Category Archives: Health Care Fraud

Third Circuit Has Opportunity to Rule on Constitutionality of False Claims Act (FCA)

by Joshua Drew, Ian Herbert, Bradley Markano, and Connor Farrell

Left to right: Joshua Drew, Ian Herbert, Bradley Markano, and Connor Farrell (photos courtesy of Miller & Chevalier)

On July 14, 2025, Janssen filed an appeal to the Third Circuit challenging what it characterized in its brief as the “largest ever” judgment under the federal False Claims Act (FCA): approximately $1.6 billion, including over $1.2 billion in civil penalties and $360 million in treble damages. The scope of liability imposed on the healthcare company, along with unique facts underlying the case, present several important constitutional issues, including Article II-based challenges that the FCA’s qui tam provisions improperly delegate to relators the executive authority to pursue punitive quasi-criminal penalties, as well as whether the penalties imposed violate the Fifth Amendment’s Due Process Clause or Eighth Amendment’s Excessive Fines Clause.

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DOJ Civil Division Prioritizes Illegal DEI

by Jennifer Loeb, Austin Evers, Grace Bruce, and Young Park

From left to right: Jennifer Loeb, Austin Evers, Grace Bruce, and Young Park (photos courtesy of Freshfields Bruckhaus Deringer LLP)

Combatting “illegal” Diversity, Equity and Inclusion (DEI) remains a “Day One” priority in Washington. President Trump issued executive orders on DEI on his first day in office. Attorney General Bondi likewise issued her own memos on her first day at the Department of Justice. And now, the new head of the Department of Justice’s Civil Division has followed suit and issued his own memo on his first day, marking DEI-related topics as two of the Division’s top five priorities. This is yet another indicator that the administration appears to be shifting into the enforcement phase of its DEI reset. Health care and life sciences companies have particular reason to take note.

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Lessons from Hospital Criminal Prosecution for Larger Health Systems and Provider Groups

by Ericka Aiken, Kevin Lamb, and Audrey Sapirstein

From Left to Right: Ericka Aiken, Kevin Lamb, and Audrey Sapirstein. (Photos courtesy of Wilmer Cutler Pickering Hale and Dorr LLP)

Introduction

On January 8, 2025, the U.S. Department of Justice (DOJ) announced that a federal grand jury indicted the Chesapeake Regional Medical Center (CRMC) in Virginia for conspiracy to defraud the United States and health care fraud. In this rare move, DOJ seeks to hold a hospital criminally responsible for alleged fraudulent conduct committed by a physician at the hospital. The indictment alleges that from 2010 to 2019, CRMC and a former obstetrician-gynecologist with surgical privileges at CRMC conspired to defraud the government by performing medically unnecessary operations, submitting inaccurate and false bills, and failing to comply with applicable rules and regulations. According to the indictment, CRMC received approximately $18.5 million in reimbursements from health care benefit programs over that time for procedures performed by the former physician at the hospital.

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PCCE Hosts Senior DOJ Officials for a Discussion of the Newly Announced Corporate Whistleblower Awards Pilot Program

PDAAG Nicole Argentieri. (All photos courtesy of Sam Hollenshead, NYU Photo Bureau)

On September 17, 2024, the NYU Law Program on Corporate Compliance and Enforcement (PCCE) hosted Nicole M. Argentieri, Principal Deputy Assistant Attorney General for the Criminal Division, Brent Wible, Chief Counselor for the Criminal Division, and Molly Moeser, Chief of the Money Laundering and Asset Recovery Section, as well as academics and distinguished counsel, for a discussion of the DOJ Criminal Division’s newly-announced Corporate Whistleblower Awards Program. A link to the details of the program is here. Below are the remarks delivered by PDAAG Argentieri. After Argentieri’s remarks, PCCE Faculty Director Jenifer Arlen led a fireside chat discussion with Brent Wible, followed by a moderated panel discussion that included Molly Moeser, Jane Norberg (Partner, Arnold & Porter Kaye Scholer LLP), Preston Pugh (Partner, Crowell & Moring LLP), Dan Richman (Professor, Columbia Law School), Max Rodriguez ’15 (Principal, Max Rodriguez Law PLCC), and Andrew Weissmann (Professor, NYU Law). Opening remarks were delivered by Troy McKenzie, Dean of NYU School of Law.

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Supreme Court Issues Decision in High-Stakes False Claims Act Case: Outcome and Future Implications

by Kayla Conti

Kayla Conti (Photo courtesy of Kohn, Kohn & Colapinto LLP)

On June 1, 2023, the Supreme Court issued a unanimous decision[1] in the consolidated case of U.S. ex rel. Schutte v. SuperValu, Inc. (“SuperValu”)[2] and U.S. ex rel. Thomas Proctor v. Safeway, Inc. (“Safeway”),[3] holding that subjective intent is relevant for determining whether a defendant acted “knowingly” under the False Claims Act. The Supreme Court reversed the Seventh Circuit’s decisions in favor of Petitioners, which effectively preserves the False Claims Act as a major tool for both prosecuting and deterring fraud. While whistleblowers, taxpayers, and anti-fraud advocates have ample reason to rejoice, the decision left more to be desired by the Department of Justice and many entities who submit claims for payment to federal programs.

