Anti-Kickback Statute and the False Claims Act enforcement is entering a new era — turning away from enforcement of COVID-10 pandemic-era fraud, Law.com reported Nov. 7.
The recent reelection of Donald Trump is unlikely to shift AKS' role as a major weapon in the Department of Justice's "arsenal of healthcare fraud enforcement," the report said. But for life sciences and other health services companies, AKS enforcement is entering a new era.
"As new modalities and forms of finance continue to develop within the industry, the coming years promise to shift the terrain on the compliant marketing and delivery of health services," the report said. "Industry participants should examine and reinforce their compliance strategies to account for an expected uptick in enforcement activity amidst these changing conditions."
Here are 10 things to know:
1. The Justice Department prioritized investigating fraud related to COVID-19 congressional appropriations, leading to criminal pleas and convictions but relatively low civil recoveries.
2. The report anticipates that the Justice Department and HHS' Office of Inspector General will heighten enforcement against unlawful marketing and referral practices, including Stark law enforcement.
3. HHS recently requested an increase in investigator funding, citing a"critical shortage" of investigators. In February, the Justice Department's Principal Deputy Assistant Attorney General Brian Boynton said that the organization will continue "to play a lead role in preventing such inducements from undermining the objectivity of physicians and other providers who participate in federal health care programs."
4. In the United States on behalf of Hart v. McKesson, the court ruled that AKS violations require proof that the defendant knowingly engaged in unlawful conduct, potentially making it harder to prove cases solely based on giving or receiving value in health services.
5. Courts are split on the causation standard for AKS violations, which could make it easier for a party under investigation to challenge the potential damages. Courts are also split on whether it is sufficient that a service was influenced by a prohibited payment or if it must be shown that "but for" the payment, the claim would not have been submitted.
6. There's also a push for courts to soften their strict "one purpose" standard (where any single improper purpose constitutes a violation). A potential shift to considering all purposes for an arrangement could prevent punitive penalties based on minimal evidence.
7. The Supreme Court’s recent decision in Loper Bright v. Raimondo overturning the Chevron deference limits judicial deference to agency interpretations of ambiguous statutes, which could lead lower courts to independently interpret the AKS and Stark law, rather than rely on HHS-OIG guidance.The ruling requires courts to exercise independent judgment when reviewing an agency's interpretation of a statute rather than deferring to that agency's interpretation, which opens the door for different interpretations surrounding Stark law based on prior litigation. Recently, a West Virginia federal district court dismissed a false claims lawsuit filed against Thomas Health System, citing insufficient detail in the plaintiff's allegations. In September, the same judge addressed the case, indicating that it could not proceed without additional briefs from the parties on how the recent Supreme Court decision in Loper Bright impacts the claims.
8. Life sciences and healthcare companies should bolster their compliance efforts by documenting the medical justification, fair market value, and necessity of their marketing and business arrangements, according to the report. Including compliance professionals in business decisions, particularly around revenue-generating activities, is crucial to avoiding Justice Department scrutiny and potential whistleblower actions.
9. Establishing, documenting and following a genuine compliance program can be a strong defense against AKS allegations, the report said. Consulting HHS-OIG’s guidance and adapting it to the company's operations is recommended to mitigate risks.
10. "A business organization that puts decision-making entirely in the hands of salespeople or other revenue-generating professionals, and omits or ignores the input of a compliance professional, is a tried-and-true point of argument for the Department of Justice and a red flag for jurors," the report said. "A marginalized or terminated compliance officer can become a whistleblower."