The U.S. Department of Justice (DOJ) announced in May 2023 that it had obtained a judgment of more than $487 million against the parent company of Precision Lens for alleged violations of the False Claims Act (FCA), but the amount of that decision has been overturned. In a Feb. 8 decision, the U.S. District Court for the District of Minnesota decreed that the judgment be reduced to less than $217 million, an outcome which suggests that some of the more excessive fines levied against health care companies will be viewed with more skepticism upon appeal.
Fraud on federal health programs often revolves around illicit billings for in vitro diagnostics, but the U.S. Department of Justice (DOJ) has added mobile cardiac positron emission tomography (PET) to the list of technologies that have been used to violate the law.
The U.S. Department of Justice (DOJ) has announced a conviction obtained in federal court of an employee of a medical device manufacturer who was charged with forging documents that purported that his employer had obtained clearance for two medical devices. Peter Stoll III, who was employed by Aesculap Inc., of Center Valley, Pa., will serve 12 months in prison and a year of supervised release in one of the most egregious examples of fraudulent med tech behavior in recent memory.
One of the more significant enforcement actions to date in 2024 is the $13 million hit taken by the owner of a clinical lab in New Jersey for allegations of payment of kickbacks for unnecessary testing, suggesting that this new year will be a robust one for federal fraud enforcement in the U.S.
The U.S. Office of Inspector General (OIG) reported that it and Philips Respironics have come to terms over allegations that the company violated the False Claims Act (FCA) by offering free CPAP masks to operators of sleep clinics
Biotelemetry Inc. and its subsidiary, Lifewatch Services Inc., agreed to pay $14.7 million to settle a whistleblower case alleging overbilling for remote cardiac monitoring. The qui tam case contended that the company’s online portal for its ACT-3L/MCT-3L device and its staff consistently and intentionally forced physicians’ staff to select or themselves selected the most expensive application for the device, despite intent and even written instructions to choose a less expensive service.
The qui tam or whistleblower lawsuit under the U.S. False Claims Act (FCA) has driven a large volume of litigation against life science companies, but three Supreme Court justices expressed misgivings about the constitutionality of the qui tam relator in the Court’s hearing of Polansky. Should a fourth Supreme Court justice harbor similar misgivings, the matter could be ripe for a hearing at the Supreme Court with the possibility that the qui tam relator would then be declared unconstitutional.
The U.S. Department of Justice (DOJ) reported on October 2 that Genomic Health Inc. (GHI), now a subsidiary of Exact Sciences Corp., has agreed to pay $32.5 million to settle allegations that the company violated the False Claims Act (FCA). The allegations include that GHI had manipulated the dates upon which a test was administered in order to boost revenues from public health programs, an activity that ended up costing the company double damages.
The U.S. Supreme Court has heard two cases this year regarding the False Claims Act (FCA), including the Shutte v. Supervalu case, which the court has remanded to the Court of Appeals for the Seventh Circuit. However, even though the case has not come to a close, Jay Stephens of Kirkland & Ellis LLP, believes that the Supreme Court’s handling of Supervalu creates an environment in which the process of discovery will become much more burdensome for all involved.
U.S. federal government agency recoveries under the False Claims Act (FCA) are down slightly in the first half of 2023 relative to the first half of 2022, but that doesn’t mean companies in the life sciences can afford to let their guard down. The Senate is examining two pieces of legislation that would significantly amplify the risk for device and drug makers, including a Senate bill that would eviscerate the materiality standard as set by the U.S. Supreme Court in Escobar.
