backU.S. Supreme Court Allows Justice Department to Dismiss Whistleblower Cases – On June 16, 2023, the U.S. Supreme Court affirmed that the DOJ properly secured a dismissal of a whistleblower suit accusing Executive Health Resources Inc. of violating the False Claims Act by improperly billing Medicare. The case resolves a circuit split concerning DOJ’s authority to intervene and dismiss an FCA case, holding that courts are to apply the voluntary dismissal standard of Rule 41 in evaluating cases in which the government moves to dismiss.
The False Claims Act’s qui tam provision encourages whistleblowers to file suit on behalf of the government. The law also provides the government the option to take control of the case by intervening or to allow the whistleblower to proceed. DOJ has recovered over $70 billion under the FCA since 1986, with most recoveries driven by whistleblower lawsuits.
Under the FCA, the DOJ may move to dismiss a whistleblower suit by intervening in the case and providing notice, after which the whistleblower is provided an opportunity for a hearing on the motion. 31 U.S.C.§ 3730(c)(2)(A). In United States ex rel. Polansky v. Exec. Health Resources Inc., No. 21-1052, 2023 WL 4034314 (U.S. June 16, 2023), the whistleblower argued that an appeals court mistakenly dismissed the case because the government failed to properly intervene at the outset of the case before it moved for dismissal.
In an 8-1 decision written by Justice Elena Kagan, the Supreme Court held that “the Government may seek dismissal of an FCA action over a relator’s objection so long as it intervened some time in the litigation, whether at the outset or afterward.” Id. at *3. The majority opinion also held that courts “should apply the rule generally governing voluntary dismissal of suits: Federal Rule of Civil Procedure 41(a).” Id. The Court held the government’s authority to dismiss is not completely unfettered, but it is entitled to “substantial deference.” The Court further explained that “[i]f the Government offers a reasonable argument for why the burdens of continued litigation outweigh its benefits, the court should grant the motion. And that is so even if the relator presents a credible assessment to the contrary.” Id.
Justice Kagan was joined in the opinion by all justices except for Justice Clarence Thomas, who filed a dissenting opinion that raised concerns about the FCA’s constitutionality. Justice Brett M. Kavanaugh filed a concurring opinion, which was joined by Justice Amy Coney Barrett.
The U.S. Supreme Court’s opinion can be found here.
Reporter, Michelle Huntsman, Houston, +1 713 751 3211, mhuntsman@kslaw.com.
Hospital Settles HIPAA Investigation Over Allegations of Medical Record Access by Security Guards – On June 15, 2023, OCR announced a settlement with Yakima Valley Memorial Hospital (Yakima) after completing a HIPAA investigation regarding allegations that hospital security guards accessed medical records of 419 patients. Yakima voluntarily resolved the matter by agreeing to pay $240,000 and implement a corrective action plan to train its workforce and update its policies and procedures to safeguard its protected health information (PHI).
OCR began investigating Yakima in May 2018 after receiving a breach notification report alleging that twenty-three emergency department security guards accessed patient medical records without a job-related purpose.
Yakima’s voluntary resolution of the matter resulted in a resolution agreement and corrective action plan that included no admission of liability. Under this agreement, OCR will monitor Yakima for two years to ensure compliance with the HIPAA Security Rule. In this resolution, Yakima also agreed to take the following steps:
- Conduct a risk analysis regarding the security risks and vulnerabilities to electronic PHI;
- Develop a risk management plan to address and mitigate the identified risks and vulnerabilities;
- Develop, maintain, and revise written HIPAA policies and procedures;
- Distribute HIPAA policies and procedures to all members of the workforce with access to PHI, and obtain signatures from workforce members regarding compliance with the policies;
- Enhance HIPAA and Security Training Program to update workforce on compliance with HIPAA policies and procedures;
- Review vendor and third-party service provider relationships to identify and obtain business associate agreements;
- Promptly investigate the failure of a workforce member to comply with HIPAA policies, and report material failures to HHS within thirty days;
- Submit an Implementation Report to HHS within 120 days after receiving HHS’s approval of the risk management plan, policies, procedures, and training materials; and
- Submit Annual Reports to HHS within sixty days after the end of each one-year period during the course of compliance obligations.
The HHS announcement can be found here. The resolution agreement and corrective action plan can be found here.
Reporter, Lindsay Greenblatt, Los Angeles, +1 213 218 4032, lgreenblatt@kslaw.com.
King & Spalding Client Alert: Supreme Court Rejects Government’s Broad Use of the Aggravated Identity Theft Statute to Impose Two-Year Mandatory Minimum Sentences in Fraud Cases
The aggravated identity theft statute, 18 U.S.C. §1028A, imposes a mandatory two-year sentencing enhancement upon a defendant who “uses” without lawful authority another’s means of identification “during and in relation to” an enumerated predicate felony. Healthcare fraud, mail fraud and wire fraud are some of the enumerated predicate felonies. Because “use” can mean many things and most fraud fact patterns involve some use of a person’s means of identification, the government has taken an expansive view to the application of this statute in fraud cases. On June 8, 2023, the Supreme Court addressed the meaning of the word “use” under this statute in Dubin v. United States, rejected the government’s expansive view of the statute, and limited its application.
More about this statute can be found here.
ALSO IN THE NEWS
Last week, CMS launched a consumer-friendly web portal meant to inform the public of their rights under the federal No Surprises Act (NSA) and how to participate in the uninsured/self-pay dispute process, including information on how to connect with the No Surprises national hotline (1-800-985-3059). The portal also includes a page designed to provide patients with an “action plan” to use to resolve issues with their medical bills.