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Speaker 1 (00:00):
Speaker 2 (00:04):
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Speaker 3 (00:27):
Uh, welcome everyone
to today's American Health Law
Association podcast, where I'llbe talking to Crane Pomerantz
about healthcare fraud andabuse investigations. Uh, crane
is an attorney with Clark Hilland is located in Las Vegas.
He's a former federalprosecutor, and his practice
focuses on healthcare fraud andabuse matters , uh, including
(00:48):
criminal defense, civillitigation , uh, regulatory and
transactional work. And I lasttalked in a podcast back in
August of 2023 , um, about, youknow, crane's practice and
about , um, settlements aswell. Um, he's the author of
the ALA's, recently updatedthird Edition of Health , the
(01:11):
Healthcare Fraud AbuseInvestigations Handbook. And
we're excited to hear about ,uh, any updates he has in the
fraud and abuse andInvestigation world, and also
about that book as well. So, a, a lot has happened since we
talked back in 2023. Um, we'vehad criminal and civil
enforcement, we've had shiftsin interpretations under the
False Claims Act , uh, therollout of new compliance,
(01:35):
guidance from the OIG and , andimplementation of that guidance
, uh, stark in and kickbackdevelopment, self disclosures ,
uh, settlements, new advisoryopinions. So , so lots of
activity , uh, in this area.
And it's, it's definitelyimpacted , um, healthcare
organizations , uh, goingforward here in 2025. And
(01:56):
they're looking to the marketfor any resources they can get
to just wrap their arms around, uh, kind of what's going on.
Um, so today's podcast isbrought to you by the American
Health Law Association's Fraudand Abuse Practice Group. Uh, I
currently chair the PracticeGroup, and our mission is to
help our members stay informedabout healthcare fraud and
abuse and compliance issues.
(02:18):
Uh, this likely will be my lastpodcast , uh, as the Chair of
the Practice Group. Uh, thevice Chairs continue to do a
great job within the PracticeGroup , um, in developing
webinars and publications andother content. So , uh, you
know , the , the , uh, fraudAbuse Practice Group will
continue to produce some, some,some great current cutting edge
(02:38):
content. Um, so before we getinto the, the q and A here, you
know, crane , why don't youintroduce yourself and tell us
a little bit about yourpractice.
Speaker 4 (02:49):
Joe, first, I just
wanna say thanks for having me
back. I, I can't believe thatit had been August, 2023 since
we recorded the first time. Uh,and so I'm really appreciative
to be back here. Um, I thinkyou gave a pretty good overview
of , of who I am. Uh , I'm amember in the Las Vegas office
of Clark Hill. Uh, I spent 15years as a federal prosecutor.
(03:13):
I was the , uh, criminalhealthcare fraud coordinator in
the US Attorney's Office herein Las Vegas. Prior to that, I
was in private practice.
Obviously, since then, I'vebeen in private practice, and
I've been able to lean into myexperience as a prosecutor, as
I now defend , uh, providerswho are going through
(03:36):
enforcement actions.
Speaker 3 (03:40):
Uh , thanks Crane.
Um, and just a brief backgroundon, on me, I'm a shareholder
and practice group leader atHull Render . Um, I have a , a
very national healthcarepractice focused on a
healthcare financialrelationships with referral
sources, stark and kickback ,um, value-based models as well.
Uh , like I said , nationalpractice , um, uh, am am also
(04:03):
licensed in the state ofFlorida, and do a lot of work
in, in that market. Obviously,it's a , uh, a busy, busy
market , uh, there from a fraudabuse standpoint. Um, so just a
little background before we getinto Crane and , and discussing
his thoughts on, on the bookand on, on what he's seeing in
the market. Um, a lot ofnumbers get thrown around when
we start talking about fraudenforcement. Um, again, to all
(04:26):
of you listening in , um, whenI'm start, start, you know , a
lot of numbers, again, getthrown around. If you're
looking for numbers on, onenforcement, I often look to
the OIGs Semi-Annual Report toCongress. Uh, the most recent
version of that I think was,was released back in December
of 24, 20 24. And it , itdescribes the OIGs work
(04:48):
identifying issues , um, ininvestigation outcomes, and ,
um, their enforcements relatedto HHS programs and operations.
