Anti-Kick Back Qui Tam Cases

Statutes from Federal health care programs like Medicare and Medicaid prevent pharmaceutical manufacturers, physicians, pharmacists, and other healthcare professionals from offering or receiving anything of value in return for the referral of Medicare and Medicaid patients or the ordering of any goods or services. These incentives or kickbacks can be in violation of the Anti-Kickback Statute (“AKS”), which would lead to False Claims Act (“FCA”) liability under the implied false certification theory. When submitting a claim for reimbursement for Medicare of Medicaid services, a healthcare provider impliedly certifies that they have not violated any designated health services statutes and regulations, including the Federal Anti-Kickback Statute. Violating the AKS may, depending on the jurisdiction, be sufficient to trigger FCA liability. Many times, the healthcare provider actually provides the services for which it billed Medicare.

However, the courts have held that the federal government or relator does not have to demonstrate actual damages to state a claim under the FCA. These health care services are considered tainted by the fraud, and therefore the reimbursement claims are considered false. In addition to showing the elements of a FCA violation, a qui tam whistleblower must also demonstrate the elements of an AKS violation: 1) remuneration was made by the healthcare provider; and 2) such payment was made as an inducement to refer Medicare patients or to order goods or services reimbursable by Medicare.

The recent growth of pharmacy benefit management companies (PBMs) in the healthcare industry has shifted much attention to anti-kickback regulations. PBMs offer a wide range of services to prescription drug manufacturers. PBMs manage prescription drug benefits for healthcare plans by providing services such as mail order prescription drugs to plan beneficiaries, administrative services, and rebate and discount negotiations with drug manufacturers. When a PBM negotiates price discounts, disease management programs, and rebates with drug manufacturers on behalf of health plans, it must not solicit or accept improper payments from manufacturers in return for favoring particular drugs.

Furthermore, when a healthcare provider acquires a medical practice in violation of the AKS and then submits reimbursement claims to Medicare for payment, the hospital may be liable under the FCA for submitting false claims. In order for a healthcare provider to acquire a medical practice and not violate the AKS, the provider must pay fair market value for the practice’s assets. Suppose the qui tam whistleblower can plead that the provider paid an unreasonably high amount for the medical practice in an effort to induce the doctor to make future referrals to the provider. In that case, the provider may be liable under the FCA.

For more information and case citations, please see “Federal False Claims Act and Qui Tam Litigation,” published by Law Journal Press (2010).

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You should be aware that qui tam claims are subject to a Statute of Limitations. The area of limitations periods is complex. There are also first to file rules, public disclosure bars, original source issues, and varying limitations in pursuing retaliation claims. If you wish to pursue your claims, you should promptly seek the opinion of an attorney regarding the merits of your qui tam claim and the applicable statute of limitations.