July 10, 2013
$5 Billion! That’s the approximate amount recovered by the federal government from settlements and judgments in cases filed under the federal False Claims Act, 31 U.S.C. §§ 3729-3733 (the “FCA” or the “Act”), in 2012.[1] More than 782 new FCA matters were filed in that year, and more than 640 of those were initiated by “whistleblowers” filing suit under the FCA’s qui tam provisions[2]–which provide for generous rewards of up 30% of the total recovery for those who file FCA suits on the government’s behalf.[3] “Record-breaking” FCA settlements in a variety of industries, including healthcare, financial industries, aerospace, and education, are virtually a daily occurrence, and courts continue to adopt theories of FCA liability that push it to the absolute outer bounds–if not far beyond–the original intent of what was once called “Lincoln’s Law,” meant to halt and punish traditional fraud against the government.
And not surprisingly (given our prediction at the end of 2012), this trend has continued in the first half of 2013. Legislation, especially at the state level, has continued at a frantic pace, with states enacting their own “mini-FCAs” to meet federal government conditions on their receipt of certain federal funds and to enhance their own ability to prosecute the ever-expanding universe of what investigators choose to characterize as “fraud against the government.” FCA settlements and judgments pour in, with the largest recent recovery being a $664 million judgment against a defendant for allegedly misrepresenting in a price proposal how pricing to the government would be calculated.[4] And the trend in judicial decisions continues to favor the government and qui tam whistleblowers, expanding the theories and scope of what is actionable under the FCA.
As in years past, this mid-year alert first discusses legislative activity that occurred in connection with the federal FCA and states’ “mini-FCAs” during the first half of 2013. Next, we discuss important FCA judgments and settlements that have occurred during the first half of this year. And finally, we discuss important case law developments that have occurred during the last six months. A collection of Gibson Dunn’s recent publications on the FCA, including more in-depth discussions of the FCA’s framework and operation along with practical guidance to help companies avoid or limit liability under the FCA, may be found on our Website.
A. Federal Activity
Most of the FCA legislative activity in the first six months of 2013 occurred at the state level. However, there have been a number of substantial developments with respect to rules and regulations governing the health care industry that bear on potential FCA exposure. As noted in our 2012 Year-End False Claims Act Update, the health care industry has continued to be one of the primary targets for FCA litigation, with a record-breaking $3 billion in FCA settlements and judgments coming from that industry in 2012 alone.[5] Among the important developments over the first six months of 2013 are the following:
B. State Activity
As mentioned, the bulk of FCA legislative activity during the last year has occurred at the state level. Indeed the 2005 Federal Deficit Reduction Act (DRA), 42 U.S.C. § 1396(h), included a financial incentive designed to prompt states to adopt false claims act provisions “at least as effective as” the federal FCA in combatting false or fraudulent Medicaid claims. The DRA allows states that enact such laws, as judged by HHS OIG, to collect an additional 10 percent of any federal Medicaid funds recovered through a state action. With new revisions under the PPACA, the Fraud Enforcement and Recovery Act of 2009, and the Dodd-Frank Wall Street Reform and Consumer Protection Act, OIG also provided a two-year grace period during which states with false claims acts that OIG previously approved could continue to receive the incentive. For two states, that grace period ended on March 31, 2013; for nine others it ends on August 31, 2013.[16] In our 2012 updates, we noted a flurry of activity around the expiration of the grace period for a number of states seeking to preserve the financial incentive to comply with the DRA. That trend has continued in 2013.
Four states and the District of Columbia recently enacted new false claims laws:
There has been other activity at the state level as well. During the first half of 2013, a number of state lawmakers introduced bills to enact or expand false claims laws, which bills remain in various stages of the legislative process. These efforts include proposed amendments from four states whose laws OIG deemed not to meet the DRA requirements – Rhode Island (H.B. 5493), Colorado (S.B. 205), Michigan (H.B. 4010), and New Mexico (S.B. 153) – and five states in which new false claims laws have been proposed – Pennsylvania (H.B. 1493), South Carolina (S.B. 73), Mississippi (H.B. 1436), Alabama (S.B. 183), and Wyoming (S.F. 83). In previous updates we reported amendments by Georgia and Tennessee to bring their false claims laws in line with DRA incentive guidelines.[25] However, OIG has informed these states that their laws do not qualify for the incentive because they have a more limited scope of liability and less effective qui tam provisions than the federal FCA.[26] Tennessee is now considering legislation to address these issues,[27] and Georgia is expected to do the same before the August 31, 2013 expiration of its grace period.
We anticipate this slew of state-level FCA activity will continue during the second half of 2013. Additionally, we expect to see increased activity by state authorities and prosecutors taking advantage of these new laws and expanding their enforcement efforts in areas where public funds are used. In Massachusetts, for instance, state Attorney General Martha Coakley recently signaled the state’s interest in bringing enforcement actions against for-profit schools whose students receive federal funds, comparing them to the mortgage lenders that have been subject to greatly increased scrutiny since the subprime crisis.[28] Such statements are a harbinger of action to come across the country, as local authorities attempt to increase their use of local false claims laws and also coordinate their efforts across states.
