Tag: Qui Tam

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Health Law Highlights

Let’s Make a Deal with DOJ: The Impact of the DOJ’s New Whistleblower Reward Program on Corporate Compliance

Summary of article from Husch Blackwell, by Christina Moore, Madison Rector:

The DOJ announced a new whistleblower rewards program aimed at incentivizing reports of corporate or financial misconduct. This program, allowing individuals to report violations of any federal law, particularly criminal abuses of the U.S. financial system, fills gaps not covered by existing whistleblower initiatives like the False Claims Act (FCA) or the IRS Whistleblower Program. Under the new program, whistleblowers do not need to file a lawsuit or hire an attorney, making it easier for them to report wrongdoings. This initiative could increase pressure on companies to maintain high ethical standards and prevent misconduct. To mitigate risks, compliance officers should foster a culture of openness and communication, ensuring that employees are aware of internal reporting procedures and feel safe using them.

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Texas Heart Hospital and Subsidiary Management Company to Pay $48 Million to Settle False Claims Act Allegations Related to Alleged Kickbacks

Huge qui tam settlement where the qui tam plaintiffs will recover $13.9 million. The underlying action involves allegations that the Heart Hospital violated the Stark Law and the Anti-Kickback Statute by requiring physician owners to satisfy the Heart Hospital’s yearly 48 patient-contact requirement in order to maintain ownership in the hospital.

This settlement arises from a lawsuit filed by former Heart Hospital physician owners Mitchell Magee, M.D. and Todd Dewey, M.D. pursuant to the whistleblower or qui tam provisions of the False Claims Act, which permit private persons to bring a lawsuit on behalf of the government and to share in the proceeds.

Dr. Dewey and Dr. Magee will collectively receive $13,920,000 as their share of the recovery.

Source: Texas Heart Hospital and Wholly-Owned Subsidiary THHBP Management Company LLC to Pay $48 Million to Settle False Claims Act Allegations Related to Alleged Kickbacks

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Medical Device Maker to Pay $18 Million to Settle Allegations of Improper Payments to Physicians

This is not a Texas company, but it is a good example of how some manufacturers try to cloak improper payments under the veil of legitimate compensation.

The device manufacturer paid millions of dollars in “advertising assistance, practice development, practice support, and purported unrestricted educational grants” directly to local healthcare providers to induce sales of their products. Moreover, these inducements were only paid to select providers to reward them for past sales. The press release highlights the fact that the manufacturer’s compliance officer warned them of the practice, but those warnings went unheeded.

This matter started as a qui tam (Whistleblower) action under the False Claims Act by the former chief compliance officer of the company.

Source: Medical Device Maker to Pay $18 Million to Settle Allegations of Improper Payments to Physicians

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Professional Relators Have No Right to Sue for Beneficial Conduct

The Seventh Circuit determined that professional qui tam relators formed as “investment vehicles for financial speculators” should not be allowed to challenge conduct determined by the government likely to be lawful, and definitely beneficial to the government and the public.

The court creates a new standard for dismissal, joining the standards articulated in Sequoia Orange and Swift. Under the new standard, “[t]he Government may dismiss the action without the relator’s consent if the relator receives notice and opportunity to be heard.”

Source: United States ex re. Cimznhca, LLC v. UCB, Inc.