Recent Fraud and Abuse Cases

Introduction (00:01):
Welcome to Health Law Talk, presented by Chehardy Sherman Williams Health Law Talk. Broken down through expert discussion, real client issues and real life experiences, breaking barriers to understanding complex healthcare issues is our job.

Conrad Meyer (00:23):
So good morning or good afternoon whenever you’re listening to this Conrad Meyer here and another edition of Health Law Talk. Rory Belina in the office. How’s it going? Studio here. Today we’re going to be pulling back the curtain on healthcare fraud and diving into some recent groundbreaking cases that could reshape the landscape for healthcare providers nationwide. So Rory, imagine this, your doctor Bills Medicare for services never performed hospitals, fake patient records. Companies are lavishly rewarding physicians with trips and luxury perks. We’re going to go over some court cases today and court decisions today that are going to tighten the noose on healthcare fraud. And we have a list here. This is just cases in the last year. And so what I guess makes me, I’m just shocked, is that for as long as you and I have been practicing, I just can’t believe this stuff still goes on.

Rory Bellina (01:23):
Yeah, yeah. It’s still out there. We always get the emails and the notices about the exciting ones with the big recoveries for the government, but I’m sure there’s a hundred other ones that are much smaller amounts that are going on that never get on their radar. But yeah, I think it goes on intentionally or not every day at different places, and we get to see the big ones.

Conrad Meyer (01:47):
So let’s just dive right in because I think it’s really interesting. So we have about nine or 10 cases here that I’ve kind of pulled just for this sort of a special edition, what’s going on in fraud and abuse litigation across the country. And the first one, I was shocked to read this. This is a case that’s United States XL Zara versus the Florida Medical Associates. Now, this is a published case, and in this case, the relator is a guy named, or maybe it’s a woman, Clarissa Zov looks like, who filed a false claims act against her employer, which was the Florida Medical Associates alleging fraud, fraudulent misrepresentations to Medicare, and specifically focused on claims that the defendant here misrepresented patient conditions to secure increased Medicare. So Upcoding

Rory Bellina (02:39):
Uping it. Yeah,

Conrad Meyer (02:39):
Upcoding, right? And initially, so the government chooses not to intervene, which is important. So for you listeners out there, when you file a key TAM or later case, you have to first file it under seal and present it to the Department of Justice and the A USA in your whatever federal area you’re in. And you have to entice them to want to get in. You have to give them the evidence to see if they want to intervene. And usually what happens is if they intervene, the government takes the case and you kind of sit back for the ride.

Rory Bellina (03:12):
Or sometimes they’ll say, no, you proceed if you want at your cost or peril, and we could jump in at any time.

Conrad Meyer (03:19):
That’s true too,

Rory Bellina (03:19):
Which it looks like that might’ve happened here.

Conrad Meyer (03:21):
And so the benefit or the detriment is that the benefit is if the government takes it, no cost to you, government picks up the cost. If the government doesn’t intervene, you’re going on your own dime, but you get a larger piece of the reward should there be an award.

Rory Bellina (03:36):
Right? Right.

Conrad Meyer (03:37):
Okay. So this time, it looks like in this case, and I’m probably not saying it right, Zov

Rory Bellina (03:42):
Sounds close enough,

Conrad Meyer (03:43):
Zov that they did not intervene, however, they entered the case later to address constitutional challenges brought by the Florida Medical Associates against the FDA’s Ketan provision itself. So this is really interesting because the court ruled in this particular case, the issue was brought out was whether or not the False Claims Act ketan provision violated the appointments clause of Article two of the US Constitution. I have never

Rory Bellina (04:17):
Seen this,

Conrad Meyer (04:18):
Right? This is a first for me. So this is a case of first impression of course. And the court concluded that the FCA ke tamer later acts as an officer of the United States exercises significant executive authority because they litigate on behalf of the government. So consequently, according to this court, which I mean, I’m kind of seeing where this goes, that the relators must be appointed in accordance with the appointments clause. And because Zara was not properly appointed under Article two, but rather acted as a self-appointed, the court ruled it violated the constitutional of provisions, and the remedy was to dismiss the key to him entirely.

Rory Bellina (05:02):
So what does that mean for every other case? That’s the ripple.

Conrad Meyer (05:06):
I don’t know. This has got to go all the way up because I mean, think about this. It defeats the purposes of relator,

Rory Bellina (05:14):
Right?