The government’s pace of recovery has not slowed during the first half of 2013 and a number of significant resolutions were announced during this period. Among others, DOJ announced a $500 million criminal and civil settlement ($350 million of which represented FCA damages) to resolve allegations involving manufacturing practices by a generic drug manufacturer. The first half of 2013 also saw the government’s largest recovery to date in an FCA case taken to trial, as well as one of the largest payments by an individual to resolve FCA claims. We discuss these settlements and judgments by industry below.
A. Health Care
As we have stated in prior alerts, health care matters have been the primary driver behind the government’s massive FCA recoveries in recent years: since January 2009, the government has recovered more than $10.4 billion under the FCA in health care cases.[29] 2013 will not be an exception to that trend. In fiscal year 2012, DOJ opened 885 new civil health care fraud investigations and had 1,023 civil health care fraud matters pending at the end of the fiscal year.[30] Notable settlements and judgments in this area during the last six months include:
B. Procurement and Defense
Notable 2013 settlements and judgments in the most traditional form of FCA cases, relating to the government’s procurement of goods, include:
C. Other
As we described before, and as noted above, the government and qui tam relators use the FCA to combat fraud in virtually every government program, including banking/financial services and education. Other notable settlements during the first half of 2013 include:
There were a number of interesting case law developments during the first half of 2013. These are discussed below.
A. Do Alleged Violations of Conditions of Participation in Government Programs Provide the Basis for an FCA Case?
The question of what types of alleged violations of the law may provide the basis for an FCA case has become one of the most frequently litigated issues in recent FCA cases. While relators and the government sometimes argue broadly that violations of any “condition of participation” in a government program (i.e., those things a government contractor agrees to do when asking to participate in a government program) can provide the basis for an FCA case, defendants argue that liability under the FCA must be more narrow and should be limited to material violations of those rules that are actually identified in the law or elsewhere as conditions on the government’s payment decision under the program. In United States ex rel. Hobbs v. MedQuest Assocs., 711 F.3d 707, 709 (6th Cir. 2013), the government alleged that the defendant violated the FCA by falsely certifying compliance with certain Medicare regulations and using an old billing number on payment forms. The Sixth Circuit found that, at least in the Medicare context, the FCA requires a showing that the regulation violated was a condition of payment, “meaning that the government would not have paid the claim had it known the provider was not in compliance.” Id. at 714. The Hobbs court found that the regulations identified by the relator could not provide the basis for an FCA case because the regulations were “conditions of participation.” Id. This case provides the latest salvo in the long-waging battle of whether conditions of participation alone can somehow provide the basis for an FCA case. In this matter, when it comes to the Medicare program, the Sixth Circuit found that they cannot.
B. How Are Treble Damages Calculated?
Another often debated issue in FCA cases is how treble damages under the FCA should be calculated: before or after the benefit to the government from the services or goods involved are discounted? In other words, should the court take the damages to the government, discount those damages by the value of what the government received, and then treble the resulting amount? Or should the discounting occur after trebling the government’s damages (without any discount being accounted for first)? This obviously can make a huge difference to the potential damages in any FCA case. Imagine, for instance, a contractor with a $100 million contract, where that contractor provided services that valued $90 million. If the first approach is taken, potential damages after trebling are $30 million ($100 million, minus $90 million, trebled). If the second approach is taken, potential damages are $210 million ($100 million, trebled, minus $90 million).
In United States v. Anchor Mortg. Corp., 711 F.3d 745, 748-49 (7th Cir. 2013), the Seventh Circuit took the former approach, siding with the defendant’s “net trebling” method rather than the government’s “gross trebling” method, finding that the amount that the government had recovered from its losses should be subtracted from the government’s damages before trebling occurred. Id. at 749. The court stated that given that “the norm is net trebling” and “mitigation of damages is almost universal” the “net trebling” method is appropriate in this case. Id. In its argument for “gross trebling,” the government relied on the Supreme Court’s decision in United States v. Bornstein, 423 U.S. 303 (1976), which doubled damages from a breach of contract claim before subtracting a subsequent mitigating payment from a third party. The Anchor court found Bornstein inapplicable, noting that “[a]ppellate decisions since Bornstein generally use a net trebling approach” and pointing to footnote 13 in Bornstein which “unambiguously uses the contract measure of loss, supporting a net trebling approach.” Id. at 750.
Anchor is a good case for defendants arguing that trebling should occur only after subtracting the benefit to the government from the government’s damages.
