From the government dedicating more resources to prosecuting violations of the False Claims Act to plaintiffs being creative in attacking companies with data privacy issues, here are four major healthcare litigation trends to know.
Increased False Claims Act enforcement
There has been an explosion of False Claims Act cases in the healthcare industry in recent years, and a significant number of those cases have been brought under the qui tam, or whistle-blower, provisions of the Act, which allow people with evidence of fraud against the government to sue on behalf of the government. In the healthcare industry, many whistle-blowers are employed by or were previously employed by the organization they are exposing for fraud.
The financial incentives provided to whistle-blowers who file successful lawsuits under the False Claims Act is one of the factors contributing to the spike in these types of cases. "Whistle-blowers and their attorneys are being aggressive and bringing new and creative claims," says David J. Pivnick, an attorney with McGuireWoods. In 2014, there were more than 700 False Claims Act cases filed by whistle-blowers.
Mr. Pivnick says a strong plaintiff's bar is also contributing to the growing number of cases being filed, as many law firms across the nation are making False Claims Act lawsuits one of their areas of expertise.
Whistle-blowers and their attorneys aren't the only ones who have financial incentives for filing False Claims Act lawsuits, as the government's investment in these cases was estimated to be 20 to one in October 2013.
The government has increased its budget to fight fraud, and its investment is paying off. The U.S. Department of Justice obtained a record $5.69 billion in settlements and judgments from civil cases involving fraud and false claims against the government in fiscal 2014.
More aggressive merger review by the FTC
The Federal Trade Commission has been successful in challenging several hospital mergers and other integration combinations in recent years, whereas in the past, hospital mergers did not warrant much review.
There have been several high-profile healthcare antitrust cases in the headlines over the past year, such as the one involving Toledo, Ohio-based ProMedica Health System. The system appealed the ruling that blocked its acquisition of Maumee, Ohio-based St. Luke's Hospital to the U.S. Supreme Court.
With rampant consolidation in healthcare, the FTC is going to continue to have its eye on the industry, and that was made clear at a recent workshop held by the FTC and the Department of Justice's Antitrust Division. Certain provisions of the Patient Protection and Affordable Care Act seem to promote integration in the healthcare industry and also provide incentives for collaboration. However, at the workshop, both agencies rejected any arguments that enforcement of antitrust laws would take a back seat to any PPACA provisions.
Data breach litigation in the spotlight
The healthcare industry is being transformed through the increased use of technology. However, as more patient information is stored electronically, the threat of data breaches becomes greater.
"There has been and continues to be high-profile data breaches inside and outside of the healthcare industry," says Holly Carnell, an attorney with McGuireWoods, and that is leading to data breach litigation being in the public eye.
For instance, less than 24 hours after health insurer Anthem announced it had experienced a data breach that involved hackers stealing the data of as many as 80 million of its current and former customers, the company began being hit with lawsuits over the incident.
HIPAA goes to court
"Even though there is not a private right of action under HIPAA, plaintiffs are finding creative ways to attack healthcare companies that have issues with data privacy," says Ms. Carnell.
That creativity is illustrated in Byrne v. Avery Center for Obstetrics & Gynecology. In that case, the plaintiff received treatment from the OB/GYN center, whose privacy policy stated a patient's health information would not be disclosed without their authorization. The father of the plaintiff's child filed a paternity action, which included a subpoena. The OB/GYN center complied and sent the medical records to the family law court without telling the plaintiff. The father of the plaintiff's child reviewed the records and allegedly harassed and threatened the plaintiff.
The plaintiff then sued the OB/GYN center for statutory negligence, common law negligence and negligent infliction of emotional distress. Although the trial court dismissed the claims, the Connecticut Supreme Court reversed the decision, saying that HIPAA does not preempt state law negligence actions for patient confidentiality concerns, and that instead state laws are complementary to or more stringent than HIPAA.
Learn more about these trends and others at the McGuireWoods Annual Healthcare Litigation Conference May 6. Click here for more information about the conference and to register.