We had a chance to moderate and participate in a webinar with leading colleagues John Harig, Tim Fry, David Pivnick and Brett Barnett regarding key Anti-Kickback Statute and Stark Law issues facing health systems, surgery centers, dialysis providers and other healthcare providers and investors. Below are 10 key thoughts discussed during the webinar as to fraud and abuse issues in play in 2018.
1. The reading and implementation of the "Yates Memo" issued by the U.S. Department of Justice will influence how the government aims to prosecute individuals in addition to companies.
2. The reading of the U.S. Supreme Court's Escobar decision will influence whether defendants in false claims cases will receive some relief from technical billing violations that are not fundamental or material to the government's paying of a claim.
3. Regulators and potential buyers are focused on "creative marketing arrangements" by physician practices, often related to laboratory and/or pharmacy arrangements.
4. Government enforcement agencies and potential buyers are focused on physician compensation arrangements, particularly their compliance with the Stark Law.
5. Potential buyers face a challenge in determining how deeply to examine targets' past practices through billing and coding audits, as well as how to handle the results of billing and coding audits in negotiation of transactions.
6. Private equity buyers face challenges in their evaluation of risk posed by regulatory issues and how to address regulatory risks in a seller's market.
7. Sellers present the historical legal analysis of fraud and abuse issues during the due diligence process, particularly when the legal analysis is positive, but assumptions underlying the legal analysis do not align with the sellers' actual operations.
8. The turnover in the U.S. Department of Justice may impact the timing of fraud and abuse prosecutions and settlements.
9. Recoveries by the government resulting from fraud and abuse prosecutions have increased in magnitude. Furthermore, there are more recoveries coming from cases in which the government has not joined in the case with the relator.
10. The wide array of laboratory arrangements and businesses hold implications for fraud and abuse laws.