C. Developments Related to the “First-To-File” Bar
The first-to-file bar of the FCA, 31 U.S.C. § 3730(b)(5), prevents a qui tam relator from filing a related action that is based on the facts underlying a pending action under the FCA. The idea is that the subsequent action duplicates the relief sought on the government’s behalf, and therefore is not needed and is wasteful. During the first half of 2013, there have been two significant developments in the case law relating to this important provision.
First, in United States ex rel. Carter v. Halliburton Co., 710 F.3d 171 (4th Cir. 2013), the court found that although the first-to-file bar requires the dismissal of a qui tam relator’s complaint that is based upon a pending action under the FCA, that dismissal should only be without prejudice. Id. at 183. The court reasoned that once the earlier-filed action is no longer “pending” under the FCA, the relator should be free to refile his suit. Id. at 181. Granted, the relator’s complaint may face other hurdles, but the Fourth Circuit found that the first-to-file provision should not be one of them.
Second, in United States ex rel. Heineman-Guta v. Guidant Corp., No. 12-1867, 2013 U.S. App. LEXIS 11017, at *2 (1st Cir. May 31, 2013), the First Circuit weighed in on the debate over whether an earlier-filed lawsuit can serve to bar a later suit under the first-to-file bar even if the complaint in that earlier lawsuit fails (or appears to fail) to satisfy the requirements of Rule 9(b). The First Circuit found that it could. Id. at *23-25. The First Circuit justified this decision by relying on the different purposes of Rule 9(b) and the first-to-file bar, noting that the first-to-file bar is intended to incentivize relators to give the government prompt notice of the “essential facts of a fraudulent scheme,” id. at *15 (quoting United States ex rel. Duxbury v. Ortho Biotech Prods., L.P., 579 F.3d 13, 32 (1st Cir. 2009)), while Rule 9(b) aims to protect defendants from baseless claims. Id. at *22. Therefore, the purpose of the first-to-file bar is furthered even if a previously-filed complaint does not satisfy Rule 9(b), as long as the complaint provides “the essential facts to give the government sufficient notice to initiate an investigation into allegedly fraudulent practices.” Id. at *25.
D. Can an FCA Defendant’s Self-Disclosure Create a “Public Disclosure” Potentially Barring Later Qui Tam Actions?
In addition to the first-to-file bar, the so-called public disclosure bar of the FCA, 31 U.S.C. § 3730(e)(4), provides another important defense to defendants. This provision precludes a qui tam relator from bringing a case based upon allegations that already have been publicly disclosed in certain forums, unless the relator can show he or she is an “original source” under the FCA. This raises the question: can a defendant create a “public disclosure” that triggers this bar?
In United States ex rel. Estate of Cunningham v. Millennium Labs. of Cal., 713 F.3d 662 (1st Cir. 2013), the First Circuit found that the answer to this question may be “yes”–an FCA defendant’s self-disclosure of an alleged fraud may bar a subsequent FCA claim under the public disclosure doctrine. In Cunningham, the public disclosure occurred by the defendant publicly filing a complaint against the relator’s employer, a competitor of the defendant–prior to the relator filing the qui tam complaint. Id. at 671-75. This complaint by the defendant against the relator’s employer attached e-mails suggesting the fraudulent activity later alleged in the relator’s qui tam complaint and also described the alleged activity. Id. The court found that this public disclosure of the alleged fraud–although made by the defendant–could constitute a public disclosure under the FCA for purposes of triggering the public disclosure bar. The court further stated: “While we share Relator’s concern that a person or entity committing fraud against the government could theoretically shield itself from a qui tam action through preemptively filing its own action, thus creating a sanitized public disclosure while barring a future whistleblower action, the Supreme Court has been clear that self-disclosure can bar such suit under the FCA, and it has further characterized concerns about insulation from FCA liability as unwarranted in most cases.” Id. at 672.
This decision only adds to the very careful and critical analyses that parties must undergo when they discover evidence of potential fraud. Among other considerations specifically under the FCA is the fact that even if there was a public disclosure of the allegations at issue in the case, a relator can still move forward if he or she can show that he or she is an “original source” under the FCA. Further, the public disclosure bar does not protect against actions by the government. And, finally, the First Circuit earlier held in United States ex rel. Rost v. Pfizer, Inc., 507 F.3d 720 (1st Cir. 2007) that self-disclosure to the government does not in and of itself count as a “public disclosure” under the FCA; so, even in the First Circuit, if a defendant desires to create a “public disclosure” under the rule outlined in Cunningham, it can do so only even possibly through one of the ways enumerated by the FCA.[59]
E. What Level of Pleading Is Required in an FCA Case and How Does That Affect Discovery?
It is now beyond dispute that Federal Rule of Civil Procedure 9(b)–requiring particularity of pleading–applies to FCA cases. But a substantial difference of opinion among the courts remains as to what this means. In United States ex rel. Nathan v. Takeda Pharms. N. Am., Inc., 707 F.3d 451, 454 (4th Cir. 2013), the Fourth Circuit addressed Rule 9(b)’s application to FCA claims and affirmed dismissal of a relator’s amended complaint for failing to allege with particularity that the defendant presented false claims to the government. The court held “that when a defendant’s actions, as alleged and as reasonably inferred from the allegations, could have led, but need not necessarily have led, to the submission of false claims, a relator must allege with particularity that specific false claims actually were presented to the government for payment.” Id. at 457.
