On February 23, 2022, the Federal Bar Association (FBA) kicked off its fifth annual Qui Tam Conference to highlight key areas for False Claims Act (FCA) enforcement in the coming year. The conference opened with a keynote address by Gregory E. Demske, Chief Counsel to the Inspector General, Department of Health and Human Services (HHS), Office of Inspector General (OIG). Then, a series of panels analyzed the FCA-related developments from the prior year, recent efforts by the U.S. Department of Justice (DOJ) to combat cybersecurity fraud, and some of the schemes promoting alleged telehealth fraud during the ongoing COVID-19 public health emergency. Based on the comments of government speakers, all speaking in their individual capacities, below are key takeaways of what we expect the government to prioritize in 2022:
Pandemic-related fraud and telehealth fraud are key targets
Reinforcing the DOJ’s current enforcement priorities, we expect the DOJ to continue to focus its resources and enforcement activity on where it stands to recover the most dollars swiftly: pandemic-related fraud (e.g., misuse of CARES Act relief funds) and telehealth fraud.
During his keynote address, Demske similarly acknowledged these two areas of focus and added Medicare Advantage, the opioid epidemic, and nursing homes as ongoing priorities for OIG enforcement. Notably, Demske cited OIG’s Data Analytics Group as a robust resource for the agency to identify anomalies in large data sets (e.g., outlier distributions of CARES Act provider relief funds) that may lead to targeted enforcement.
For more information about the fraud and abuse implications of CARES Act provider relief funds, as well as practical tips for navigating the evolving CARES Act regulatory environment, please check this Reed Smith client alert.
Amicus briefs reveal the government’s position on the evolving FCA landscape
During the conference’s year-in-review panel that surveyed 2021’s substantive, procedural, and policy developments related to the FCA, which have largely favored defendants, a government panelist reminded practitioners of the DOJ’s different view, expressed in amicus briefs filed in several of the trending FCA cases, as to whether courts should adopt the Safeco objective reasonableness standard in the context of the FCA. With respect to the government’s current view on the Rule 9(b) heightened pleading standard in the FCA context, the Supreme Court recently requested a government brief expected to be filed by the U.S. solicitor general in Estate of Helmly v. Bethany Hospice & Palliative Care of Coastal Ga., LLC.
Cybersecurity fraud is an FCA growth area, but telehealth fraud is flourishing now
Panels addressing cybersecurity fraud and telehealth fraud discussed the nuances of each in the FCA context and conveyed different levels of current FCA enforcement activity. The cybersecurity panel noted that the use of the FCA to combat cybersecurity fraud, while top-of-mind, was a relatively new concept for both the relators’ bar and the defense bar and an expected FCA growth area in the coming years. The telehealth panel, by contrast, explained that the use of the FCA to combat telehealth fraud is occurring at a tremendous pace. For example, two prominent telehealth fraud scheme patterns the DOJ has confronted and prosecuted to date have resulted in multiple billion-dollar takedowns.
Build and maintain a robust compliance program, and take actions to support it
Throughout his keynote speech, Demske consistently reiterated the need for companies to have a robust compliance program, and asked attorneys counseling such companies to help ensure real compliance, with leadership taking actions to support it. Notably, when responding to an audience question about what types of certifications companies make that could become new sources of FCA exposure, Demske broadly noted that any certification could support false claims. Although not all certifications may be material to the government’s payment decision, which often requires taking discovery from the government in the course of litigation, companies would be wise to timely assess their potential FCA vulnerabilities.
Whether seeking to set up a new compliance program or bolster an existing one, companies at any stage should not hesitate to reach out to Reed Smith to ensure they are following best practices, including at the system-level where applicable, to avoid triggering any OIG and DOJ enforcement activity.
Continued and increased FCA enforcement likely ahead
Although FCA case filings dropped from 675 in 2020 to 598 in 2021—likely related to the pandemic—FCA enforcement remains active and is expected to increase. We at Reed Smith expect a sharp uptick in FCA enforcement activity in 2022 as the workforce increasingly returns to an in-office or hybrid setting, which would give potential whistleblowers increased opportunity to scrutinize files, access documents, and engage in water-cooler discussions that may prompt allegations of fraud.
Should you have any questions related to the False Claims Act, including creating and improving compliance frameworks or navigating government enforcement activity, please do not hesitate to reach out to our team or the Reed Smith attorney with whom you are working.