Mintz Levin Health Care Qui Tam Update - Recent Developments & Unsealed Cases

by Mintz Levin - Health Law & Policy Matters

Trends and Analysis

  • We have identified 21 health care–related qui tam cases unsealed since last month’s Qui Tam Update. Of those, two were filed in 2013, 15 were filed in 2011 or 2012, and four were filed in 2010 or earlier.
  • The cases unsealed in September were filed in 14 different states, and several cases were filed in historically active jurisdictions for False Claims Act (FCA) cases, including the Eastern District of Pennsylvania, the District of Massachusetts, and the Eastern District of New York.
  • The government intervened in one case and declined to intervene in 14 of the health care cases unsealed in September. In three of the remaining cases, the relator dismissed the case. In two other remaining cases, it is unclear from the dockets (which appear to remain partially sealed) whether the government has made a decision regarding intervention. In the final remaining case, the government declined to intervene, but the relator appears to be moving forward with the case. It remains to be seen whether this high declination rate is due to limited government resources with which to pursue qui tam cases, the relative weakness of the relators’ cases, the government’s confidence that the relators will proceed with the cases on their own, or some combination of these possibilities. We will continue to monitor this trend in the coming months.
  • Subject matter of claims:
    • A number of cases involve both federal and state claims.
    • Several cases allege “off-label” promotion of pharmaceuticals and violations of the Anti-Kickback Statute (AKS), both of which are longstanding theories on which countless FCA cases have been based.
    • Two cases are based on claims that the providers who actually rendered the services at issue were improperly credentialed. For example, in one case, the relator alleges that the defendant submitted claims for services rendered by physicians when, in fact, those services were provided by physician assistants and nurse practitioners.
    • One case involves a company that provides staffing and charting/billing services to Emergency Departments (ED) and urgent care centers. The relator accuses the defendants of engaging in upcoding and falsifying patients and billing records, requiring ED physicians to send charts to defendant coding/billing companies which would review them and select coding to maximize profit (which the relator alleged resulted from upcoding), and instructing physicians to engage in certain upcoding practices and falsifying of medical records.
  • Identity of relators:
    • The majority of cases unsealed in September were filed by either current or former employees of the defendant or individuals who had formerly contracted with the defendant. In one case, discussed in more detail below, the complaint is the relator’s second filed against his former employer alleging similar conduct.
    • One case was filed by a relator who was performing an audit on behalf of the New York State Office of the Medicaid Inspector General.

Selected Cases Unsealed in September 2013

United States ex rel. Boise v. Cephalon, Inc. et al., 2:08-cv-00287-TON (E.D. Pa.)

Complaint filed: June 30, 2009

Complaint unsealed: September 13, 2013

Intervention status: Declined

Claims: False claims to Medicare, Medicaid, CHAMPUS / TRICARE, CHAMPVA, and the Federal Employee Health Benefits Program in violation of the Civil False Claims Act, 31 U.S.C. § 3729 et seq., as well as FCA analogues in 25 states and the District of Columbia. The complaint also alleges a conspiracy between Cephalon and Takeda Pharmaceuticals North America, Inc. under 31 U.S.C. § 3729(a)(3).

Name of relator(s): Bruce Boise, a former Cephalon sales representative and sales manager

Defendant’s business: Cephalon is a biopharmaceutical manufacturer; Takeda is a pharmaceutical company.

Relator’s counsel: Philips & Cohen, LLP, and Weinstein, Kitchenoff & Asher, LLC

Summary of case: The complaint is the relator’s second complaint against Cephalon. The relator successfully brought FCA claims against Cephalon related to off-label marketing of three drugs (Actiq, Gabitril, and Provigil), which were settled in September 2008 for $375 million through a settlement agreement covering the time period from January 1, 2001 through December 31, 2006. In addition, Cephalon entered into a Corporate Integrity Agreement (CIA). At the same time, Cephalon pleaded guilty to criminal misbranding under 21 U.S.C. §§ 331(a), 333(a)(1), and 352(f)(1) and paid $50 million (the 2008 Resolution). The current complaint alleges that Cephalon utilized sales and marketing strategies to promote off-label uses for four drugs (Fentora, Nuvigil, Amrix, and Provigil) and that Cephalon embarked on a co-promotion agreement and conspiracy with Takeda.

Current status: The United States declined to intervene; the relators may proceed on their own.

Reasons to watch: The case is the second FCA claim brought by the same relator against the same defendant for similar off-label marketing conduct. The current complaint was filed and covers the time period after resolution of relator’s first case and includes some additional products. Although these are important differences, it is interesting that the federal government declined to intervene notwithstanding the fact that the complaint alleges conduct similar to that which was the subject of the 2008 case. The case is also notable because we have not seen many cases where relators have filed a new case against their former employers, especially after obtaining a favorable settlement in the first case. Of particular note, the relator was terminated in 2003 and thus was not employed by the company from 2006 to the present, the time period covered by the complaint. Further, Cephalon’s defense strategy and its success are worth watching to see whether a relator can successfully bring additional claims against his former employer for similar conduct during a time period in which the relator was no longer employed by the company. Notably, Cephalon faces a second, separate FCA case (discussed below) in which relators allege off-label marketing of three drugs.

