Background - Practices (Details)

Health Care Fraud and Abuse


Crowell & Moring's health law practice includes nationally recognized health care fraud counselors, and civil and criminal litigators. Our team is made up of members of our Health Care, White Collar and Regulatory Enforcement, and Government Contracts practice groups, who together establish the firm as a formidable advocate for health care clients grappling with fraud and abuse issues. We provide effective and experienced services to clients dealing with the complex and potentially devastating risks associated with fraud and abuse investigations and prosecutions. Our firm's presence in Washington, D.C. provides us ready and regular access to key federal enforcement agencies such as the U.S. Department of Health and Human Services' Office of the Inspector General (HHS-OIG) and the Department of Justice (DOJ), while our intimate understanding and experience in dealing with the federal False Claims Act, the Anti-Kickback Statute, and the Physician Self-Referral Law (or Stark law) permits us to advise and counsel clients on these substantive areas, regardless of location, through lawyers based in our Los Angeles, San Francisco, Orange County and New York offices.

Our lawyers recognize the value clients receive by avoiding potential fraud and abuse issues in the first place. We frequently assist our clients in the negotiation and crafting of business transactions that eliminate or minimize fraud and abuse risks at the outset. For established clients, our compliance counselors are often called upon to assist with the development and review of compliance plans and programs. We are also experienced in undertaking internal compliance audits and investigations frequently focused on identified fraud "risk areas."

Despite best efforts, the broadening web of fraud and abuse risks can sometimes result in the need to defend our clients in high-stakes, adversarial proceedings. When a client is confronted with serious fraud and abuse challenges — perhaps first signaled by receipt of an OIG or grand jury subpoena or a search warrant — we are often retained initially to not only respond to the demand, but to undertake an internal investigation in order to more fully assess the scope and gravity of the potential problem. We are experienced in conducting these complex and delicate investigations thoroughly, discreetly, and efficiently. When government enforcement agencies are involved in the matter, we are prepared to deal with these agencies in a direct, professional manner. Based on our experience and numerous interactions with these prosecutorial bodies, we can often be successful in convincing the government that no enforcement action is necessary.

On other occasions, we may recommend that the client seek to resolve a matter through settlement prior to trial. When we do so, we focus on negotiating global settlements that impose the least impact to our clients' businesses. We keep in mind the burdens of not only the financial aspects of settlement, but of other important parallel considerations, including potential program exclusions and other administrative sanctions.

There are some situations in which negotiating a settlement is simply not in a client's best interests. In these cases, we do not hesitate to proceed to trial, and mount strong and aggressive defenses. Our fraud and abuse litigation team consists of a number of experienced civil and white collar criminal defense lawyers and former federal prosecutors with experience that includes service as the coordinator of the government's Medicare Fraud Strike Force. These lawyers are well versed in the unique subject matter that is often the focus of health care fraud litigation, including not only the federal False Claims Act and its unusually broad application to the health care field, but other statutes unique to the health care industry as well. Teaming with our experienced health care regulatory and government program practitioners, we bring to any litigation engagement the optimum combination of significant trial experience and substantive knowledge.

Our fraud and abuse clients are representative of all components of the health care marketplace, including hospitals and hospital systems, managed care plans, medical device manufacturers, group purchasing organizations, payors, government contractors, and individual defendants. We maintain a close watch over new legal developments as the government continues to refocus its enforcement efforts on new theories of liability and on new targets. Our fraud and abuse practitioners provide our clients with updates on these new initiatives and how they may affect our clients' businesses through frequent client alerts, client conferences, and other media.

We also are called upon frequently by professional associations such as the American Health Lawyers Association and the American Bar Association to speak and write on health care fraud and abuse issues in various national forums. These engagements provide us unique, informal opportunities to interact with government representatives and industry experts, thereby adding to our insight into the government's priorities and strategies in the complex area of fraud and abuse enforcement.

