Health Care Fraud News: Supreme Court Rejects Drug Company's Request to Limit AntiKickback Statute
An interesting development in health care fraud: pharmaceutical giant Amgen's request that the United States Supreme Court limit one of the government's most powerful tools against fraud, the Anti-Kickback Statute, was rejected by the Court on December 27, 2011. The relief requested by Amgen would have drastically weakened one of the foundations of the False Claims Act. The AKS prohibits a person or a corporation from providing any type of remuneration to a health care provider in exchange for health care services, such as patient treatment, drug prescriptions, the provision of durable medical equipment, imaging studies such as x-rays and MRI's, and other health care services and products payable by a federal government programs, including Medicare, Medicaid or Tricare.
Amgen petitioned the Court to hear a case where it is accused of paying physicians to supply patients with its injectable drug, Aranesp, which is used in the treatment of anemia. The whistleblower in that case alleged that payments were made to physicians in the form of sham consulting arrangements and all-expense paid weekend seminars to attractive locales in order to get induce them to prescribe the drug. The physicians were also paid by Medicare and Medicaid for 'overfill' of Aranesp that was provided to them free of charge by Amgen. In both situations, the physicians received a benefit intended to influence them to prescribe Aranesp, which appears to be precisely the reason that Congress passed the AKS in the first place.
Amgen was disappointed by the decision of the First Circuit Court of Appeals to permit the case to proceed to trial. Amgen's petition to the Supreme Court attempted to exploit the confusion that has been created in the federal courts by differing opinions on the requirements necessary to prove a violation of the AKS. The drug company asserted that its claims were not fraudulent because the payors (CMS or the fiscal intermediary acting on its behalf) went ahead and paid the claims without objection. Alternatively, Amgen argued that there must be a federal regulation that expressly prohibits the payment of such claims; otherwise, the statute does not apply.
Amgen in its petition claimed that the circuit courts of appeal are "hopelessly split" over "the right approach" to what it calls the "theory of implied certification." Implied certification is a legal theory that was developed in response to fraudsters who have argued that, in order for there to be a false claim, the payee must expressly certify that it has complied with the law in its payment requests, and, absent that express certification, there can be no false claims.
The final sentence of Amgen's petition to the U.S. Supreme Court staked out its position that the qui tam provisions of the False Claims Act, which permit private whistleblowers to proceed on behalf of the government, should be eliminated: "giving private parties the power to use the FCA to enforce obligations purportedly imposed on government contractors by their contracts, statutes or regulations would inevitably undermine the government's ability to administer its own programs and contracts in a consistent and efficient." In other words, we do not need a False Claims Act as it exists now because the government is already doing a wonderful job all on its own. But the truth is that the existing regulatory framework has failed miserably to control health care fraud. To argue otherwise is to ignore the billions of dollars in stolen federal funds recaptured in recent years by means whistleblower complaints filed pursuant to the FCA, the myriad Corporate Integrity Agreements that drug companies, hospitals, corporations and medical clinics have been required to sign, and the many states passed that have in recent years passed their own state False Claims Acts. Fortunately, the Supreme Court is declining to hear Amgen's arguments. The case will now get returned to the U. S. District Court in Massachusetts.
