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.
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.
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.
The US Department of Justice (DOJ) recently filed a complaint in intervention against a compounding pharmacy, alleging that it had violated the False Claims Act by paying illegal kickbacks to induce prescriptions for drugs reimbursed by TRICARE, the federal healthcare programme for active duty military personnel, retirees and their families. Notably, the DOJ was also pursuing claims against a private equity firm that had a substantial ownership stake in the pharmacy.
In its recent decision, the Second Circuit held that the relator's failure to plead sufficiently that the allegedly defrauded agency had changed its reimbursement practices after becoming aware of information supposedly withheld by the defendant doomed the complaint on materiality grounds. The decision underscores the significance of the materiality requirement at the motion to dismiss stage.