Recent developments in the Fifth Circuit also reflect the ongoing dialogue and debate, even within the same circuit. In United States ex rel. Nunnally v. W. Calcasieu Cameron Hosp., No. 12-30656, 2013 U.S. App. LEXIS 6733 at *12-13 (5th Cir. Apr. 3, 2013), the Fifth Circuit claimed to clarify and reaffirm its previous holding in United States ex rel. Grubbs v. Kanneganti, 565 F.3d 180 (5th Cir. 2009) as to the application of Rule 9(b). While Grubbs held that a relator may satisfy Rule 9(b) without including details regarding every alleged false claim, Nunnally addressed Grubbs by stating that the Fifth Circuit “reaffirms the importance of Rule 9(b) in FCA claims” and dismissing the relator’s FCA case because the relator’s allegations of a kickback scheme were “broad and sweeping, providing no indicia of any actual knowledge of any FCA-violating fraud,” and therefore did not satisfy Rule 9(b). Id. at *6. The Nunnally court stated that while the relator does not need to identify details regarding every false claim, the relator must make up for that shortcoming by “demonstrat[ing] a strong inference of fraud.” Id. at *5-6.
As these cases indicate, Rule 9(b) is important for determining if an FCA case is allowed to go forward at all. But perhaps equally important, courts have continued to find that Rule 9(b) also assists in determining the scope of discovery. For instance, in United States ex rel. Duxbury v. Ortho Biotech Prods., L.P., No. 12-2141, 2013 U.S. App. LEXIS 11842, at *23 (1st Cir. June 12, 2013), the First Circuit held that the scope of discovery should be limited to “only those claims supported by . . . well-pled allegations.” Id. at *20. Given that the relator failed to discover any evidence supporting his fraud allegations, the Court found no reason to expand the scope of discovery into a “fishing expedition.” Id. at *22 (citations omitted). This case is useful, as courts often use Rule 9(b) motions to at least limit what parts of a relator’s case go forward into discovery. With decisions like Duxbury, defendants have a strong argument that only those portions of a relator’s case that survive Rule 9(b) challenge are subject to any discovery.
F. What “Wartime” Tolls the Statute of Limitations?
The Wartime Suspension of Limitations Act (WSLA) tolls the ordinary six-year statute of limitations for prosecuting charges relating to fraud against the United States while at war. In United States ex rel. Carter v. Halliburton Co., 710 F.3d 171 (4th Cir. 2013), the Fourth Circuit addressed the question of whether a formal declaration of war is required to trigger this Act. It found that the answer is “no.” In Carter, the defendant allegedly used fraudulent billing practices for services provided to the United States military in Iraq, but the defendant argued that the case was barred by the statute of limitations. Id. at 178. The court disagreed, finding that the WSLA applied to toll the limitations period. The court explained that the definition of “at war” for purposes of the tolling provisions of the WSLA includes more than just declared wars because the WSLA does not specifically require a “declared war,” the United States had not formally declared war since World War II, and the Supreme Court has previously applied laws of war to “non-declared war.” Id. at 178-79. Furthermore, because the purpose of the WSLA is to protect the United States from fraud during times of war, during which the country is more vulnerable, the court found the WSLA’s purpose would be frustrated by limiting its application to declared wars. Id. As a result, the court found that the WSLA applied subsequent to the adoption of the Authorization for the Use of Military Force against Iraq in 2002, which “signaled Congress’s recognition of the president’s power to enter into armed hostilities.” Id. The Fourth Circuit also held that the WSLA applies to both criminal and civil claims, including those brought by a relator if the government has declined to pursue the action. Id. at 179-80.
Some have speculated that this may open the question as to when, if ever, the limitations period is not tolled, given the United States’ ongoing foreign military engagements. Likewise, questions have arisen as to whether the tolling under the WSLA suggested by Carter only applies to cases against government contractors involved in war-related activities, or all FCA cases.
G. Developments in Anti-Retaliation Provision
The FCA also includes an anti-relation provision, prohibiting certain adverse employment actions in response to forms of protected activity, 31 U.S.C. § 3730(h). In the first half of 2013, there have been at least two developments relating to this provision.
