependent upon certain financial contingencies. The settlement also provides for a whistleblower share of up to $4,276,000. Healogics also entered into Corporate Integrity Agreement (“CIA”) with the OIG. Pursuant to the five-year CIA, Healogics is subject to both a claims review and a systems review, which are to be performed by an Independent Review Organization.
Healogics manages almost 700 hospital-based wound care centers across the country. The litigation centered around HBO therapy, in which the entire body is exposed to oxygen under increased atmospheric pressure. HBO therapy can be used to treat certain types of chronic wounds.
The allegations against Healogics stemmed from two separate lawsuits: one filed by relator James Wilcox, a former Healogics employee, and a separate lawsuit filed by Dr. Benjamin Van Raalte, Dr. Michael Cascio, and John Murtaugh, who were respectively physicians and a program director who had worked at Healogics-affiliated wound care centers. The relators alleged that, from 2012 to 2015, Healogics knowingly submitted, or caused the submission of, false claims to Medicare for medically unnecessary or unreasonable HBO therapy.
In a Third Amended Complaint that was filed in May 2016, there were allegations of multiple representative instances in which false claims for HBO therapy were purportedly submitted to the government for reimbursement. It was also alleged that patients were subjected to unnecessary procedures, and that “The Healogics Way” – the company’s mission statement for its employees – actually “meant, among other things, fraudulently upcoding debridements, falsifying HBOT eligibility in order to bill for unnecessary but expensive treatments, and requiring all patients to undergo unnecessary testing called transcutaneous oxygen measurement or TCOM.” See United States ex. rel. Van Raalte, et al. v. Healogics, Inc., 14-CV-283 (M.D. Fla. 2014). Notably, the litigation brought by Mr. Wilcox, United States ex rel. Wilcox v. Healogics, Inc., et al., 15-CV-1510 (M.D. Fla. 2015), involved similar accusations against Healogics.
This litigation provides an example of the Government’s focus on cases involving allegations of medially unnecessary treatments being provided to patients. The Government often demonstrates particular interest in such cases both because of the potential financial harm to the public fisc, but also because of the risk of patient harm from patients being exposed to unnecessary medical treatments. The case emphasizes the importance of providers offering medically necessary treatment, and of making individualized decisions about patient care that are tied to the specific circumstances of each particular patient.

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