So they, they published thisreport , um, in the Fall 2024
report. The one I'm referringto mentioned some pretty
staggering numbers. Um, ithighlighted over $7 billion in
(05:10):
expected recoveries andreceivables resulting from HHS
and OIMG investigations andaudits conducted during that,
the last fiscal year. Um, ittalked about the fact that
there were , uh, the HHS andOIG were reporting over 1500
criminal and civil enforcementactions involving , uh,
(05:31):
individuals and entitiessuspected of engaging in
crimes, targeting HHS programs, um, and the people that they
serve , um, includingsettlements resulted from using
the OIG Civil Monetary PenaltyAuthority and criminal
investigations. I'm not gonnago into that in detail, but
that, that those are staggeringnumbers . And we look a bit
further. The HHS and OIG alsoexcluded over 3,200 individuals
(05:59):
and entities from participationin federal healthcare programs.
Uh, the report get goes intosome detail about that, that $4
billion , um, and, and, and,and their efforts at in
enforcing the program. Sothat's a number I , that's an
area I always go back to lookat when I'm thinking about
enforcement. Um, also if you'relooking for another resource,
(06:21):
the A HLA publishes every yeara connections article that,
that discusses in sort of broadstrokes , the biggest trends
and issues going on , um, in,in healthcare. And the article
from this past year on thefraud and abuse piece was
written by Ellie Valla and hercolleague Jordan Morin. And,
(06:43):
and they pointed out someissues to watch from a fraud
and abuse standpoint. Um, youknow, for years as, as they
mentioned in that article,combating healthcare front
abuse has been a criticalpriority for the DOJ . And now
there's a bit of a wait and seewith the new election , um, on
, on what remains a priority. Ithink Crane might talk about
that here. Um, there is someuner certainty and the next
(07:07):
administration could shiftpriorities or reallocate
resources. That article wasreleased in January, February.
I mean, I think we've seen someof that play out already. Um,
as, as we look at the market ,um, you know, obviously new
leadership when we look at HHSand CMS with, with Robert
Kennedy being pointed,appointed as the new head of
(07:29):
HHS , uh, Dr. Oz beingappointed as the CMS , uh,
leader , um, as well. Um , the,with all of that potential
change, I think some of theinfrastructure has remained the
same. Um, healthcare fraud andabuse and enforcement is
largely driven by the FalseClaims Act. Um, its key TAM
provisions remain on the booksthat hasn't changed , um, as
(07:53):
crane's are gonna talk aboutsomewhat. There, there is a, a
continued flow of cases comingfrom whistleblowers. Um, and
there is a pipeline alreadyestablished with , uh, those
whistleblower actions . Sorelators aren't going anywhere.
Um, we, I personally and othersthat I, I work with and, and
have talked to in the marketare continuing to see , uh,
(08:16):
investigations consistently ,uh, in the market. So
investigations are not goingaway. Um, I think they continue
to be a priority. And , um,based on all of that, with the
infrastructure and the pipelineof cases that come down, I , I
don't think we're going to see, um, you know, cases drop
(08:36):
dramatically. I think wealready have many of them in
the pipeline, and they alsohave always have lag time. Um,
it it , and there's been a lotof areas where we've seen
enforcement activity , uh,covid fraud, managed care , uh,
lab testing, a steady stream oflab cases , um, relating to
wrongly induced or influenceordering of tests. Um, the
(08:59):
medical necessity of thosetests , uh, telehealth
enforcement, including somecriminal enforcement , uh,
we've seen in the market , um,new OIG compliance guidance, I
mentioned that earlier. Um ,and also some industry segment
specific compliance guidancecoming out with nursing
facilities. So it's somethingto watch this year. We're gonna
(09:20):
see new guidance coming out ,uh, likely on those industry
specific areas. Lots ofactivity around ket a
constitutionality, FCA bigcases , uh, coming on the pike
with, with Chevron and the ooverruling of Chevron, and the
Loper Bright decision , uh,large stark settlements and ,
and anti-kickback settlements.