First, two circuits have addressed the meaning of a protected activity under 31 U.S.C. §3730(h). In Glynn v. EDO Corp., 710 F.3d 209, 211 (4th Cir. 2013), the Fourth Circuit held that an employee was not engaged in a protected activity when he raised concerns regarding a product that EDO designed and manufactured for the United States military. The court used the “distinct possibility” standard to determine whether the employee’s actions constituted protected activity. Under the “distinct possibility” standard, an activity is protected under the FCA’s anti-retaliation statute if the activity was “investigating ‘matters that reasonably could lead to a viable FCA action.'” Id. at 214 (quoting Eberhardt v. Integrated Design & Constr., Inc., 167 F.3d 861, 869 (4th Cir. 1999)). Even though the employee allegedly determined that the product was inferior to what EDO had represented, the problem was “not severe enough in degree to trigger any contractual obligations” by EDO. Id. at 215. Additionally, the employee did not engage in protected activity in furtherance of a qui tam suit by alleging false certification, because the government was satisfied with the allegedly inferior product. Id. at 217. As a result, the false certification did not have “a ‘natural tendency’ to influence the government’s decision to pay for the contracted service.” Id. Furthermore, the court’s conclusion under the “distinct possibility” standard that the employee did not engage in protected activity is not altered by the fact that the employee actually initiated a government investigation. Id. at 216.
In Thomas v. ITT Educ. Servs. Inc.., No. 12-30620, 2013 U.S. App. LEXIS 5783, at *1-2 (5th Cir. March 22, 2013) the Fifth Circuit held that Thomas, an instructor at ITT, was unable to state a claim for retaliation under 31 U.S.C. § 3730(h) because she was not engaged in protected activity. Unlike the Fourth Circuit in Glynn, the Thomas court did not use the “distinct possibility” standard. Rather, the Thomas court defined a protected activity as “one motivated by a concern regarding fraud against the government.” Id. at *6. Although Thomas alleged that she refused to falsify grade records when allegedly persuaded to do so by ITT, she did not “submit evidence establishing that she sought to pursue a qui tam action, that she informed anyone at ITT that its actions were illegal, or that she informed anyone at ITT that its actions were fraudulent.” Id. at *8. Rather, Thomas’s claim related to “internal policy matters . . . beyond the reach of the FCA,” and did not state sufficient evidence to establish she engaged in protected activity. Id. at *9.
Second, the Fourth Circuit has addressed the issue of causation–specifically, whether an employee can demonstrate that his protected activity caused his termination if the employer did not know about the protected activity and the termination occurred long after the protected activity. In Shenoy v. Charlotte-Mecklenburg Hosp. Auth., No. 12-1786, 2013 U.S. App. LEXIS 9614, at *17 (4th Cir. May 13, 2013), a doctor filed a claim against Carolinas Pathology Group (CPG) alleging retaliation under the FCA. Id. at *2. The Fourth Circuit held that there was insufficient evidence to show that the relator’s acts in furtherance of a qui tam suit caused his termination. Id. at *17. The court not only considered the lack of evidence proving CPG’s knowledge of the doctor’s acts, but also considered the lengthy amount of time between CPG’s alleged knowledge and termination. Id. The court concluded that the “temporal proximity [was] several years, which is simply not ‘very close’ in time,” and thus, there was insufficient evidence of causation. Id.
H. Retroactivity of FERA Amendments
In 2009, Congress passed the Fraud Enforcement and Recovery Act (FERA) in part to relax the requirements for false statement liability under the FCA, responding to the Supreme Court’s 2008 holding in Allison Engine Co. v. United States ex rel. Sanders, 553 U.S. 662 (2008), that such liability can only attach where the defendant made a false statement with the intention of getting a false claim paid by the government. Section 4(f)(1) of FERA provides that the amendments “apply to all claims under the False Claims Act . . . that are pending on or after” June 7, 2008 – two days before Allison Engine was decided. Following the passage of FERA, a circuit split developed on whether the amended language is retroactive to all claims for payment pending on June 7, 2008, or rather to all cases (causes of action) pending on that date. The Ninth and Eleventh Circuits have adopted the former interpretation, and in November 2012 the Sixth Circuit joined the Second and Seventh Circuits finding the latter, in the continued proceedings on remand in Allison Engine. Sanders v. Allison Engine Co., 703 F.3d 930 (6th Cir. 2012).
On June 24, 2013, the Supreme Court denied Allison Engine’s petition for certiorari on this issue, effectively leaving in place the circuit split. Allison Engine Co., Inc. v. United States ex rel. Sanders, 81 U.S.L.W. (U.S. June 24, 2013) (No. 12-1057). Accordingly, whether the revised false statement liability will apply to a particular case will likely depend on the circuit in which the case was brought, and more circuits will be asked to weigh in on this question as more affected qui tam suits are unsealed and pursued in litigation.
The first half of 2013 was extremely active; and we anticipate that the second half of 2013 will be even more so when it comes to legislative, enforcement, and case law developments relating to the FCA. We will of course continue to monitor these developments, and you can look forward to their complete summary in our 2013 Year-End FCA Alert, due in January 2014.