Conrad Meyer (05:14):
I mean, the whole purpose of the relator and to be able to accomplish what you’re going to get, you have to worry about publishing things so that you’re first to file. You are not putting things in the public domain. So the government can’t come back and say, oh, you’re not going to get your relator fee because this was released to the public domain. So if you have to be appointed, well, one who does the appointment, that’s what I want to know. Who actually makes the appointment if we have to do this? And number two, doesn’t that defeat the relator purpose? So you would never have a

Rory Bellina (05:45):
Relater then,

Conrad Meyer (05:46):
Ever, ever. I mean, I guess I would like to delve more into the reasoning behind this. I mean, I know we didn’t get too deep into the weeds,

Rory Bellina (05:56):
But this could affect all relators everywhere going forward now

Conrad Meyer (06:00):
Everywhere.

Rory Bellina (06:01):
Because now every relator has to be appointed. I

Conrad Meyer (06:04):
Guess that’s what they’re calling

Rory Bellina (06:06):
Saying. And what’s the process for being appointed, and how long does that take?

Conrad Meyer (06:10):
I don’t know. And who does it? I mean, that’s just crazy.

Rory Bellina (06:15):
I’m curious, like you said, this has to be challenged and is this limited to justice federal jurisdiction that this fell under, presumably in Florida? Because I can’t see all courts following this. It’s a federal court, but I can’t see other courts across the United States

Conrad Meyer (06:31):
Following this, all the circuits. So even if there’s a split in a circuit, I mean, I’m sure it has to go all the way up to the Supremes, but to scotus, and I just,

Rory Bellina (06:40):
Why would the, okay, here’s a question for you. Why do you think the government took this position if the government, or let’s say the OIG G?

Conrad Meyer (06:48):
Well, it wasn’t, the government didn’t take this position. The defendant did. The defendant Florida, Florida Medical says, well, no, Zav Roth, you can’t proceed under the ke TAM action because you were not appointed under Article two of the Constitution.

Rory Bellina (07:03):
And we don’t have the full case in front of us, but I want to know, the government chose not to intervene. However, it later entered the case solely to address constitutional challenges. I’m curious what the government’s position was when they intervened on

Conrad Meyer (07:14):
This. That would be interesting to know. But then again, to me, what this, it sounds like to me, this shuts down relators.

Rory Bellina (07:22):
Absolutely. At least until this goes all the way up. Yeah.

Conrad Meyer (07:26):
Yeah. Interesting.

Rory Bellina (07:27):
Okay.

Conrad Meyer (07:28):
Well look, so that’s one of the 10 cases. The next one, United States versus RA Health. So here we have another keam. This is related where Kim Hartman Anaba, Debra Woody accused RA Health, a psychiatric care provider of committing multiple fraudulent schemes to defraud Medicare, Medicaid. Those schemes included falsifying patient records, billing for UN or excessively billed services and intentionally misclassifying juvenile and adult patients to exploit higher reimbursement rates. One of the more particular serious allegations described the falsification of mandatory 15 minute patient observation records at acute psych units reportedly resulting in harm to patient safety and financial fraud. So again,

Rory Bellina (08:19):
Your standard False Claims Act,

Conrad Meyer (08:20):
Standard False Claims Act seems pretty standard for falsifying records, billing, upcoding, medical necessity, the whole bit. And I like the ops thing because I mean, imagine that you can bill on a time-based bill to get more from that. So if they weren’t accurately doing that or falsifying time-based records, that’s a problem.

Rory Bellina (08:40):
So the court here jumped in and they partially granted and partially denied the motion to dismiss. The takeaway here is that it found that most claims insufficiently detailed or lacked materiality under the Rule nine B stringent pleading standard for fraud. Specifically, it was too broad of falsifications of the records. And the FCA requires precise detail about the fraudulent actions. So what does that mean for other possible whistleblowers, relators in cases, if they think that there’s wrongdoing in the system that they’re currently working in, it’s not enough to just say, here’s what’s going on. Do you need records? I mean, what is the government saying

Conrad Meyer (09:23):
Here? So that’s a good question because I think,

Rory Bellina (09:24):
And we get this question a lot when people come to us from relat

Conrad Meyer (09:27):
Or

Rory Bellina (09:27):
Potential potential clients that come to us and say, Hey, do I have a case per se?

