Source: https://ccbjournal.com/articles/false-claims-act-anti-kickback-act-potent-combination-against-health-care-industry-and
Timestamp: 2019-04-21 06:57:07+00:00

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The False Claims Act & The Anti-Kickback Act - A Potent Combination Against The Health Care Industry And Growing Even Stronger?
As those in the health care industry undoubtedly know, the past decade has seen an explosion in the number of health care actions brought under the civil False Claims Act. Originally enacted during the Civil War to combat the bilking of the government by corrupt defense contractors1 , the False Claims Act ("FCA") was amended in 1986 to encourage more private " qui tam " lawsuits and to spur the federal government to prosecute more actions.2 The government and whistleblowers complied. In 2005, the Department of Justice reported that since the 1986 amendments, the federal government has recovered over $15 billion from FCA suits and investigations, much of it from the health care industry, and $1.4 billion in 2005 alone.3 If that were not enough to strike fear into the industry, in recent years, private whistleblowers and the government have successfully pursued a new type of FCA claim - based on the Anti Kickback Act. This marks a significant development in health care litigation, and one that means even greater financial exposure for health care providers.
The Anti-Kickback Act contains no private right of action. A private plaintiff may not sue a health care provider under the AKA.12 Nor does the Act state that payment from the government is conditioned upon compliance with the statute. Nevertheless, the government and qui tam plaintiffs have successfully argued across the country that violations of the AKA, a criminal statute, can serve as the basis for a claim under the False Claims Act. Under this theory, a claim to the government is rendered "false" for purposes of the FCA if the medical services or items were furnished in violation of the Anti-Kickback Act notwithstanding the fact that the services or items provided were themselves appropriate and proper.
For the health care industry, the implications of McNutt are alarming.30 The Medicare enrollment form upon which both the government and the Pogue II relator relied requires providers to certify that they will comply with "all Medicare laws, regulations and program instructions" and that they understand such compliance is a condition of payment.31 Followed to its logical conclusion, then, the Eleventh Circuit's holding in McNutt , as well as the reasoning of the Pogue II court, suggest that once a provider signs the enrollment certification - which it must do to participate in Medicare - it opens itself up to be sued under the False Claims Act for a violation of any "Medicare law, regulation, or program instruction" at any time.
Only time will tell what the government's success in McNutt will mean for the health care industry. Given the number of contexts in which the government and whistleblowers have already pursued Anti-Kickback Act FCA claims - for example, disguised physician referral fees; Stark self-referral violations; below market rent; consulting agreements; unreported discounts; and various pharmaceutical company marketing practices - health care providers must be ever vigilant in reviewing their financial arrangements with other health care entities and professionals. A strong compliance program is essential.1 See United States v. McNinch, 356 U.S. 595, 599 (1958).
2 See U.S. ex rel Mistick PBT v. Housing Authority of City of Pittsburgh, 186 F.3d 376, 400 (3d Cir. 1999) (Becker, C.J. dissenting) (discussing primary aims of 1986 FCA Amendments).
3U.S. Department of Justice Press Release, November 7, 2005, available at www.usdoj.gov/opa/pr/2005.
4 See 37 U.S.C. 3729 et seq.
5 See id . at 3730(b).
6 See id. at 3730(d).
7 See Robert N. Rabecs, Kickbacks as False Claims: The Use of The Civil False Claims Act To Prosecute Violations of The Federal Health Care Program's Anti-Kickback Statute, 2001 L. Rev. Mich. St. U. Det. C.L. 1, 39-41 (2001).
8 See 42 U.S.C. 1320a-7b(b).
9 See id. at 1320a-7b(b); 1320a-7(a).
10 See id. at 1320a-7a(a); 1320a-7(b).
11 See Rabecs, supra note 7 at 5-20.
12 See United States ex rel. Barrett v. Columbia/HCA Healthcare Corp . , 251 F.Supp.2d 28, 37 (D.D.C. 2003).
13914 F.Supp. 1507 (M.D. Tenn. 1996) ("Pogue I").
14125 F.3d 899 ( 5th Cir. 1997).
15 See Pogue I, 914 F.Supp. at 1513 .
16 See United States ex rel. Pogue v. Diabetes Treatment Centers of America, Inc . , 238 F.Supp.2d 258, 263-66 (D.D.C. 2002) ("Pogue II").
17 Pogue II, 238 F.Supp.2d at 264 (emphasis added); Medicare Enrollment Application, CMS Form 885A, available at www.cms.hhs.gov/cmsforms/downloads/cms855a.pdf.
18 See Thompson, 125 F.3d at 901.
20 See Rabecs , supra note 11, at 56.
21 See Thompson , 125 F.3d at 902-03.
22 See id . at 903.
23 U.S. ex rel. Thompson v. Columbia/HCA Healthcare Corp., 20 F.Supp.2d 1017, 1041-42, 1046 (S.D. Tex. 1998).
24386 F.3d 235 (3d Cir. 2004).
25 See id . at 236-37. See also U.S. ex rel. Bidani v. Lewis, 264 F.Supp.2d 612 (N.D. Ill. 2003) (permitting FCA suit to go forward based on allegations that medical supplier defendants received discounts in violation of AKA).
26423 F.3d 1256 ( 11th Cir. 2005).
27 See id . at 1258 .
28 See United States ex rel. McNutt v. Haleyville Medical Supplies, Inc., Civ. A. No. 01-3156, slip op. 3-7 (N.D. Ala. July 20, 2004).
29 McNutt, 423 F.3d at 1260 .
30 See Ronald H. Clark, Prospective Certifications and The False Claims Act , available at www.arentfox.com/legal_updates/content1236.html.
31 See McNutt, Civ. A. No. 01-3156, slip op. at 2 (quoting Medicare enrollment form).

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