(09:41):
Uh, the continuing continuingissuance of advisory opinions.
And that's giving us newguidance to work from , um, in
lots happening in theself-disclosure space. So a
very, very busy area, obviouslycoupled with changes in the
administration. And so it's, itis a very interesting time, and
with all of us trying to, tomake sense of this and to
(10:03):
understand where our prioritiesshould lie , um, we know this
is a really complicated area.
And so Crane, with , with thatbackground on, on what's going
on from my perspective andothers from the market , um, as
, as you look at your book ,um, can you speak to that, give
us an overview of the handbook,generally , um, share what new
information might be in it ,um, in this most recent version
(10:26):
, um, that maybe didn't appearin , in earlier versions.
Speaker 4 (10:31):
I , I have to take a
minute to thank , uh, two guys
who were my mentors in Bostonalmost 30 years ago. Paul, Sean
, Bob Griffith. They were theprevious author slash editors
of this book. I work with themwhen I was a baby attorney, as
I said, nearly 30 years agonow. Uh, and aside from being
really good attorneys, they'rereally good guys. And I appre ,
(10:54):
uh, I appreciate even 30 yearslater, even though we haven't
worked together in, in 25years, the mentorship that they
still provide to me. So withregard to the, the book itself,
it's , it's not a treatise.
It's not intended to be atreatise , uh, even though
there are some reallyinteresting legal discussions
in it, it's intended to be ,uh, a practical guide. What
(11:17):
should you do if you receive asubpoena? What if you represent
an entity and an investigation,and you wanna obtain counsel
for the individual employees ofyour entity, or hire an expert
witness or conduct an internalinvestigation. Now , you asked
about some of the new thingsthat are in this edition , uh,
of the book. And, and what I'dlike to do is focus on two new
(11:40):
chapters that we added. Uh, thefirst chapter we added was one
on key TAM lawsuits, as weknow, and , and I'm gonna go
into some detail later on inthe podcast about this. Uh ,
and I'm really excited to talkabout , uh, enforcement trends.
But as we know, the FalseClaims Act authorizes private
parties known as Relators tobring a lawsuit in the name of
(12:04):
the government. The privateplaintiff does preliminary
investigation, and it providesa complaint, which it seals ,
uh, and then gives to the civildivision of the United States
Attorney's Office for anopportunity to what we call
intervene in the lawsuit. Whilethis may be second nature to
some of our listeners , uh, forthose of you who are new to
(12:26):
this, intervene as just sort ofa fancy word for taking over
the case, when the governmentintervenes, it assumes
responsibility for litigatingthe case. What we do in this
chapter , uh, of the book islook at the Keam case from the
perspective of both therelator, the plaintiff in the
case and the defendant, theparty charged with Medicare or
(12:50):
Medicaid fraud. From therelator side, we look at the
practical considerations thatgo into something as basic as
where to file. The goal isusually to persuade the
government to intervene in yourcase. So assuming you can file
your key TAM lawsuit in severaljurisdictions, say you're
(13:13):
making allegations against aprovider that has business in
multiple states , um, what arethe things you look at in
deciding where to file? Do youfocus on things like the
personal relationships of theattorneys with the United
States Attorney's Office? Doyou focus on issues of local
(13:33):
importance? Or do you presentyour case to an office with a
particularly strong reputationfor taking on big or hard key
TAM cases like the USAttorney's Office in Boston, or
the Eastern District ofPennsylvania in Philadelphia?
From the defendant side, wetake more of a legal or
(13:54):
technical approach to the FalseClaims Act. And what we look at
are what are some of thenuances of that statute that
might persuade the governmentnot to intervene in a case or
an argument counsel might maketo drive down the settlement
value of the case. And oneexample that I would use, Joe,
(14:15):
is the False Claims Act imposesliability on a party who causes
a false claim. Now, sometimesthat's very clear. If we're
representing a party thatactually submits claims to
Medicare or Medicaid, then thatanalysis is clear. But what if
you're representing a drug ordevice manufacturer , uh, and ,
(14:37):
uh, and they are sellingproduct to providers who
actually submit the claims at ,at what point can that drug or
device manufacturer be heldliable for causing the
submission of a false claim?