Conrad Meyer (09:33):
And the answer is, what do the records show? It’s not going to come from your self-serving testimony. So I feel like they almost have to be like a James Bond style insurgent to get records to prove the case. And then is it really, is the juice worth the squeeze? In other words, I mean, how deep does the rabbit hole go? And again, if they get caught doing this, then is it a crime on them? In other words, internally, are they going to, I mean, I

Rory Bellina (10:03):
Don’t know. That’s usually the biggest rub for relaters that want to be whistleblowers, is that they, for them to now meet this court’s requirements to get precise details about the fraudulent actions, that means they need to be copying documents, scanning documents, printing records, all while they’re probably still

Conrad Meyer (10:19):
Employed. Well, one of the things is, and my thing is they ask us, for example, in healthcare, can we print patient records? Is that some HIPAA violation

Rory Bellina (10:30):
And you’re not falling under? Well, I guess we could out of that discussion. There are exceptions to

Conrad Meyer (10:35):
Hipaa, the CPO exception, I mean treatment payment operations. I mean, would this be considered,

Rory Bellina (10:39):
But you building your whistleblower case, is that an exception to HIPAA where you’re printing off records that have been changed when the office administrator’s gone for the day because you’re building this case at home?

Conrad Meyer (10:51):
Well, let me ask you this. I’ve known about the 60 day overpayment rule. I mean, we’re all familiar with that. We hear about that a lot. But is there an affirmative duty if you knew or know or have reason to believe that someone is improperly billing the government for services that maybe are rendered or not rendered or whatever?

Rory Bellina (11:12):
Sure, sure. Okay. But we’re getting sidetracked, but I think this is an important topic, is that where do you tie that into confidentiality? HIPAA requirements, you most likely have some sort of non-disclosure, non-disparagement confidentiality agreement with your practice. I mean, you are skating this fine line between

Conrad Meyer (11:33):
Building, I think what you can redact the patient name, but leave the record in place, right? And use that when you file it because you’re filing an under seal. Anyway,

Rory Bellina (11:43):
What’s interesting is that these two cases that we’ve just gone on, my takeaway is that it’s making it harder for the relators.

Conrad Meyer (11:49):
Oh, I agree.

Rory Bellina (11:50):
And the government wants these cases to come forward because they always brag about how much money they’ve recovered and how effective their agents are. But now you’re telling someone who went to them that had probably valid concerns about this practice on how they were billing. Now you’re saying, yeah, thanks.

Conrad Meyer (12:08):
Wasn’t good enough.

Rory Bellina (12:09):
It wasn’t good enough. And we’re going to throw out your case. Now you’ve probably been fired. Your reputation’s tarnished. You’re never going to work in this city again, everyone thinks you’re a whistleblower

Conrad Meyer (12:18):
Of the three key tams that I’ve filed. And I could tell you right now, one, we settled and the government did intervene and ultimately came up with the settlement. And the other two, the government did not intervene. And then the relators decided they did not want to move forward. But it was interesting, the one that the government did intervene, it was weird. I mean, not weird. It was, you almost need to, I mean, you have to give it to the government on a silver platter,

Rory Bellina (12:49):
The smoking gun.

Conrad Meyer (12:50):
I mean, you have got to give them on a silver platter because

Rory Bellina (12:54):
They’re not interested in investigating.

Conrad Meyer (12:55):
They’re not. Oh, no. I mean, and it makes me wonder, what do you mean you need to have it on a silver? You’re telling me that if we can’t provide you X, you’re, you’re not even interested in trying to look into this.

Rory Bellina (13:06):
And that’s what this case says. That’s exactly what it says. That’s what this case is saying.

Conrad Meyer (13:10):
I mean, in my case, in the one that the government did intervene, but I thought really wasn’t aggressively pursuing it, they did not. I mean, we had patients that because of the schemes that patients were being put in harm’s way and dying.

(13:24):
And I even told the DOJ attorney at the time, I said, so what else needs to happen? How many more patients need to actually die? And they were very nonchalant about it. It was weird. I mean, that would be like me coming to you as a private attorney and saying, look, I like you to look into something thing, and can you maybe do a deal for me? And you tell me, oh, well that’s okay. You need to bring me all the deal documents. You need to give me all the terms. You need to have the contracts laid out. You need to have the due diligence done. And at the very end, if you give me all of that, then I can do the deal. You would never have any business. No. No. Alright, so listen, the third one we have, this is interesting grant on behalf of the United States versus

Rory Bellina (14:09):
Zorn. Okay?

Conrad Meyer (14:10):
Okay. So I should have printed the jurisdiction of these, and I didn’t do that.

Rory Bellina (14:14):
This one That looks like Iowa, but that’s okay.

Conrad Meyer (14:16):
Yeah. So I should have got that. But anyway, you can look all these up online. These are all published cases. So here we got a relator, Steven Grant files, a keam against Steven Zorn, Steven Steven, the Iowa Sleep Disorder Center, and Iowa C Pap, PLLC.

Rory Bellina (14:32):
So similar claims, overbuilding for patient visits, referral schemes, sleep

Conrad Meyer (14:37):
Days. I’ll tell you, these sleep centers, I mean to me, they’re just rife rife with this

Rory Bellina (14:41):
Stuff. So we’ve got a KS and stark allegations here,

Conrad Meyer (14:45):
Which is interesting because most of the time it’s a KS. You rarely see an FCA with a stark issue.

