/>iHeadlines that Matter for Companies and Executives in Regulated Industries
Amici Seek Dismissal of Qui Tam Suit From High Court
Various medical, business and legal organizations are asking the US Supreme Court to uphold the dismissal of a False Claims Act (FCA) lawsuit, through submission of a number of amicus curiae briefs to the Court in the case U.S. ex rel. Polanksy v. Executive Health Resources Inc. et al.
The case is before the Court on appeal of the Third Circuit’s ruling in October 2021, which affirmed the dismissal of relator Polansky’s lawsuit against Executive Health Resources Inc., based on a motion to dismiss filed by US Department of Justice (DOJ) — years after it initially declined to intervene in the lawsuit — pursuant to its statutory authority to dismiss whistleblower FCA cases.
Polanksy had accused Executive Health Resources Inc., a health care billing review company, of helping hospitals overcharge federal health care programs. DOJ moved to dismiss the case, arguing that it had “doubts about the petitioner’s ability to prove an FCA violation.” The Third Circuit affirmed that dismissal, despite that DOJ had not previously intervened in the case. Polansky now argues that the dismissal should be reversed so that he can pursue the action, because the DOJ gave up its right to seek dismissal after initially declining to intervene in the action.
Amici before the US Supreme Court include the US Chamber of Commerce, American Health Care Association, and American Hospital Association; The Washington Legal Foundation; and the Pharmaceutical Research and Manufacturers of America. They argue that the FCA’s language “does not support second-guessing the government’s reasons for dismissal” because the FCA “allows private individuals like Polanksy to sue on behalf of the United States as a way to further the government’s interests, not to frustrate them.” Amici explain that the FCA allows the government to retain control over qui tam suits brought in the government’s name by, inter alia, dismissing the action over the relator’s objections, and that the Third Circuit’s dismissal was therefore appropriate.
The case is U.S. ex rel. Polansky v. Executive Health Resources Inc. et al., No. 21-1052, in the US Supreme Court.
Texas Doctor Pleads Guilty to $54 Million Medicare Fraud
On October 25, 2022, a Texas doctor pleaded guilty for his role in a $54 million Medicare fraud scheme.
According to DOJ and court documents, the doctor prescribed durable medical equipment and cancer genetic testing without seeing or treating patients. The doctor allegedly knew that, with these prescriptions, over $54 million in false and fraudulent claims were submitted to Medicare. From August 2018 through April 2019, the doctor allegedly received approximately $30 for each order he signed authorizing durable medical equipment and genetic testing that was either not needed or not used, amounting to a total of more than $466,000 in kickbacks.
DOJ alleged that Medicare beneficiaries were targeted by telemarketing campaigns and at health fairs, and were induced to receive the cancer genetic testing and durable medical equipment regardless of medical necessity.
The doctor pleaded guilty to conspiracy to commit wire fraud and is scheduled to be sentenced on March 15, 2023. He faces a maximum penalty of 20 years in prison.
The DOJ press release can be found here.
Colorado Man Indicted for Million Dollar COVID-19 PPP Fraud
On October 26, 2022, the US Attorney’s Office for the District of Colorado announced that a Colorado-based man was arrested after being indicted by a federal grand jury for his involvement in a million dollar Paycheck Protection Program (PPP) fraud scheme.
According to the indictment, from April 2020 through September 2021, the defendant submitted fraudulent PPP applications to seven banks and one lender for emergency financial assistance to deal with the economic impact of the COVID-19 pandemic. The PPP applications, which the defendant submitted on behalf of a number of business entities that he claimed to control, falsely represented that all PPP funds received would be used to pay eligible business expenses. The defendant obtained more than one million dollars in PPP loans as a result of these false and fraudulent applications; rather than using the PPP funds for eligible business expenses as required, the indictment alleged that the defendant used the PPP funds for his personal benefit, purchasing, among other things, real estate and vehicles.
The defendant later sought loan forgiveness for the PPP loans by submitting loan forgiveness applications. According to the indictment, the defendant also made false representations regarding his businesses and his compliance with the PPP program’s requirements, including the requirements related to the uses of PPP loan funds.
The defendant was indicted for wire fraud and money laundering, and made his initial appearance before a magistrate judge on October 26, 2022.
The DOJ press release can be found here.