[1] See Press Release, U.S. Dep’t of Justice, Office of Pub. Affairs, Acting Associate Attorney General Tony West Speaks at Pen and Pad Briefing Announcing Record Civil FY 2012 Recoveries (Dec. 4, 2012), http://www.justice.gov/iso/opa/asg/speeches/2012/asg-speech-1212041.html [hereinafter West Pen and Pad Briefing].
[2] See U.S. Dep’t of Justice, Fraud Statistics-Overview (Oct. 24, 2012), http://www.justice.gov/civil/docs_forms/C-FRAUDS_FCA_Statistics.pdf [hereinafter Fraud Statistics].
[3] 31 U.S.C. § 3730(d).
[4] See Press Release, U.S. Dep’t of Justice, Office of Pub. Affairs (June 20, 2013), http://www.justice.gov/opa/pr/2013/June/13-civ-696.html. See also Judgment, Case No. 3:99-cv-00093 (S.D. Ohio July 1, 2013) (Dkt. No. 435).
[5] See West Pen and Pad Briefing, supra note 1.
[6] 2012 Year-End False Claims Act Update.
[7] U.S. Dep’t of Health & Human Servs., Office of the Inspector Gen., Updated OIG’s Provider Self-Disclosure Protocol 1 (2013), available at https://oig.hhs.gov/compliance/self-disclosure-info/files/Provider-Self-Disclosure-Protocol.pdf.
[8] Id.
[9] Medicare Program; Requirements for the Medicare Incentive Reward Program and Provider Enrollment, 78 Fed. Reg. 25,013 (proposed Apr. 17, 2013), available at http://www.gpo.gov/fdsys/pkg/FR-2013-04-29/pdf/2013-09991.pdf.
[10] Id.
[11] Id. at 25,016.
[12] 42 C.F.R. § 420.405(g).
[13] Medicare Program: Reporting and Returning Overpayments, 77 Fed. Reg. 9,179 (proposed Feb. 16, 2012), available at http://www.gpo.gov/fdsys/pkg/FR-2012-02-16/pdf/2012-3642.pdf.
[14] Act of Mar. 23, 2010, Pub. L. 111-148, 124 Stat. 119.
[15] Id.
[16] New York and Wisconsin were subject to the March 31 grace period. The August 31 expiration date applies to Georgia, Indiana, Massachusetts, Michigan, Nevada, Rhode Island, Tennessee, Texas, and Virginia. See U.S. Dep’t Health & Hum. Servs., Office of the Inspector Gen., State False Claims Act Reviews, http://oig.hhs.gov/fraud/state-false-claims-act-reviews/index.asp.
[17] Tx. Hum. Res. Code Ann. §§ 36.001 et seq. (West 2013), S.B. 1803, 83rd Leg., Leg. Sess. (Tex. 2013). See also S.B. 746, 83rd Leg., Leg. Sess. (Tex. 2013); S.B. 8, 83rd Leg., Leg. Sess. (Tex. 2013).
[18] See Letter from Daniel R. Levinson, Inspector Gen., U.S. Dep’t of Health & Human Servs., to Greg Abbott, Att’y Gen. of Tex. (Mar. 21, 2011), available at http://oig.hhs.gov/fraud/docs /falseclaimsact/Texas.pdf.
[19] Fla. Stat. Ann. § 68.081 et seq. (West 2013); H.B. 937, 2013 Leg., Reg. Sess. (Fla.).
[20] Letter from Daniel R. Levinson, Inspector Gen., U.S. Dep’t of Health & Human Servs., to David Lewis, Director, Medicaid Fraud Control Unit, Fla. Office of the Att’y Gen. (Mar. 21, 2011), http://oig.hhs.gov/fraud/docs/falseclaimsact/Florida.pdf.
[21] H.B. 4190, 97th Gen. Assemb., Reg. Sess. (2012), amending the Illinois Whistleblower Reward and Protection Act, 740 Ill. Comp. Stat. Ann. 175/1 (West 2013).
[22] Letter from Daniel R. Levinson, Inspector Gen., U.S. Dep’t of Health & Human Servs., to Lisa Madigan, Att’y Gen. of Ill. (May 22, 2013), available at http://oig.hhs.gov/fraud/docs/falseclaimsact/Illinois.pdf.
[23] 2013 Mont. Laws Ch. 388, amending the Montana False Claims Act, Mont. Code Ann. §§ 17-8-401 et seq. (West 2013).
[24] B. 19-244, 2012 Sess. (D.C. 2012) (codified at D.C. Code § 2-381.01 et seq.).
[25] See Georgia Taxpayer Protection False Claims Act, Ga. Code Ann. § 23-3-120 et seq. (West 2013); Tennessee Medicaid False Claims Act, Tenn. Code Ann. §§ 71-5-181 et seq.
