DOJ announces FCA enforcement priorities at HCCA conference

On October 30, 2017, Michael Granston, director of the Civil Fraud Section of the Commercial Litigation Branch at the Department of Justice (DOJ), announced what appears to be a policy change in how DOJ treats qui tam cases that the DOJ concludes lack merit. The announcement was made at the Health Care Compliance Association’s (HCCA) Health Care Enforcement Compliance Institute in Washington, D.C. Instead of allowing declined qui tam cases to proceed if the relator (i.e., whistleblower) chooses to do so with his or her own resources, Granston indicated that the DOJ will now file a motion to dismiss such lawsuits. While the DOJ has always had the statutory power to dismiss False Claims Act (FCA) cases, it has rarely done so in the past, instead sitting on the sideline and monitoring the cases in which they chose not to intervene. The policy shift is apparently based on the DOJ’s recognition that frivolous FCA litigation is a burden on the government, the courts and the health care industry.

In addition to this policy shift, Granston announced additional priorities for the DOJ’s Civil Fraud Section for the next year, including (1) examining issues related to electronic health record software (whether the software documents information properly and whether the software qualifies for incentive payment programs); (2) reviewing diagnosis coding under the Medicare Advantage program; and (3) pursuit of cases involving billing for substandard care (particularly in skilled nursing facilities).

The DOJ will also devote resources to resolving two open issues in pending litigation. The first is the Aseracare Hospice case, in which the judge held that if there is a dispute about medical necessity and an expert testifies that the care is necessary, the government cannot prevail in its FCA case. In the other case, the DOJ will push for courts to allow statistical sampling in FCA cases.