Rory Bellina (14:50):
No, you’re right. You’re right. I mean, you’re right. Retaliatory termination after reporting his practices. Okay, so government does not intervene here. Trial proceeds,

Conrad Meyer (14:59):
District

Rory Bellina (14:59):
Court finds FCA violations impose

Conrad Meyer (15:03):
Trouble damages. There we go, and

Rory Bellina (15:05):
Punitive penalties. So it goes up on appeal. And then the court found insufficient, again, insufficient evidence directly connecting these violations to the claim submitted. So again, this relator makes it past the district court level, has

Conrad Meyer (15:23):
A full blown trial,

Rory Bellina (15:24):
Troubled damage, punitive, punitive penalties. Then we go on appeal and it’s overturned because we don’t have enough sufficient details to substantiate these claims.

Conrad Meyer (15:35):
So then it’s interesting.

Rory Bellina (15:37):
And then it gets worse for him too,

Conrad Meyer (15:38):
Right? Because the trouble damages. You see that That

Rory Bellina (15:40):
Gets gone. That’s gone.

Conrad Meyer (15:41):
Gone. But wait, that’s interesting because we’ve already heard trouble damages on FCA, right? Always. I mean, we talk about C-M-P-F-C-A treble

Rory Bellina (15:47):
Damages. Whenever I go to CLEs, especially the national CLEs, the agents love to talk about their treble damages because that’s their weight. That’s what they scare you with because it’s not always the overpayment that you received or the legal payment. It’s that treble damages of, we paid you a hundred dollars over, you returned the a hundred dollars plus under $300.

Conrad Meyer (16:09):
But look what it said here in Zorn. It said that the court emphasized that the punitive financial sanctions under FCA must be proportionate to the actual harm and statutory objectives,

Rory Bellina (16:20):
Basically. So then there is no trouble damages. Then captive trouble damages is just an arbitrary amount that the government put into

Conrad Meyer (16:27):
Place.

Rory Bellina (16:29):
So they found that treble damages were violated. Again, we’re getting back to constitutional law violated the eighth amendment’s, excessive fines clause.

Conrad Meyer (16:38):
I just

Rory Bellina (16:38):
Like, wow. So these courts are knocking down

Conrad Meyer (16:41):
Gutting FCA,

Rory Bellina (16:42):
Gutting FCA, this poor relator. He also lost his punitive damages due to lack of sufficient malice. So it goes through a full blown trial. He’s awarded punitive damages, and then on appeal, it’s knocked down.

Conrad Meyer (16:56):
And to me, I think that’s interesting because normally on appeal, once a fact finder, be it a judge or a jury makes a determination, the law is clear. You don’t want to disrupt that. Correct.

Rory Bellina (17:08):
Yout want to disturb the jury,

Conrad Meyer (17:09):
Right? Or judge absent error because that judge sat through the trial.

Rory Bellina (17:14):
Correct. You’re reading a record,

Conrad Meyer (17:15):
Right? Right. I mean that judge looking facial expressions, making credibility determinations. So mean

Rory Bellina (17:22):
The first three cases

Conrad Meyer (17:24):
Have not been

Rory Bellina (17:25):
Cut. The Achilles of FCA so far.

Conrad Meyer (17:28):
So let’s go to this one, because the fourth case is something you and I have. It’s the Covid case. Yes,

Rory Bellina (17:32):
The covid, the Love Covid cases.

Conrad Meyer (17:33):
Okay, so this is United States versus Hel F. How do you say that? Elfen bean. El bean. Is it like a Lord of the Rings? El Elfen. Okay, so this is Dr. Ron Elfen. He operated a drive-through COVID-19 testing site during the pandemic and was indicted for allegedly submitting fraudulent billing claims to Medicare. What does this sound

Rory Bellina (17:55):
Familiar? Oh man, he must have submitted a lot of claims.

Conrad Meyer (17:58):
I bet he did

Rory Bellina (17:58):
Drive through,

Conrad Meyer (18:00):
I mean like a Wendy’s for

Rory Bellina (18:01):
Covid. You just roll down your window, tilt your head back, tilt your head back, get a swab, and we’ll call you with the results. He must have been

Conrad Meyer (18:08):
Cashing in.

