8 years of illegal kickbacks costs Hospice Plus $12M

A group of hospices owned by Curo Health Services and operating under the Hospice Plus brand agreed to pay over $12 million to resolve allegations that they paid kickbacks in exchange for patient referrals in violation of the False Claims Act (31 U.S.C. §3729). The scheme came to light after several whistleblowers filed qui tam lawsuits on behalf of the United States, consolidated as U.S. ex rel. Capshaw v. White. The United States had previously partially intervened in the lawsuit against the corporate defendants for purpose of settlement; the suit remains pending against two former Curo executives, and the United States requested permission to intervene in the remainder.

Kickbacks were allegedly paid to (1) American Physician Housecalls, a physician house call company in the form of sham loans, free equity interest in another entity, stock dividends, and free rental space; and (2) to medical providers, including doctors and nurses, in the form of cash, gift cards, and other valuable items. According to the consolidated whistleblower complaints, the house call company allegedly received kickbacks from 2007 through 2012, while providers allegedly received payments from 2007 through 2014.

The involved hospices primarily operate in and around Dallas, Texas, and were first known as Hospice Plus, Goodwin Hospice, and Phoenix Hospice. The three companies were purchased by Curo Health Services in 2010 and consolidated under the Hospice Plus brand.

FDA opens toolbox for imported food oversight

The FDA is relying on “a range of tools” to ensure the safety of imported foods, in keeping with directives under the FDA Food Safety Modernization Act (FSMA). Because 15 percent of the Food supply is imported, the FDA has developed “a multi-faceted toolkit” to help ensure the safety of imported food. To meet food safety oversight demands, the FDA is allocating resources based upon risk, leveraging the work of other responsible entities in the food supply chain, and combining FSMA tools with existing methods (inspections, physical examinations, sampling/testing).

Food supply

According to the FDA, about 15 percent of the U.S. food supply is imported. However, some aspects of the food supply are predominantly supplied through imports. For example, nearly 50 percent of fresh fruit, 20 percent of fresh vegetables, and 80 percent of seafood are derived from imports. Food supply imports come from more than 200 countries and around 125,000 firms.

Oversight

Dr. Donald Prater, Acting Assistant Commissioner for Food Safety Integration in the Office of Foods and Veterinary Medicine (FVM), noted that under changing oversight protocols, while the level of oversight will be comparable across the food supply chain, “the deployment of the tools may be different.” For example, he noted the requirement that importers verify their suppliers produce food consistent with U.S. food safety standards. He indicated that the goal of imported food safety oversight was not to establish the same system of oversight for domestic and imported foods, but, instead, “to ensure that foods imported from abroad are as safe as those produced domestically.”

Trump administration disperses $485M in opioid fight

The Trump Administration announced $485 million in grants to assist states with combating opioid addiction. The funding is the first part in two rounds of opioid-focused state grants provided for by the 21st Century Cures Act (Cures Act) (P.L. 114-255). The funds will be administered by the Substance Abuse and Mental Health Services Administration (SAMHSA).

The funding will be received by all 50 states, the District of Columbia, American Samoa, Micronesia, Northern Marianas, Palau, Puerto Rico, and the Virgin Islands. The allocation of the $485 million was determined according to need. The largest grants were awarded to states with the highest rates of overdose deaths and unmet need for opioid addiction treatment. Some of the highest awarded states include: California ($44,749,771), Florida ($27,150,403), Ohio ($26,060,502), Pennsylvania ($26,507,559), and Texas ($27,362,357).

In a letter to governors, HHS Secretary Price called the opioid crisis alarming, noting that “opioids were responsible for over 33,000 deaths in 2015.” He also admonished governors that “we cannot continue to lose our nation’s citizens to addiction.” Price cautioned that “while I am releasing the funding for the first year immediately, my intention for the second year is to develop funding allocations and policies that are the most clinically sound, effective and efficient.”

Webinar provides multiple perspectives on FCA cases

To avoid federal False Claims Act (FCA) (31 U.S.C. §3729 et seq.) liability, providers should implement an effective compliance program, stay ahead of the government’s investigation of possible FCA violations, and fix problems first. In a Health Care Compliance Association (HCCA) webinar entitled, “False Claims Act Cases—Perspectives from Both Sides of the Aisle,” Rachel V. Rose, principal at Rachel V. Rose—Attorney at Law, PLLC, and Sean McKenna, shareholder at Greenberg Traurig LLP, provided an overview of the process for filing federal FCA complaints and how to respond to investigations and lawsuits under the FCA.

Complaints

Qui tam relators file their complaints under seal, on behalf of the government. The Department of Justice (DOJ) has 60 days to investigate and decide whether to intervene, which happens only about 10 percent of the time. Even then, the government will prosecute only the strongest aspects of the case. The presenters warned that relators should use “an abundance of caution” when discussing an FCA case or the underlying allegations with anyone other than the whistleblower’s attorney or the government agents assigned to the case, as “breaking the seal” can result in dismissal or sanctions.

False claims

The type of false claim that most frequently leads to FCA liability is a claim for services not provided. Other categories of false claims include legally false claims (express), legally false claims by implied certification, and reverse false claims. In United Health Services, Inc. v. United States ex rel. Escobar, (2016), the U.S. Supreme Court upheld the implied certification theory and relied on whether the claim was material to payment, what McKenna called a “groundbreaking approach” (see Implied certification liability confirmed, limited to material compliance violations, Health Law Daily, June 16, 2016).

Since November 2, 2015, the range of penalties for violating the FCA increased from $5,500-$11,000 to $10,781-$21,562, plus treble damages and the relator’s attorney fees. FCA violations can also lead to exclusion, “the death penalty for health care providers.” Exclusion applies only to conduct from the past 10 years (42 C.F.R. Sec. 1001.901(c); see HHS OIG’s exclusion authority loosens, allows more discretion, Health Law Daily, January 12, 2017).

In parallel proceedings, simultaneous civil/criminal/administrative investigation of the same defendants occurs. It can be federal and state/local or multi-district. Not every case is appropriate for parallel proceedings, however. Examples of common parallel matters include procurement and government program fraud, health care fraud, internet pharmacies, and antitrust investigations.

Yates memo

The past several years in health care fraud and abuse prosecutions have seen an increased focus on individual actors such as executives, as reflected in a September 9, 2015 memo from former acting attorney general Sally Yates, known as the “Yates Memo.” The Memo emphasized the DOJ’s commitment to combat fraud “by individuals” and recommended that: (1) to qualify for a cooperation credit, a corporation must provide facts relating to the individuals responsible for the misconduct; (2) investigations should focus on individuals from the inception of the investigation; (3) culpable individuals should not be released from liability absent extraordinary circumstances; and (4) DOJ attorneys should not resolve matters with a corporation without a clear plan to resolve related individual case.

Best practices

If an FCA investigation occurs, providers should evaluate all liability (civil, criminal, administrative, state, licensure, and private), determine if anyone needs separate counsel or has talked to the government, preserve documents, and compile the right team, including consultants, billing and coding experts, and statisticians.