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DOJ Freezes Collection Of Civil Penalties to Blunt Economic Impact of COVID-19

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DOJ News

DOJ Freezes Collection Of Civil Penalties to Blunt Economic Impact of COVID-19

The US Department of Justice has paused its collection of civil penalty payments until at least May 31, “in an effort to blunt the coronavirus pandemic's economic impact.”

According to a letter sent in late March by Corey Ellis, the acting Director of the Executive Office for US Attorneys US attorneys' offices were directed to stop affirmative civil debt collection. In a follow-up letter on April 13, Ellis said the “suspension of required payments shouldn't be interpreted to mean there is a broader relaxation of enforcement efforts.”

To read the March 31 letter, click here. To read the April 13 letter, click here.

Nursing Home to Pay $10 Million to Settle False Claims Act Allegations

On April 14, 2020, the Department of Justice announced that Ohio-based Saber Healthcare Group LLC and related entities agreed to pay $10 million to resolve alleged violations of the False Claims Act. The DOJ alleged that Saber sought systemically to increase Medicare billings by requiring that all patients be provided with the highest level of therapy (Ultra High), regardless of the patients’ actual therapeutic needs, in order for Saber to receive the highest level of Medicare reimbursement.

The DOJ further alleged that Saber pressured facility directors to ensure therapists provided the Ultra High therapy to each patient, where the therapist believed a lower level of therapy was warranted and caused therapists to report time spent providing unskilled services as time spent on skilled therapy.

The settlement resolves a lawsuit filed under the whistleblower provisions of the False Claims Act by three former Saber rehabilitation therapists and therapy managers who will receive $1,750,000 from the settlement.

In addition to the settlement, Saber entered into a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General that requires an annual independent review of the medical necessity and appropriateness of therapy services Saber billed to Medicare.

See here for the DOJ press release.

Laboratory and Pain Clinic to Pay $41 Million to Resolve False Claim Act Allegations

On April 15, 2020, the DOJ announced that Tampa-based Logan Laboratories, a reference laboratory, Tampa Pain Relief Centers Inc., a pain clinic, and two of their former executives agreed to collectively pay $41 million to resolve allegations that they submitted false claims for urine drug testing to federal health care programs, including Medicare, Medicaid, TRICARE.

The DOJ alleged that, from January 1, 2010, through December 31, 2017, the Defendants knowingly submitted or caused the submission of false claims for UDT to the government when such testing was neither medically reasonable nor necessary. The DOJ contended that the Defendants implemented a system that automatically ordered presumptive UDT (tests that screen for the presence of drugs) and definitive UDT (tests that identify the amounts of drugs in a patient’s system) for all patients at every visit without making a determination that such tests were medically necessary.

The settlement resolves allegations originally brought in two cases filed under the whistleblower provisions of the False Claims Act. The whistleblowers will receive approximately $7.79 million from the settlement.

In addition to the settlement, Logan Laboratories entered into an “Integrity Agreement” and Tampa Pain Relief Centers Inc. entered into a “Corporate Integrity Agreement” with the HHS-OIG.

See here for the DOJ press release.

Louisiana Department of Children and Family Services to Pay Over $3.9 Million to Resolve False Claims Act Violations

On April 10, 2020, the DOJ announced that the Louisiana Department of Children and Family Services (“DCFS”) agreed to pay $3,984,254 to the federal government to resolve alleged False Claims Act violations in connection with the U.S. Department of Agriculture’s (“USDA”) Supplemental Nutrition Assistance Program (“SNAP”), which provides financial assistance to low-income individuals and families for food purchases.  The DOJ alleged that beginning in 2011, DCFS contracted with a consultant to provide advice and recommendations designed to lower its quality control error rate for SNAP benefits to ensure that eligibility determinations were accurate.  The DOJ alleged that these recommendations, as implemented by DCFS, injected bias into DCFS’s quality control process and resulted in false quality control data and information being submitted by DCFS to the USDA.  The DOJ alleged that this ultimately led to DCFS receiving performance bonuses for fiscal years 2012 and 2013, to which DCFS would not have otherwise been entitled. DOJ’s settlement with DCFS is among several others that DOJ has entered into with other state agencies arising from similar conduct; the government has recovered over $36 million across all settlements.

See here for the DOJ press release.

SEC Updates

Former Executive Ordered to Forfeit $10.4M in Connection with Role in Medicare Fraud Scheme

On April 13, 2020, the Securities and Exchange Commission charged the former executive of a financial services company with violations of the Foreign Corrupt Practices Act and federal securities laws.

The SEC alleged that the former executive arranged for his firm’s client, a Turkish energy company, to funnel at least $2.5 million to an intermediary to pay bribes to Ghanian government officials to obtain their approval over an electrical power plant project. The SEC further alleged that the former executive helped the Ghana-based intermediary pay more than $200,000 to various government officials as bribes and that the former executive personally paid $60,000 to members of the Ghanian government. According to the SEC’s complaint, the former executive misled compliance personnel about the intermediary’s purpose in order to prevent the detection of the bribery scheme.

The SEC’s complaint was filed in the US District Court for the Eastern District of New York and seeks monetary penalties, among other remedies, against the former executive.

See here for the SEC press release.


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