Rory Bellina (18:09):
I’m curious where this was,

Conrad Meyer (18:10):
Government argued that elfen buying and probably build high level e and M codes. God, for those of you who don’t know, they have what it five levels of e and M. So you have five levels of e and M. And so how in the world do you build a level four or level five, despite providing a drive-through service where you’re literally pulling up nose swab and you drive off? The prosecution claimed these billings were knowingly inflated to greater reimbursements, and the defense maintained that Elba followed telehealth guidelines during the time involving coding standards, blah, blah, blah. So what happened?

Rory Bellina (18:45):
So he asserted a good faith belief that his billing conformed to CMS directives. So he was convicted. Then he files motion for acquittal and motion for new trial. Another reversal finding that the government failed to prove beyond a reasonable doubt that his interpretation of the rules was unreasonable. So again, we’ve got an appellate court overturning the district court in this case. The judge emphasized that medical billing codes are highly technical, agreed and not readily interpretable by lay jurors. So this goes back to what you were just saying. So full blown trial. I’m sure both sides had billing experts that explained what these codes meant, what the guidance was for these different e and M codes. But the appellate court finds that that was not clear enough.

Conrad Meyer (19:33):
So interestingly, the court notes that the judge emphasized that medical billing codes are highly technical and not readily interpretable by lay jurors without expert testimony. I agree with

Rory Bellina (19:43):
That. So was there no expert testimony

Conrad Meyer (19:45):
In this case? No. But that the government’s expert failed to persuasively, persuasively explain why the coding changes or choices were false and unreasonable. And the auditors were not qualified

Rory Bellina (19:55):
To interpret nuance clinical. So maybe at the trial level,

Conrad Meyer (20:00):
They

Rory Bellina (20:00):
Didn’t have the best experts to do it, and it got it overturned. But so now we are four for four on

Conrad Meyer (20:06):
Four for four. So make sure this getting

Rory Bellina (20:08):
Knocked

Conrad Meyer (20:08):
Down, make sure the people are qualified. Okay. Yeah, you want to take the next one?

Rory Bellina (20:12):
All right, let’s look at this next one.

Conrad Meyer (20:14):
Stop. Illinois Healthcare fraud. LLC versus Sayeed. So

Rory Bellina (20:18):
This is an entity that goes after these cases. Now you want to talk about this, Connor, I know that there are, while I prep on this, there are firms that focus solely on going after these whistleblower cases. And I’m curious, is that,

Conrad Meyer (20:32):
Okay? So this is a key TAM targeting aif Sayed and his in-home healthcare company or companies accusing them of orchestrating illegal referral arrangements for nonprofits or with a nonprofit that manage home-based services for seniors. Again, I think senior citizens are the most targeted folks here. Obviously I think they’re Medicare patients, but ED’S companies allegedly paid monthly fees to the nonprofit in exchange for prefer preferential patient referrals. So they pay paying

Rory Bellina (21:04):
For referrals,

Conrad Meyer (21:06):
Paying for referrals, paying for referrals. The government alleged violations of A-K-S-F-C-A. Basically, you can’t pay for referrals.

Rory Bellina (21:12):
All right? This one got upheld. Seventh Circuit upheld that he knowingly and willfully violated a KS. So again, for people that know or don’t know, a KS is not strict liability like the star is a KS. You have, there’s, there’s an intent based factor.

Conrad Meyer (21:25):
Yes.

Rory Bellina (21:25):
So the seventh Circuit found that it was knowingly and willfully violated a S by offering inducements for referrals. They rejected ED’S arguments that the payments fell within a safe harbor, noting that the intent was to obtain referrals. The court found

Conrad Meyer (21:41):
The intent based.

Rory Bellina (21:42):
The court found that the district court failed to distinguish between referrals resulting from the conduct and those arising from lawful processes.

Conrad Meyer (21:50):
This goes back to black letter law. You don’t pay for referrals,

Rory Bellina (21:53):
Don’t pay for referrals,

Conrad Meyer (21:54):
Or don’t have a scheme outside to some sort of scheme or indirect compensation for referrals. All right, so let’s go to the next one. Here we go. Us for Butler versus Shakara. Relators alleged that Dr. L Shakara and his companies operated a field marketing organization that funneled Medicare patients to specific Medicare advantage organizations in exchange for per enrollment commission. So another commission-based referral, right? Have

Rory Bellina (22:23):
You heard of a field marketing organization, an FMO?

Conrad Meyer (22:26):
I have never heard of that.

Rory Bellina (22:27):
No. No, I have never heard of an MOI

Conrad Meyer (22:30):
Feel like we’re getting, I mean, there’s a lot of acronyms in healthcare. I’m

Rory Bellina (22:32):
Going to start using that in FMO. Well, maybe I won’t because this didn’t turn out well for Dr. Shakira.

