Health Law Scan

The Biden administration recently announced its much-anticipated proposed rule for implementing a minimum staffing “floor” for nursing homes in the United States and further launched a nursing home accountability initiative. These efforts are seismic for the long-term care nursing home community and will bring new challenges and scrutiny to a health industry sector battered with healthcare personnel shortages, pandemic recovery obstacles, changing reimbursement models, and regulatory scrutiny.

As we at Morgan Lewis pride ourselves on excellent client service, we feel it is our duty to provide critical dispatches from the romantic world of healthcare fraud. Specifically, we want to highlight developments in the District of Massachusetts that may make the prospects of an amicable breakup in a federal civil False Claims Act (FCA) case with Boston federal prosecutors more remote.

The new Civil Cyber-Fraud Initiative of the US Department of Justice’s use of the punitive False Claims Act (FCA) and its whistleblower provisions has some important legal and risk management considerations for the health industry. Because enforcement will initially occur largely through civil investigations applying the FCA in the broadest possible way, healthcare organizations should undertake a priority assessment of their cybersecurity status to ensure that their practices can withstand hacks, whistleblowers, and government scrutiny.

Last month, we had an engaging Fast Break session covering compliance topics regarding healthcare professionals’ relationships with pharmaceutical and medical device manufacturers. We were joined by Terrence Burek, senior counsel, neurology & immunology at EMD Serono, and Morgan Lewis partner Scott Memmott, who highlighted specific compliance risk areas for healthcare professionals (HCPs), as well as permissible interactions with pharmaceutical and medical device manufacturers and contracting/risk mitigation best practices.

We hope you were able to join us for our July Fast Break on the US Court of Appeals for the Fourth Circuit's recently affirmed $114 million judgment in United States v. Mallory. If not, you missed a great session, featuring Katie McDermott and Howard Young analyzing this protracted suit filed under the qui tam provisions of the False Claims Act (FCA) against the owners of two specialty clinical laboratories and a contracted sales and marketing company.

In the Care Alternatives False Claims Act (FCA) appeal, a panel of the US Court of Appeals for the Third Circuit on March 4 reversed the summary judgment granted to hospice provider Care Alternatives at the district court, disagreeing with AseraCare precedent out of the US Court of Appeals for the Eleventh Circuit, and holding that clinical disagreement alone may comprise legal falsity and is sufficient to create a triable issue of fact for the jury.

In an action especially significant to hospice providers but also other healthcare providers regarding the determinations of medical necessity for Medicare billing purposes, the US Department of Justice (DOJ) and AseraCare have just agreed, following a mediation, to settle for $1 million the long-running False Claims Act qui tam litigation matter in which the United States had previously sought $200 million in liability.

In this LawFlash, our white collar litigation and government investigations team unpacks the fiscal year 2019 False Claims Act (FCA) recovery statistics recently announced by the US Department of Justice.

In a recent analysis for Today’s General Counsel, healthcare industry partner Katie McDermott analyzes the US Court of Appeals for the Eleventh Circuit’s decision in United States v. AseraCare, Inc. and offers key takeaways for False Claims Act (FCA) practitioners from “this reasoned and scholarly opinion.”