Justice Department Clarifies Softer Stance on False Claims Act Enforcement

by Barley Snyder
Contact
The U.S. Department of Justice (“DOJ”) recently clarified two prior memos that suggested less enforcement of False Claims Act (“FCA”)1 cases. One memo (commonly known as the “Granston” memo)2 encouraged federal prosecutors to actively oppose FCA cases brought by whistleblowers that the government views as weak. The FCA allows private individuals to sue hospitals, physicians and other providers for false claims on the government’s behalf, even if the government investigates and chooses not to litigate. The Granston memo urged prosecutors to employ a rarely-used provision of the FCA that authorizes the DOJ to file a motion to dismiss whistleblower cases that lack merit.3      
 
In a recent speech at the Federal Bar Association, Deputy Assistant Attorney General, Stephen Cox, clarified that qui tam (or whistleblower) cases will continue play an important role in FCA enforcement.4  Although the government only chooses to participate (or intervene) in 1 of 5 whistleblower cases, it will not actively oppose whistleblower cases unless “the underlying factual or legal theories clearly lack merit.” Mr. Cox stated that investigating and “monitoring meritless cases is not a good use of Department resources; litigating these cases is not a good use of judicial resources; and forcing defendants to defend these cases is not in the interests of justice...” He added that dismissal may be appropriate even if a claim is false but did not materially harm or impact government payments. 
 
In the same speech, Mr. Cox clarified the DOJ’s position concerning another memo, known as the “Brand” memo.5  The Brand memo instructed federal prosecutors not to use “agency guidance” as a basis for proving a violation of law. The memo explained that agency guidance, such as guidance issued by the Centers for Medicare and Medicaid (“CMS”) or the Office of Inspector General (“OIG”), does not have the force of law and does not create legal obligations that exceed the requirements of the underlying statute or regulation. In his speech, Mr. Cox expanded on this stating that while the regulatory process is slow and cumbersome, “sometimes agencies have used guidance as a short-cut to effectively make new rules” without following the proper rulemaking procedures. He added that although agency guidance may serve to educate the public concerning certain regulatory requirements, it is not legally binding unless formally adopted as law or regulation.
 
While some have interpreted the Granston and Brand memos as a sign that the DOJ is taking a softer stance on FCA enforcement, the Department has clarified that these memos represent a tightening of litigation standards rather than signaling less enforcement activity. Indeed, Mr. Cox reported that for the prior fiscal year, the federal government has recovered more than $3.4 billion from False Claims Act enforcement. Of this amount, $2.4 billion was recovered in actions against healthcare providers, representing the eighth consecutive year that healthcare fraud recoveries exceeded $2 billion. Therefore, while these DOJ memos may signal a shift in enforcement policy, healthcare providers still must guard against meritless whistleblower cases and other FCA enforcement actions.

131 U.S.C. § 3729 et seq.
2U.S. Dept. of Justice, Factors for Evaluating Dismissal Pursuant to 31 U.S.C. 3730(c)(2)(A), Director of Commerical Litigation Branch of Fraud Section, Michael Granston, January 10, 2018.
3 31 U.S.C. § 3730(c)(2)(A).
4Justice News, Deputy Associate Attorney General Stephen Cox Delivers Remarks at the Federal Bar Association Qui Tam Conference, available at https://www.justice.gov/opa/speech/deputy-associate-attorney-general-stephen-cox-delivers-remarks-federal-bar-association
5U.S. Dept. of Justice, Limiting Use of Agency Guidance Documents in Affirmative Civil Enforcement Cases, Associate Attorney General, Rachel Brand, January 25, 2018.
 

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Barley Snyder | Attorney Advertising

Written by:

Barley Snyder
Contact
more
less

Barley Snyder on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.