Conrad Meyer (22:38):
The Medicare Advantage organizations, or Maos, in turn reimburse Shakira’s services at favorable

Rory Bellina (22:44):
Capitation

Conrad Meyer (22:45):
Rates. So the related is further alleged that the company’s transferred high cost patients to avoid losses by cherry picking profitable patients in steering those away like the required.

Rory Bellina (22:57):
So they went through the patients, and if you really needed care, you weren’t going to get it because that would cost the clinic to provide that care. So they went for the people that maybe didn’t need as

Conrad Meyer (23:07):
Much. Well, you know why? Because the Medicare advantage gets, they diver the Medicare, Medicare beneficiaries payment to the organization. So basically, if I cherry pick the patients that don’t need healthcare, I’m losing no money.

Rory Bellina (23:24):
So

Conrad Meyer (23:24):
Basically he looks like he had a windfall from cherry picking the patients that were not sick. And he also got a windfall from paying for referrals to funnel these patients to his MAO. Wow. Alright, so let’s see what happened here. So the court rejects the constitutional challenge to the FCA affirming the validity of the ketan mechanism. Okay, well look at that. See, I guess that’s the thing now.

Rory Bellina (23:46):
Yep.

Conrad Meyer (23:47):
I guess

Rory Bellina (23:48):
That’s the thing. Now. So courts, all these courts, you know what we’re going to do? The next time we have this podcast, we need to have the computer up so we can pull up these for the jurisdiction

Conrad Meyer (23:57):
So we can look at it on

Rory Bellina (23:57):
The screen and look at this, because I’m curious,

Conrad Meyer (23:59):
Especially when we go to live streaming, I mean, we’re doing video, so I like that.

Rory Bellina (24:04):
But I want to pull these up to see where these are physically located, because this court rejected constitutional challenges. So the first one that we talked about, the first two were successful on constitutional challenges. This one not,

Conrad Meyer (24:17):
Yeah, the first one, the appointment closed. This one seems to give the FCA the relator what it deserved, and it looks like. So they held the relators had sufficiently alleged false claims. And under FCA, by certainly kickbacks directly influenced reimbursements, which here they did, they cherrypicked. And the marketing payments were found to plausibly violate a KS. So thus, so again, fruit from the poisonous tree, if you funnel these payments for referrals, then all of the subsequent claims from those illegal referrals are all suspect and false as well. And it demonstrates how referral-based can trigger. Yes, I see that. So interesting case under that. Let’s see what we

Rory Bellina (25:00):
Got here. Let’s see. You got a few more?

Conrad Meyer (25:02):
Yeah, we got a few. We got plenty of time. We got some time. I think we got two more or three more. And I like this. I like whole idea of doing fraud and abuse wrap-ups for current cases. Because you know what? Even though we go to these high level fraud and abuse meetings, I don’t know how, I know they get the hot button cases, but I’ve never seen cases like these. No,

Rory Bellina (25:24):
These two constitutional cases are really interesting.

Conrad Meyer (25:26):
It’s interesting. So let’s see.

Rory Bellina (25:28):
United States xl. Another name Fon Meyer.

Conrad Meyer (25:33):
Fen Meyer

Rory Bellina (25:34):
Versus what? Cameron. Cameron Island Group. All right. So KI alleged that precision lens and its late founder engaged massive kickback scheme targeting ophthalmologists, luxury trips, private flights, expensive entertainment to influence purchasing decisions, which led those physicians to submit claims.

Conrad Meyer (25:52):
Medicare claims, right?

Rory Bellina (25:53):
Medicare claims for procedures involving precision lens products. The government intervenes here. Wow. Claiming a gifts violated a KS, and the claims were then

Conrad Meyer (26:03):
False. This is interesting. Jury

Rory Bellina (26:06):
Verdict.

Conrad Meyer (26:06):
Wow. 43 million award.

Rory Bellina (26:08):
The court ruled that the

Conrad Meyer (26:09):
TRE later treble, look at that.

Rory Bellina (26:12):
Yep. The luxury benefits constituted unlawful remuneration. The court upheld the finding that they knowingly submitted claims that were tainted by the kickbacks. So we have causation and materiality requirement under FCA, which was met. However, the court knocked down the judgment from nearly 500 million. So the 43 plus a three treble from 500 million to approximately 216 eighth Amendment excessive fines clause. So that one came into play again. So is troubled damages going away?

Conrad Meyer (26:45):
Well, I think the problem is, is they do it per claim, right? And you know this, and I know this maybe our listeners, but you’re talking about in some cases, hundreds of claims a day or,

Rory Bellina (26:57):
And each claim is a thousand dollars,

Conrad Meyer (26:58):
And each claim could be a or more depending on the claim. So you’re talking about a massive amount of trouble damages, but it looks like here they reduce it to 216 million. And basically, again,

Rory Bellina (27:11):
So trouble damages is still there as a backstop, unless the court says it’s too much.