United States ex rel. John Doe v. Cephalon, Inc., 2:09-cv-02926-MSG (E.D. Pa.)

Complaint filed: June 30, 2009

Complaint unsealed: September 13, 2013

Intervention status: Declined

Claims: False claims to Medicare, TRICARE, Medicaid, and “other federally funded government health care programs” in violation of the Civil False Claims Act, 31 U.S.C. § 3729(a)(1)-(a)(2), as well as FCA analogues in 27 states, the District of Columbia, and in Chicago and New York City; relators also allege a conspiracy between Cephalon and WebMD Health Corp. in violation of 31 U.S.C. § 3729(a)(3).

Name of relator(s): John Does 1-3, each of whom is a former employee of Cephalon

Defendant’s business: Cephalon is a biopharmaceutical manufacturer; WebMD provides health information online.

Relator’s counsel: Duane Morris, LLP

Summary of case: The complaint alleges that Cephalon engaged in off-label promotion of three drugs: Fentora, Provigil, and Nuvigil. Some of the drugs at issue in the 2008 Resolution, which is described in the complaint, are allegedly predecessors to the drugs at issue in the current litigation. The complaint further alleges that Cephalon paid kickbacks to speakers, speaker-trainers, and meeting participants in violation of the AKS, 42 U.S.C. § 1320a-7b. As to WebMD, the complaint alleges that Cephalon and WebMD conspired to locate certain patient populations and promote Cephalon’s drugs for off-label uses to those populations. For example, relators allege that when a WebMD user “clicks on the WebMD medical dictionary definition of ‘fatigue’, [the user] immediately sees two bright orange Nuvigil page inserts, each promoting Nuvigil to ‘Rediscover Wakefulness’ [an alleged off-label use…] and offering a 7- or 14-Day Free Trial of Nuvigil by clicking to print the free trial voucher.”

Current status: The United States declined to intervene, the case has been unsealed, and the court issued a summons to defendants Cephalon and WebMD.

Reasons to watch: The case is notable for at least two reasons. First, the relator’s theory that WebMD is liable for conspiracy under the FCA based on advertisements placed on its website allegedly promoting off-label uses could, if ultimately proven, have a wide-ranging impact on the placement of pharmaceutical and medical device advertisements online. Second, pharmaceutical companies and defense attorneys will monitor Cephalon’s defense strategy because the conduct alleged in the complaint appears to be the same or similar conduct alleged in prior lawsuits which Cephalon settled and during portions of which period it was operating under a CIA.

United States ex rel. Edwards v. Amerigroup Corporation et al., No. 1:12-cv-02399-WMN (D. Md.)

Complaint filed: August 13, 2012

Complaint unsealed: No date provided in the docket.

Intervention status: Declined

Claims: Several violations of the Federal False Claims Act, 31 U.S.C. § 3729 et seq., as well as conspiracy to violate the Federal False Claims Act and violations of FCA analogues in 12 states

Name of relator(s): Mary Edwards, a former Amerigroup employee (Outpatient Team Utilization Management Nurse Reviewer from August 2011 to February 2012, a period of seven months)

Defendant’s business: Managed Care Organization (MCO)

Relator’s counsel: Kenney & McCafferty P.C., and Hanley and Grason, LLC

Summary of case: Amerigroup is a multi-state MCO that is contracted to administer benefits under several federal health care programs including Medicare, Medicaid, and Medicare Advantage. The relator alleges that Amerigroup systemically approved claims that were not medically necessary and lacked clinical support in an effort to maintain its contract with the state of Maryland. Specifically, the relator claims that in connection with Amerigroup’s productivity goals and an upcoming audit, Amerigroup pressured its Utilization Management staff to process and approve 20 to 25 cases per day, without exception, and to maintain a low denial rate. The relator also alleges that she was removed from her position reviewing requests for home health care services because Amerigroup believed that her practice of asking providers for additional information regarding the medical necessity of such services created difficulty with its providers, thereby jeopardizing the company’s MCO contract with the state of Maryland.

Current status: The government declined to intervene on July 5, 2013.

Reasons to watch: This case is worth watching because of the relator’s brief tenure at Amerigroup. In recent months, a number of FCA cases have been unsealed involving relators who join a company for a short period of time (less than one year) and then file a qui tam complaint based on limited and vague information. For example, Stephen Mullen has filed qui tam complaints against at least four health care companies, including Ascencion Health and HCA Holdings, Inc. Mr. McMullen filed both cases in May 2012, and the defendants moved to dismiss each case in June and September 2013, respectively, noting that Mr. McMullen was a serial relator who had demonstrated a pattern of working for providers for a short time and then accusing them of technical regulatory violations. Here, the relator worked for Amerigroup for only seven months before leaving the company and ultimately filing the instant complaint, based on events that occurred over a four-month period of time. The government’s refusal to intervene might suggest that this case, like those filed by Mr. McMullen, is based on alleged technical violations for which the relator lacked sufficient factual and legal support given her short tenure with Amerigroup.

Written by:

Mintz Levin - Health Law & Policy Matters

Mintz Levin - Health Law & Policy Matters 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):

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.


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 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:

- 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.