Northern Ohio Health System Pays $21 Million to Settle FCA Allegations

A regional hospital system in Akron, Ohio, Akron General Health System (AGHS) reached a $21.25 million settlement over allegations that an improper physician referral arrangement violated the Anti-Kickback Statute, Physician Self-Referral Law, and the False Claims Act (FCA).

Between August 2010 and March 2016, AGHS allegedly paid above-market value compensation to regional physician groups for securing referrals for patients and then submitted claims for services provided to the illegally referred patients. Such payments for referrals were alleged to be in violation of the Anti-Kickback Statute, which prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by federally funded programs and the Physician Self-Referral Law, also known as the Stark Law, which prohibits a hospital from billing Medicare for certain services referred by physicians with whom there is an improper and/or above market value financial compensation arrangement. Finally, the submission of claims for compensation for the illegally referred patients was allegedly in violation of the FCA.

The DOJ press release can be found here.

Fifth Circuit Rejects Revival of FCA Suits Against Eli Lilly and Bayer

On Wednesday, the Fifth Circuit declined to revive two FCA lawsuits against drugmakers Eli Lilly and Co., Inc. and Bayer Corp.

Entities comprising the National Healthcare Analysis Group filed lawsuits under the FCA accusing the drug makers of improperly providing doctors’ offices with free nursing and insurance services, which caused pharmacies to submit kickback claims to Medicare and Medicaid. The DOJ previously moved to dismiss the case over the whistleblowers’ objections, following a 2018 Trump Administration push to dismiss “meritless” or “parasitic” lawsuits, and the whistleblowers alleged the DOJ acted arbitrarily in seeking to dismiss the cases. The Fifth Circuit found the government met its burden in showing its dismissal was for a proper government purpose and that the allegations lacked sufficient merit to justify the cost of further litigation, the continuation of which could undermine government policies.

The case citation is United States v. Eli Lilly & Co., Inc., No. 19-40906, 2021 WL 2821116 (5th Cir. July 7, 2021).