[26] Letter from Daniel R. Levinson, Inspector Gen., U.S. Dep’t of Health & Human Servs. to Robert E. Cooper, Att’y Gen. of Tenn. (Nov. 20, 2012), available at http://oig.hhs.gov/fraud/docs/falseclaimsact/Tennessee .pdf.
[27] See, e.g., H.B. 184, 108th Gen. Assemb., Reg. Sess. (Tenn. 2013); H.B. 190, 108th Gen. Assemb., Reg. Sess. (Tenn. 2013).
[28] Martha Coakley, Familiar Warning Signs in For-Profit Schools, Boston Globe, Apr. 10, 2013, at A11.
[29] See Press Release, U.S. Dep’t of Justice, Office of Pub. Affairs, ISTA Pharmaceuticals Inc. Pleads Guilty to Federal Felony Charges; Will Pay $33.5 Million to Resolve Criminal Liability and False Claims Act Allegations (May 24, 2013), http://www.justice.gov/opa/pr/2013/May/13-civ-606.html.
[30] The Department of Health and Human Services and The Department of Justice Health Care Fraud and Abuse Control Program Annual Report for Fiscal Year 2012 at 1 (Feb. 2013), available at https://oig.hhs.gov/publications/docs/hcfac/hcfacreport2012.pdf.
[31] See Press Release, U.S. Dep’t of Justice, Office of Pub. Affairs, Florida-Based American Sleep Medicine to Pay $15.3 Million for Improperly Billing Medicare and Other Federal Healthcare Programs (Jan. 3, 2013), http://www.justice.gov/opa/pr/2013/January/13-civ-006.html.
[32] See Press Release, U.S. Attorney’s Office, D.N.J., Office of Pub. Affairs, Major New Jersey Hospital Pays $12.5 Million to Resolve Kickback Allegations (Jan. 24, 2013), http://www.justice.gov/usao/nj/Press/files/Cooper%20Settlement%20PR.html.
[33] See Press Release, U.S. Dep’t of Justice, Office of Pub. Affairs, Florida Physician to Pay $26.1 Million to Resolve False Claims Allegations (Feb. 11, 2013), http://www.justice.gov/opa/pr/2013/February/13-civ-183.html.
[34] See Press Release, U.S. Dep’t of Justice, Office of Pub. Affairs, Par Pharmaceuticals Pleads Guilty and Agrees to Pay $45 Million to Resolve Civil and Criminal Allegations Related to Off-Label Marketing (Mar. 5, 2013), http://www.justice.gov/opa/pr/2013/March/13-civ-270.html.
[35] See Agreement, Case No. 2:13-mj-08080-MCA (D.N.J. Mar. 5, 2013); Joint Stipulation of Dismissal with Prejudice, Case No. 1:11-cv-1820-RC (D.D.C. Mar. 5, 2013).
[36] See Press Release, U.S. Dep’t of Justice, Office of Pub. Affairs, Par Pharmaceuticals Pleads Guilty and Agrees to Pay $45 Million to Resolve Civil and Criminal Allegations Related to Off-Label Marketing (Mar. 5, 2013), http://www.justice.gov/opa/pr/2013/March/13-civ-270.html.
[37] See Press Release, U.S. Dep’t of Justice, Office of Pub. Affairs, Hospice of Arizona and Related Entities Pay $12 Million to Resolve False Claims Act Allegations (Mar. 20, 2013), http://www.justice.gov/opa/pr/2013/March/13-civ-326.html.
[38] See Press Release, U.S. Dep’t of Justice, Office of Pub. Affairs, Intermountain Health Care Inc. Pays U.S. $25.5 Million to Settle False Claims Act Allegations (Apr. 3, 2013), http://www.justice.gov/opa/pr/2013/April/13-civ-378.html.
[39] See Press Release, U.S. Dep’t of Justice, Office of Pub. Affairs, Amgen to Pay U.S. $24.9 Million to Resolve False Claims Act Allegations (Apr. 16, 2013), http://www.justice.gov/opa/pr/2013/April/13-civ-438.html.
[40] See Press Release, U.S. Dep’t of Justice, Office of Pub. Affairs, Adventist Health Pays United States and State of California $14.1 Million to Resolve False Claims Act Allegations (May 3, 2013), http://www.justice.gov/opa/pr/2013/May/13-civ-507.html.
[41] See Press Release, U.S. Attorney’s Office, E.D.N.C., Office of Pub. Affairs, Jury Returns $39 Million Verdict Against Hospital for Violating Stark Law & False Claims Act (May 10, 2013), http://www.justice.gov/usao/nce/press/2013/2013-may-10_03.html.
[42] See Press Release, U.S. Dep’t of Justice, Office of Pub. Affairs, Ranbaxy Pleads Guilty to Violations of the Food, Drug, and Cosmetic Act and Making False Statements – Agrees to Pay $500 Million in Fines and to Resolve Civil Claims (May 13, 2013), http://www.justice.gov/usao/md/Public-Affairs/press_releases/Press13/RanbaxyPleadsGuiltyToViolationsOfTheFDCAAndMakingFalseStatements-AgreesToPay500Million.html.