Conrad Meyer (27:17):
But even still, I’m trying to even get more basic than that. In this day and age, with all of the press and all of the litigation, you’re still in the sunshine laws. For example, you’re telling me that you’re going to funnel doctors on massive vacations and trips and luxury things. I just, why do you really want to put a target on your back? I don’t get it. I don’t get it. Maybe they think they’re, I don’t know. I they

Rory Bellina (27:44):
Think that they’re not going to catch the governments on the radar. I don’t know.

Conrad Meyer (27:47):
Alright, so let’s hit the next one. So United States Xra Miller versus record Bank Kisser Group. PLC. All right. Rebecca Miller brings a multi-state key tam against a pharmaceutical company and of Suboxone. Suboxone, okay, here we go. She alleges the company manipulated price data to avoid reporting the true best price to CMS,

Rory Bellina (28:09):
Which would reduces the reimbursement of their

Conrad Meyer (28:12):
Medicaid. Yeah. Alleged S scheme allegedly include providing discounts through controlled subsidiaries to avoid triggering lower price obligations. And the later also alleged violation of a KS tied to inappropriate rebates and provider incentives. So let’s see. Court dismissed claims get the UK based parent company due to lack of personal jurisdiction and service defects. However, the court did allow FCA claims against, looks like wreck it.

(28:38):
And what happened here? So it held that there were later had adequately that the misreported best price data coordinated with others in conspiracy to defraud the Medicaid drug rebate program. And they were also allowed to proceed on illegal remuneration schemes. Okay, so there we go. So basically the takeaway from this is pharmaceutical companies are not immune from this. And we know that we’ve seen a lot of SCA claims in pharmacy stuff. So I have, and I’ve seen that inappropriate switching at other, they had one here that was in Louisiana for the involved hospital pharmacy, what you call it? What’s the pharmacy? The drugs they push. It’s their panel pharmacy panel. They were auto switching certain medications in order to get best price. It was interesting. Okay. Alright. You want to take the next

Rory Bellina (29:40):
One? Sure. United Xra L Wheeler versus Acadia Healthcare Company. Oh, this one is this

Conrad Meyer (29:45):
One here.

Rory Bellina (29:46):
I don’t know, Acadia. That’s why we need the monitor in here. So we could look these up. Lisa Wheeler alleged that Acadia Healthcare and its affiliate submitted false claims to Medicaid and other programs by fabricating documentation for groups therapy sessions that never occurred, claiming employees created false patient notes and submitted those for compliance documentation. So this one, I believe they might’ve been under a CIA integrity agreement, which supported the reimbursement alleged. Here it is alleged violations of the corporate integrity agreement with HHS. So they were already under investigation for an And they did again, and she Okay. Agreement

Conrad Meyer (30:24):
Jamie one, Sam on Wright. I mean, really

Rory Bellina (30:26):
False Claims Act except Fourth Circuit. Okay. Okay. Fourth Circuit reversed the district courts dismissal and found that she sufficiently alleged all the required elements of FCA liability. The court upheld that the creation of the documentation was both material to reimbursement and submitted. The fourth Circuit panel also recognized for the first time that stipulated penalties under A CIA could constitute a financial obligation under reverse false claims provision. That’s interesting. So they were already under the CIA and continued the actions.

Conrad Meyer (31:01):
Are you kidding? Wow. I mean, how you’re already being

Rory Bellina (31:07):
Watched, right? You have to submit all these reports. I’ve worked on numerous CA matters and they’re not fun. It’s a lot of work, a lot of administrative work, and you have to submit these reports to an outside firm. The SF firm has done this, then submit ’em to the government and you’re still doing it.

Conrad Meyer (31:24):
So what’s the takeaway from, we look at all these cases, Rory, what is the takeaway here?

Rory Bellina (31:28):
Well, I think the big things that I’m seeing is that if I’m defense counsel for any of these practices, I’m brushing up on constitutional law because that was really interesting. That’s my takeaway from these two things is that excessively fines clause is very interesting because even if you’re guilty per se, and you did submit these and you get hit with treble damages, you could save your client some money. So I’m really looking at that closely. The other big takeaway is kind of like you said, that the government with its vast amount of resources and personnel, unless your case is teed up on a silver platter with documentation, you might not get there. You can’t just call the OIG G and say, Hey, I think this practice down the street is doing this.

Conrad Meyer (32:13):
And you better have the right experts.