Representative Matters

  • Lead antitrust counsel for Coventry Health Care, Inc., in its pending $7.2 billion acquisition by Aetna Inc. The combination of two of the largest 10 commercial health insurance companies in the country is subject to antitrust review by the Department of Justice Antitrust Division.
  • Work with 19 hospital regional health care system on legal and operational compliance and defense against government investigations concerning federal health care program anti-kickback statute and regulations, the federal prohibition on physician self-referrals (the "Stark Law"), related civil monetary penalty laws, and Medicare billing rules and regulations, e.g., provider-based billing requirements and hospital outpatient supervision requirements.
  • Represented Health Net in renegotiation of its pharmacy benefits management arrangements with Caremark CVS and the $160 million sale of Health Net's Medicare Prescription Drug Plan business to Caremark CVS and in securing clearance from the Department of Health & Human Services Centers for Medicare & Medicaid Services and the Antitrust Division of the Department of Justice.
  • Successfully defended Health Net against a putative class action complaint alleging a price-fixing conspiracy under California's Cartwright Act and Unfair Competition Law. Plaintiffs, a group of independent retail pharmacies, alleged that Health Net had entered into a conspiracy to not reimburse patients or their pharmacies for generic versions of Lipitor. Crowell & Moring convinced the plaintiffs to dismiss Health Net without any compensation or remedy, before filing of a motion to dismiss, based on a presentation of facts demonstrating that our client had not engaged in the alleged anticompetitive misconduct. 
  • Defense of client in the first action by a State Attorney General under 2009 amendments to the HIPAA statute. The Connecticut Attorney General sued our client based on the disappearance of a portable disk drive from a Connecticut facility containing 32 million pages of patient information. After months of negotiation, a favorable settlement was reached for the client, acknowledging the measures that our client had voluntarily taken to protect the identity and credit of its members.
  • Internal review of a major national health insurer's compliance with the new medical loss ratio (MLR) requirements under the Affordable Care Act health reform law.
  • Representation of an attorney and law firm that are under investigation by the Department of Justice for his/their role in issuing a legal opinion to a hospital client concerning the legality of a hospital-physician group relationship. The government asserts separately that the hospital-party to the hospital-physician group arrangement violated the Stark Law and the False Claims Act, and that the attorney and law firm who represented the hospital in this matter are also potentially liable for these violations. The focus of the Department of Justice on whether an attorney's legal opinion can be a False Claims violation raises unprecedented issues.
  • Representing a hospital responding to a federal investigation into whether the hospital paid kickbacks to cardiologists in exchange for patient referrals through free rent, higher than appropriate medical director compensation or other measures.
  • Representation of a major medical device manufacturer in responding to a whistleblower complaint alleging that the company paid kickbacks to certain "group purchasing organizations" (GPOs) in order to qualify its medical devices for eligibility for purchase by the GPO's hospital members. The whistleblower alleged that the numerous hospitals who bought these products filed false claims for Medicare payment when they certified on their claims for payment that the services for which payment was sought were provided "in accordance with applicable law."
  • Counsel a large health insurer regarding a possible defined contribution health arrangement for a Fortune 100 company, addressing the meaning of "insurance" for purposes of Internal Revenue Code section 105 and various nondiscrimination concerns.
  • Provide counsel to large insurers, trade associations, and third-party administrators regarding implications to their business of health reform legislation, the Patient Protection and Affordable Care Act (PPACA). Engage in advocacy before various federal agencies (including the Departments of Treasury, Labor, and Health and Human Services) on behalf of trade associations and other entities with respect to PPACA.
  • Obtained dismissal of patent infringement claim against our clients, one of the world's largest generic drug manufacturers. On appeal, the Federal Circuit agreed with the district court that the FDA had only approved one of the drug's three effects, contraception, which was not protected by any patent. This decision allows generic drug companies to enter the market with a generic – and substantially less expensive – version of a beneficial drug, but also provides guidance to all pharmaceutical companies on the interplay between the scope of FDA approval for a drug's use and the enforcement of patents relating to the use of the drug, in particular whether a method-of-use patent listed in the FDA's "Orange Book" is properly asserted in a Hatch-Waxman litigation against a generic applicant.