Session moderated by John T. Boese, Counsel, Fried Frank Harris Shriver & Jacobson LLP; Michael Granston, Director, Commercial Litigation Branch, Fraud Section, Civil Division, US Department of Justice; Gary W. Eiland, Partner, King & Spalding LLP; Michael A. Morse, Partner, Pietragallo Gordon Alfano Bosick & Raspanti, LLP
April 19, 2015
The first session I attended was moderated by four attorneys and it was about current developments with the False Claims Act. If you're a frequent reader of our blog and other MD Ranger publications, you're aware that the FCA has come into the spotlight within the healthcare industry given that it is now invoked in some Stark and AKS violations.
The first thing that was discussed was how are the cases investigated and the typical process of these investigations. Since most of the audience were hospital compliance executives, they were curious to hear about what it's like to go through these types of whistleblower cases. As you'd suspect, the vast majority are settled and never see a courtroom; however, it might be resolved after quite a lengthy investigation. During the investigation and information gathering stage, the hospital still should expect to have a lot of interaction with the DOJ.
These Qui Tam lawsuits are typically filed under seal by the whistleblower. The complaint is not served on the defendant before the government reviews it. Then, DOJ has to decide whether or not it's going to pick it up themselves. Thus, the defendant doesn't really know where the lawsuit is coming from; or they might not even know it's going on. Obviously, this is concerning for many healthcare compliance professionals.
Sometimes, however, there's a good reason to disclose the lawsuit to the defendant. For example, there could be a backstory about the whistleblower himself/herself that could be helpful (ie, knowing the source and the backstory of the allegations).
To establish whether or not the conduct was against the law and move forward, the next step is to approach the subject of the investigation. This commences by requesting documents voluntarily or by subpoena. Then, DOJ works with the subject to see if there's resolution before a lawsuit is filed.
An interesting legal debate is what does a claim needs in order to be false. This is because "falsity" is not defined within the statute. In fact, the most controversy surrounds situations where you've provided a service but you've failed to comply with another statute (like AKS or Stark). So, in the course of providing goods or services to the government you don't defraud them with the actual service, you end up violating an ancillary law and thus the claim is false.
Damages are most of the focus of FCA discussions. The law stipulates three times the amount of damages the government sustains plus civil claims. As you'd suspect, the devil is in the details. What claims count? How do you quantify these claims? It's often a debate that happens between defense and DOJ because there are so many ways to calculate these damages.
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