Rory Bellina (32:15):
You better have the right experts, all the documentation and really have an airtight case.

Conrad Meyer (32:21):
Now, on the flip side, if I’m related counsel, I’m thinking of the same thing. I better have specificity. I better have materiality, I better have details. I better have the supporting evidence.

Rory Bellina (32:32):
It’s not enough to just call in your client as the practice manager and say, here’s what was going on. You need documents, lots

Conrad Meyer (32:39):
Of them. And then you got to tell those relators too that look, if the government intervenes, you need to be prepared if you want to move forward to fund that case or at least fund the cost of those cases. And they’re not cheap.

Rory Bellina (32:50):
No, and I think briefly, Conrad, for your three, if you want to just tell our listeners what’s the recovery look like for the relators?

Conrad Meyer (32:59):
So you’re looking at, I want to say up to 20% if they intervene, but you never get 20%. No, you never get it. I mean, that’s what the law says, but you never get it. You’re lucky. I mean, you have to be over the top to get 15%. So you’re looking at an average of 10%, I believe, on an intervention claim when you don’t intervene. And I forget this, I should know this off the top of my head, but I don’t, I forgot the percentage of what it is When they don’t intervene and you pursue anyway, I know it’s higher. I want to say it’s a third, but I’m not a hundred percent

Rory Bellina (33:33):
Sure. I think it is a third. But you are then having to hire counsel that maybe is taking this on contingency, but you’re going to have all these calls associates, so that counsel is really going to want to make sure that the case is rock solid. Absolutely. Absolutely. And the relator has to be comfortable with your name’s going to be in the paper. It’s going to be on all these national websites. Yes, they are. Is your reputation, although you did nothing wrong and you’re doing the right thing by bringing this to the government’s attention, are you going to be the black sheep now and never get hired anywhere in the healthcare field?

Conrad Meyer (34:04):
Because I don’t know if that would never get hired because I’ve seen people get hired that have been relators. I mean, they’re still in healthcare, so I don’t know if you’re black. And that could go both ways because you might have some people that say, look, hey, I like someone who wants to keep an eye on. So I don’t know if they’re really blackballed, because to me, I think weeding out bad actors, especially in healthcare, I think most healthcare administrators would say, we don’t want to run the foul of that week.

Rory Bellina (34:32):
That’s true.

Conrad Meyer (34:32):
They want to walk the line.

Rory Bellina (34:33):
But if you’re a practice that you think is very close to the line, you’re not going to want to bring in the hire later to that

Conrad Meyer (34:39):
Person. Right? You’re right. So hey, if you want to walk that line, get ready to get bit.

Rory Bellina (34:44):
Yeah, be prepared for it.

Conrad Meyer (34:46):
We’re going to do this again, and I think we’re going to come up with some more cases. I like this sort of an annual fraud and abuse thing. We should create our, this would be an annual type thing for us. This

Rory Bellina (34:54):
Is a good one. I want to do one. We talk so much about a KS, something that’s not talked about a lot, it just doesn’t come up as much as it used to, is Stark. I’d love to do one that’s focused on Stark because that’s a completely different strict liability, no intent requirement. But I’d love to look at some of these stark cases.

Conrad Meyer (35:13):
And we get a lot of questions that a lot of times from doctors we do. And I think that would be a good thing to do,

Rory Bellina (35:19):
Right? Because all these besides one, were a KS,

Conrad Meyer (35:21):
We a little, we got to make it. We can’t make it dry. The problem is when you go into these regs and you listen to this stuff, it starts boring. It is dry. And I tell the law students that all the time, my guys, it’s going to be dry. So I try to make hypothet fun but real so that they have interest. So we could absolutely do that. I think that’d be fun.

Rory Bellina (35:40):
Yep. Alright.

Conrad Meyer (35:40):
Look forward. Well look, everyone, thank you for joining us for another episode of Health Law Talk. Again, rate us, give us that good rating. Email us if you have any questions. If you want us to do a certain topic that you’d like, send us an email. We’d love to hear from you. Thank you much. Have a great day. Enjoy the week.

Introduction (36:07):
Thanks for listening to this episode of Health Law Talk, presented by Chehardy Sherman Williams. Please be sure to subscribe to our channel. Make sure to give us that five star rating and share with your friends. Chehardy Sherman Williams is providing this podcast as a public service. This podcast is for educational purposes only. This podcast does not constitute legal advice, nor does this podcast establish an attorney-client relationship. Reference to any specific product or entity does not count as an endorsement or recommendation by Chehardy Sherman Williams. The views expressed by guests on the show are their own, and their appearance does not imply an endorsement of them or their entity that they represent. Remember, please consult an attorney for your specific legal issues.