[43] See Press Release, U.S. Dep’t of Justice, Office of Pub. Affairs, C.R. Bard Inc. to Pay U.S. $48.26 Million to Resolve False Claims Act Claims (May 13, 2013), http://www.justice.gov/opa/pr/2013/May/13-civ-547.html.
[44] See Press Release, U.S. Dep’t of Justice, Office of Pub. Affairs, U.S. Renal Care to Pay $7.3 Million to Resolve False Claims Act Allegations (May 21, 2013), http://www.justice.gov/opa/pr/2013/May/13-civ-588.html.
[45] See Press Release, U.S. Dep’t of Justice, Office of Pub. Affairs, ISTA Pharmaceuticals Inc. Pleads Guilty to Federal Felony Charges; Will Pay $33.5 Million to Resolve Criminal Liability and False Claims Act Allegations (May 24, 2013), http://www.justice.gov/opa/pr/2013/May/13-civ-606.html.
[46] See Press Release, Ensign Group, The Ensign Group Announces Settlement with U.S. Department of Justice (Apr. 22, 2013), http://investor.ensigngroup.net/releasedetail.cfm?ReleaseID=758229.
[47] See Press Release, U.S. Dep’t of Justice, Office of Pub. Affairs, Company and Its President Agree to $5 Million Settlement Over Billing For Linguists Sent Into War Zones (Jan. 7, 2013), http://www.justice.gov/usao/pae/News/2013/Jan/worldwide_release.htm.
[48] See Press Release, U.S. Dep’t of Justice, Office of Pub. Affairs, CH2M Hill Hanford Group Inc. Admits Criminal Conduct, Parent Company Agrees to Cooperate in Ongoing Investigation and Pay $18.5 Million to Resolve Civil and Criminal Allegations (Mar. 7, 2013), http://www.justice.gov/opa/pr/2013/March/13-civ-275.html.
[49] Id.
[50] See Press Release, U.S. Dep’t of Justice, Office of Pub. Affairs, New York-Based Corning Incorporated to Pay U.S. $5.65 Million to Resolve False Claims Allegations (Mar. 8, 2013), http://www.justice.gov/opa/pr/2013/March/13-civ-289.html.
[51] See Press Release, U.S. Dep’t of Justice, Office of Pub. Affairs, CDW-Government to Pay U.S. $5,663,902 to Resolve False Claims Act Allegations (Mar. 29, 2013), http://www.justice.gov/opa/pr/2013/March/13-civ-360.html.
[52] See Press Release, U.S. Dep’t of Justice, Office of Pub. Affairs, Science Applications International Corporation Pays $11.75 Million to Settle False Claims Allegations (June 13, 2013), http://www.justice.gov/opa/pr/2013/June/13-civ-668.html.
[53] See Gary Gerew, Whistleblower in False Claims Act Case Awarded $1.88 Million, Albuquerque Bus. First (June 25, 2013).
[54] See Press Release, U.S. Dep’t of Justice, Office of Pub. Affairs, (June 20, 2013), http://www.justice.gov/opa/pr/2013/June/13-civ-696.html.
[55] See Judgment, Case No. 3:99-cv-00093 (S.D. Ohio July 1, 2013) (Dkt. No. 435).
[56] See Press Release, U.S. Dep’t of Justice, Office of Pub. Affairs, General Electric Aviation Systems to Pay U.S. $6.58 Million to Resolve False Claims Act Allegations (June 26, 2013), http://www.justice.gov/opa/pr/2013/June/13-civ-719.html.
[57] See Press Release, U.S. Dep’t of Justice, Office of Pub. Affairs, Pittsburgh-based Bank to Pay U.S. for Failing to Engage in Prudent Underwriting Practices on SBA Loan Guarantees (Jan. 25, 2013), http://www.justice.gov/opa/pr/2013/January/13-civ-109.html.
[58] See Press Release, U.S. Dep’t of Justice, Office of Pub. Affairs, For-Profit School in Texas to Pay United States Up to $2.5 Million for Allegedly Submitting False Claims for Federal Student Financial Aid (May 31, 2013), http://www.justice.gov/opa/pr/2013/May/13-civ-630.html.
[59] Moreover, the means by which a “public disclosure” can occur under the FCA have recently been limited as a result of amendments put in place by the Patient Protection and Affordable Care Act (“PPACA”), Pub. L. No. 111-148. These amendments also provide what some have argued is “veto power” to the government to oppose any motion to dismiss a qui tam case on public disclosure grounds, and they also limit the requirements as to what it takes to be “original source” under the statute. See 31 U.S.C. § 3730(e)(4).
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