New Frontiers and False Claims Act Settlements Discussed at Second Day of Recent Developments Program

On March 31, the Recent Developments in False Claims Act Litigation program concluded at Suffolk University with two panels discussing new frontiers in liability and emerging trends in causation, claims analysis and settlements in False Claims Act cases. Each panel featured leaders in the field, including several government attorneys. While all sides of False Claims Act cases were presented, Greene LLP attorney Ilyas J. Rona wound up the program with a close look at the experience of whistleblowers, substantiating the importance of their involvement in cases that involve industries particularly prone to fraud on the government, particularly health care. Mr. Rona submitted a paper for the program backed by litigation statistics and feedback from False Claims Act whistleblowers entitled “The Whistleblower Perspective: Why They Do It, and Why We Need Them.”

After program chair and moderator Thomas M. Greene introduced the members of the first panel, Assistant United States Attorney Paul Levenson led off the evening with a description of the SEC’s new whistleblower regulations, which have been proposed and are due to become final in less than three weeks. Mr. Levenson, who serves as Chief of the Economic Crimes Unit of the U.S. Attorney’s Office in Massachusetts, commented on the “tug of war that has erupted” over the SEC’s proposed regulations, and noted that unlike False Claims Act cases and the IRS whistleblower program, the conduct potentially at issue which could result in rewards for SEC tipsters does not necessarily involve fraud on the government. Attorney Suzanne Durrell then presented on the changes made by the Patient Protection and Affordable Care Act on health care providers’ obligation to return Medicare and Medicaid overpayments. Marty Murphy of Foley Hoag and Assistant United States Attorney Susan Winkler, Chief of the Criminal Division’s Health Care Fraud Unit in Massachusetts, concluded the first panel with a discussion of increasing efforts to hold executives in the health care industry accountable through criminal prosecutions. In particular, the discussion honed in on an apparent revival of the Park doctrine, through which executives may be prosecuted for misdemeanors due to the conduct of their companies.

Robert Patten, Managing Attorney in the Medicaid Fraud Division of the Massachusetts Attorney General’s Office, started the night’s second panel with a discussion of parallel civil and criminal investigations in False Claims Act cases. Mr. Patten cited the “strong link” between both types of investigation, noting that like most state Medicaid Fraud Units, his office has both civil and criminal authority. In fraud cases in which there may be criminal conduct with national implications, the federal government generally takes the lead; Assistant United States Attorney Zachary Cunha, Deputy Chief of Affirmative Civil Litigation in the Massachusetts United States Attorney’s Office, explained that when the United States Attorney’s Office picks a track for investigations, they must then be careful that information is not improperly disseminated between civil and criminal divisions. Panelist Brien O’Connor, a partner at Ropes & Gray in Boston, credited the skill of both state and federal attorneys, noting that investigations are often “very much a joint federal and state effort.” Mr. O’Connor highlighted the additional role played by the Office of the Inspector General of the Department of Health and Human Services, which has authority to exclude individuals and companies from participation in government health care programs.

Mr. O’Connor also introduced many of the intricacies in False Claims Act settlement negotiations, leading to a lively discussion among the panelists. Mr. Cunha noted that whether the federal government has intervened becomes a main determinant in how settlement discussions progress, that claims data is often a big factor and that defendants typically want a global resolution in settlement negotiations. Mr. Patten added that coordinating the claims of all participating states is a difficult process because only sovereign states can sue under their own false claims laws, and because “some states don’t have the same arrows in their quiver” that Massachusetts has. The panel concluded with Mr. Rona’s presentation on whistleblowers and their perspective, which drew questions from program attendees.

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