“The early days of the pandemic may have delayed enforcement efforts somewhat, but the activity toward the end of last year and so far this year suggests the lull is over,” said Matthew M. Curley, a member of the firm’s Healthcare Fraud Task Force and lead editor of the Healthcare Fraud & Abuse Review. “Since 2010, more than 7,000 whistleblower cases have been filed under the False Claims Act, and whistleblowers have collected nearly $4.2 billion for their efforts during those years. There can be no question that the financial incentives to file qui tam whistleblower lawsuits remain compelling.”
Sectors and issues to watch
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For hospitals and health systems, regulators and whistleblowers continued their focus on issues arising under the Anti-Kickback Statute and the Stark Law. Scrutiny of financial arrangements between hospitals and physician referral sources resulted in a number of high-profile False Claims Act settlements last year. “Management services agreements and alleged physician inducements continue to receive significant scrutiny from regulators and whistleblowers,” said Anna M. Grizzle, a member of the firm’s Healthcare Fraud Task Force who advises clients in connection with enforcement and compliance-related issues. “These settlements are a reminder that even during an unprecedented pandemic, healthcare providers cannot afford to lose focus on the importance of ensuring their relationships with referral sources are compliant with the applicable regulations.”
The pharmaceutical and medical device industries continued to account for the largest recoveries within the healthcare industry last year. Many of the headliner settlements related to the opioid crisis and many involved allegations of Anti-Kickback Statute violations. The government also stepped up its scrutiny of payments to physicians for speaking engagements where payments were intended to induce prescriptions. In what is surely a sign of things to come, HHS-OIG issued a Special Fraud Alert on speaker programs, highlighting the risks such programs pose.
“Enforcement actions involving speaker programs reflect a growing focus by regulators on the relationship between pharmaceutical and medical device manufacturers and providers,” said John E. Kelly, managing partner of Bass, Berry & Sims’ Washington, D.C., office and former Assistant Chief for Healthcare Fraud at the DOJ. “HHS-OIG and the DOJ are routinely looking closely at both sides of these relationships—in this case, manufacturer and provider—and this is a clear reminder to the industry that the Anti-Kickback Statute is a two-way street. For providers, the old adage rings true: If an offer sounds too good to be true, it probably is.”