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Escobar decision continues to affect major FCA cases

March 22, 2018

In 2016, the Supreme Court decided the landmark FCA case Universal Health Servs., Inc. v. United States ex rel. Escobar, 136 S.Ct. 1989 (2016). Escobar resolved a circuit split over the implied false certification theory of liability under the FCA, upholding the theory as valid but tightly circumscribing its scope through a "rigorous" interpretation of the Act's materiality and scienter requirements—holding that "[a] misrepresentation about compliance with a statutory, regulatory, or contractual requirement must be material to the Government's payment decision in order to be actionable under the False Claims Act." Escobar, 136 S.Ct. at 1996. This holding continues to percolate through the federal courts, proving determinative in several recent cases of interest. More

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US Government continues to combat health care fraud in Chicago

March 8, 2018

Both the False Claims Act and criminal health care fraud laws continue to be powerful tools for combating health care fraud—and many criminal health care fraud cases could also have been FCA cases, had a whistleblower come forward in time. More

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Wisconsin taxpayers have lost millions since the 2015 repeal of the Wisconsin FCA

February 22, 2018

Wisconsin taxpayers have missed out on over $11 million in Medicaid fraud settlements since the Wisconsin legislature and Gov. Scott Walker repealed the Wisconsin False Claims Act in 2015, reports the Wisconsin Center for Investigative Journalism. Wisconsin is the only state to have repealed its FCA, despite Gov. Walker's anti-government-waste platform. More

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Chemed Corp. and Vitas Hospice Services settle FCA allegations for $75 million

February 9, 2018

The largest for-profit hospice chain in the United States paid $75 million in October 2017 to resolve FCA allegations against it, the Department of Justice reported. Vitas Hospice Services and its corporate parent Chemed Corp. were alleged to have submitted false claims to Medicare over an 11-year period between 2002 and 2013. This settlement represents the largest FCA recovery ever against a hospice provider. More

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Illinois Attorney General reaches $4.5 million settlement with Chicago-area gas stations under the Illinois FCA

January 5, 2018

In the Fall of 2017, Illinois Attorney General Lisa Madigan's office announced a $4.5 million settlement with 13 Chicago-area gas stations and two gas station owners under the Illinois False Claims Act, claiming sales tax fraud. More

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FCA Allegations Regarding Employee Billable Time in U.S. Disaster-Relief Efforts Survive Motion to Dismiss

December 15, 2017

On September 27, Judge Oetken of the Southern District of New York granted in part and denied in part defendants' motion to dismiss an FCA whistleblower's claims that CDM Smith, Inc. and CDM Constructors, Inc.—subcontractors of USAID who were involved in rebuilding efforts in Pakistan after the devastating 2005 earthquake—had submitted false billing claims to the government for employee time and subpar work. The whistleblower, Saif Hussain, a former CDM engineer, also alleged retaliation. The court allowed the allegations concerning employee billable time to go forward, applying the recent Chorches standard in Hussain's favor. More

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Four Houston-Area Hospitals Pay $8.6 Million to Settle Ambulance Swapping Allegations

December 5, 2017

Four Houston-area hospitals have paid $8.6 million collectively to settle allegations of "ambulance swapping"—that ambulance companies paid kickbacks to the hospitals in exchange for the hospitals' lucrative Medicare and Medicaid transport referrals. The hospitals—Bayshore Medical Center, Clear Lake Regional Medical Center, West Houston Medical Center, and East Houston Regional Medical Center—are all affiliates of the Nashville-based Hospital Corporation of America. More

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New York-Based Contractors Settle FCA Allegations that Company Improperly Obtained Federal Contracts for Service-Disabled Veterans

November 13, 2017

The Justice Department announced earlier this month that Alden, New York-based contractors Zoladz Construction Company Inc., Arsenal Contracting LLC, and Alliance Contracting LLC—all owned by John Zoladz of Darien, New York and David Lyons of Grand Island, New York—paid more than $3 million to settle False Claims Act allegations that they fraudulently obtained federal contracts set aside for service-disabled veteran-owned (SDVO) small businesses. More

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Texas Nursing Home Settles FCA Rehab Services Fraud Claim for $600,000

October 11, 2017

Texas nursing home company Regent Management Services, L.P. paid $600,000 in August of this year to settle a False Claims Act case brought by one of its former employees in 2014. More

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Ninth Circuit Affirms FCA Grant Fraud Finding Against Chabad of California

October 4, 2017

On September 7, the Ninth Circuit affirmed that Chabad of California was liable for federal grant fraud under the False Claims Act for its noncompliance with financial management standards imposed as a condition of participation in the Urban Areas Security Initiative: Nonprofit Security Grant Program run by the Department of Homeland Security. See United States ex rel. Kozak v. Chabad of California, No. 15-17246 (9th Cir. Sept. 7, 2017). More

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