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Compliance Mandates in Civil Settlement Agreements—a New Trend?

by Jacob T. Elberg

Neither Carrots nor Sticks: DOJ’s Unfulfilled Commitment to Corporate Health Care Compliance

by Jacob T. Elberg

In October, Deputy Attorney General (“DAG”) Lisa Monaco assured an audience of white collar defense counsel,“[C]ompanies serve their shareholders when they proactively put in place compliance functions and spend resources anticipating problems. They do so both by avoiding regulatory actions in the first place and receiving credit from the government. Conversely, [the Department of Justice] will ensure the absence of such programs inevitably proves a costly omission for companies who end up the focus of department investigations.”[1]

This aspect of DAG Monaco’s speech drew little attention, as the Department of Justice (“DOJ”) has for decades sought to encourage four compliant behaviors in corporate actors: maintenance of an effective compliance program before the onset of government scrutiny (pre-existing compliance program), post-enforcement adoption of an effective compliance program, cooperation with a government investigation, and self-disclosure of misconduct. While DOJ’s public statements reflect a claimed commitment to all four, analysis of DOJ policy and resolved cases makes clear that as DOJ has increasingly prioritized and incentivized the latter three behaviors, the first—an effective pre-existing compliance program, the only one aimed towards stopping fraud before it occurs—has been cast aside in one of DOJ’s highest-profile enforcement areas: health care fraud.

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Virtual Currency Platforms and Ransomware Attacks: OFAC Advisories Highlight Increasing Overlap of Sanctions and Cybersecurity Risks Associated with Virtual Currency Platforms and Ransomware Attacks (Part I of II)

by John Barker, Ronald Lee, Soo-Mi Rhee, Tal Machnes, and Christine Choi

This is part I of a two-part post. For Part II, click here.

In the last few months, the Office of Foreign Assets Control (OFAC) of the US Department of Treasury (Treasury) has issued two advisories that highlight the heightened US sanctions risk associated with cyber related activities, including ransomware attacks and the virtual currency platforms that ransomware payers often use to facilitate payments.

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Carlin Speech Signals DOJ White Collar Enforcement Priorities

by Greg Andres, Uzo Asonye, Martine Beamon, Robert Cohen, Daniel Kahn, Tatiana Martins, Paul Marquardt, Fiona Moran, Paul Nathanson, and Daniel Stipano

Principal Associate Deputy Attorney General John Carlin previewed the Department of Justice’s (“DOJ”) refocused corporate enforcement efforts during a speech on October 5, 2021 at GIR Connect: New York. Carlin’s speech underscored the primary levers a new administration can pull to quickly and meaningfully impact the white collar enforcement space: messaging increased white collar enforcement to relevant stakeholders, instituting new and revising existing policies, creating dedicated taskforces, and increasing resources for white collar enforcement. Carlin addressed each of these categories by outlining key DOJ priorities, including increased enforcement related to sanctions, export controls, and cryptocurrency; continued expansion of international cooperation and coordination; a “surge” in resources, exemplified by a new dedicated FBI squad for Foreign Corrupt Practices Act (“FCPA”), market integrity, and health care fraud investigations; an upcoming review and revision of corporate enforcement policies; continued and increased use of data-driven enforcement techniques; enhanced and expanded international cooperation; and a warning regarding companies’ compliance with subpoenas and the terms of resolution agreements.

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Health Care Fraud Means Never Having to Say You’re Sorry

by Jacob T. Elberg

The Securities and Exchange Commission’s use of “neither admit nor deny” settlements[1] continues to garner significant attention a decade after Judge Rakoff took aim at the policy. Most recently, authors on this blog used data from the Securities Enforcement Empirical Database (SEED) to examine the prevalence of “neither admit nor deny” settlements, as well as admissions of guilt, concluding that the SEC has, “albeit slowly, shifted away from the more aggressive prosecutorial stance instituted under Chair [Mary Jo] White” – a more aggressive stance taken in the wake of criticism from Judge Rakoff,[2] Senator Elizabeth Warren,[3] and countless commentators and scholars.

Strangely, while the SEC’s use of “neither admit nor deny” settlements continues to be the focus of criticism suggesting it is too lenient, there has been no similar criticism of the Department of Justice’s use of the False Claims Act, which plays a parallel role in health care enforcement to that of the SEC’s enforcement of the securities laws. Continue reading →