The HEAT is on …

Yes, it is summer time for sure – but the HEAT in this instance is the “Health Care Fraud Prevention and Enforcement Action Team” initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services in order to combat health care fraud.

Two recent enforcement actions against medical device companies (one of which resulted in a $646 Million settlement, which is the largest total amount paid in US history for violations of the Anti-Kickback Statute by a medical device company) highlight some interesting trends and themes. Here are five key take-aways:

  1. The collaboration among the various regulatory enforcers continues, ranging from the Department of Justice (DOJ), Food and Drug Administration (FDA), Health and Human Services (HHS), Office of Inspector General (OIG), to the Federal Bureau of Investigation (FBI) – just to name a few …
  2. The False Claims Act remains one of the most powerful enforcement tools. In a nutshell, the False Claims Act is a Civil War-era statute that was enacted to combat military contractor fraud and which prohibits anyone from submitting a false claim for payment to the Government. It is unique in that it enables private “whistleblowers” to bring an enforcement action on behalf of the Government and entitles them to receive 15% – 30% of any successful recovery.
  3. The significance of open reporting (culture and process) for companies operating in the highly-regulated healthcare industry. It is noteworthy that both of these cases were brought by whistleblowers, i.e. individuals inside the company who blew the whistle on their employers and colleagues.
  4. The Government’s continued focus on individual accountability and prosecution. In the Johnson & Johnson / Acclarent case, this resulted in the convictions of the former Chief Executive Officer and the Vice President of Sales.
  5. The critical importance of companies implementing a robust compliance program and engaging healthcare compliance experts.

A more in-depth discussion of these two cases can be found on the Department of Justice website:

Olympus Corp: https://www.justice.gov/opa/pr/medical-equipment-company-will-pay-646-million-making-illegal-payments-doctors-and-hospitals

Johnson & Johnson / Acclarent:  https://www.justice.gov/opa/pr/johnson-johnson-subsidiary-acclarent-inc-pays-government-18-million-settle-false-claims-act

By | 2017-08-08T21:57:46+00:00 July 28th, 2016|Regulators|