Healthcare & Life Sciences, Sidley Austin LLP updates

USA

Contributed by Sidley Austin LLP
District court invalidates relators' pre-filing releases on public policy grounds
  • USA
  • 21 November 2018

Former Bayada Home Health Care employees recently alleged that the company had falsely billed Medicare for patients that it had known were not "homebound". Bayada moved to dismiss the suit on the ground that each employee had signed a separation agreement releasing Bayada from "any and all claims" prior to filing the False Claims Act lawsuit. With no binding Third Circuit precedent, the district court looked for guidance among other circuits that pre-filing releases can bar False Claims Act claims.

Private equity funds face increasing risk of False Claims Act liability
  • USA
  • 14 November 2018

Evidence is mounting that the Department of Justice (DOJ) is willing to pursue private equity funds in False Claims Act cases, particularly ones based on alleged violations of healthcare fraud and abuse laws. Earlier in 2018, the DOJ intervened for the first time in one such False Claims Act case against a private equity sponsor, the fund's portfolio pharmacy and two pharmacy employees.

Court vacates Medicare Advantage overpayment rule and curtails DOJ's pursuit of False Claims Act damages
  • USA
  • 03 October 2018

The US District Court for the District of Columbia recently vacated CMS's 2014 final overpayment rule, applicable to the Medicare Advantage programme, granting summary judgment to UnitedHealthcare that the final rule violated the Medicare statute, was inconsistent with the Affordable Care Act and the False Claims Act and violated the Administrative Procedures Act. Because the decision vacates the overpayment rule entirely, further rulemaking may be necessary.

Sixth Circuit's split decision highlights questions about pleading standard for materiality after Escobar
  • USA
  • 04 July 2018

The Sixth Circuit recently resurrected the relator's case in United States ex rel Prather v Brookdale Senior Living Communities, Inc. In a two-to-one decision, the majority held that the relator's materiality and scienter allegations sufficed under Universal Health Services, Inc v United States ex rel Escobar. The gulf between the majority and the vigorous dissent by the judge reflects persistent questions about how Escobar applies at the pleading stage.

DOJ defends use of statistical sampling to prove False Claims Act liability
  • USA
  • 30 May 2018

The Department of Justice has stepped in to defend a relator's attempt to use statistical sampling to prove False Claims Act liability, contending that if the government cannot utilise sampling in False Claims Act cases, "then defendants would be incentivized to commit fraud on a large scale". The resolution of this issue will have significant implications on the scope of False Claims Act claims going forward, particularly those based on lack of medical necessity.


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