You , you won't be surprised tohear that the government
typically takes a veryexpansive view of what
(14:59):
constitutes causing thesubmission of a false claim.
And the defense bar takes aconsiderably narrower view. So
one example is a lot of thecourts say the , uh, party
being charged has to play aquote , substantial factor in
submitting in the, causing thesubmission of the claim. Now,
(15:19):
if an entity is accused ofpaying kickbacks, that's pretty
clear that they are asubstantial factor. But in sort
of the garden variety billingfraud case , uh, it's not as
clear courts require some levelof quote , direct involvement
in the billing process isproviding recommended CPT codes
(15:42):
enough, I don't know. And Ithink that's an issue ripe for
debate. The second chapter weadded, Joe, was in defending
commercial insuranceinvestigations. As we know,
healthcare fraud investigationsare most often conducted by law
enforcement and othergovernment agencies, but it is
(16:03):
a reality that healthcareproviders also face fraud and
abuse inquiries from thecommercial insurers , uh, to
which they submit claims. Werun through all of the
different types of commercialinsurance investigations from
recoupment actions, whichrequired in-depth analysis of
individual claim , individualclaims to credentialing
(16:26):
actions, which is to say, whena private insurer tries to
terminate a provider from theirnetwork, and we try to give the
reader an overview.
Speaker 3 (16:35):
So along , uh, you
know, along the lines, the book
gets into some of thesettlements that, that we've
seen in the mar in theindustry. Um, I mean, we, we,
we try to keep our eyes onthose. They, they tell, each of
them tells a story , um, theyhelp our clients assess risk.
Uh, so can you provide someexamples of, of notable , uh,
(16:56):
recent settlements that youthink we should be focusing on?
Speaker 4 (16:59):
Sure. Um, Joe, I
thought you did a great job at
the outset talking aboutnumbers. And I, I'd like to
expand upon , uh, thatdiscussion a little bit before
I get into specificsettlements. I , I want to talk
numbers also, and , and youexplain that you usually rely
on the OIG Semi-annual report ,uh, which is a , a fabulous
(17:21):
resource. I also tend to lookat the Department of Justice
issues, a report in January ofeach year talking about its
recoveries and the work thatit's done. That's also a , a
helpful source of information.
Um, so, so what, what happenedin 2024 and , and what does it
tell us potentially aboutwhat's gonna happen in, in
(17:42):
2025? In fiscal year 2024, theDepartment of Justice recovered
$2.9 billion in False ClaimsAct settlements, 1.7 billion of
which was healthcare related .
It was the second largest yearfor recoveries on record behind
(18:04):
only fiscal year 2021, which Ithink we can fairly attribute
to covid fraud. Now, two of thebiggest settlements last year
were against, and I'll , I'llget into some specifics, but
these two really sort of stuckout to me. There was one
settlement against Rite Aid,the pharmacy chain, and one
(18:25):
against Endo Health Solutions,which is a, a drug
manufacturer, and both relatedto the improper distribution of
opioids. And spoiler, I'm gonnatalk about that a little bit
when we talk about initiativesof the new administration. The
, the right aid settlement wasa , a $408 million settlement.
(18:48):
And the accusation was that thepharmacy lacked a legitimate
medical purpose , uh, to issuecertain prescriptions. And
those scripts were not issuedin the usual course of
professional practice. The endosettlement was for 475 million.
And the allegation was that ithad used a marketing scheme
(19:11):
that targeted healthcareproviders that the manufacturer
knew were prescribing its drugfor a non-medically accepted
indication. Now, I , I thinkthere are a couple of things
that are meaningful in thosesettlements. First is the focus
on opioids. We're gonna talk ina few minutes, I think, Joe,
(19:33):
about the impact of the newadministration on enforcement
initiatives. Here's my spoiler.
While I think healthcareenforcement initiatives are
gonna diminish under thecurrent administration, the one
area that I think we may see anincrease, or at least robust
enforcement, is opioids. Theadministration has been pretty
(19:55):
clear that it deems opioidabuse a major issue and intends
to pursue it . The second thingthat stuck out to me about
these two settlements is thatboth cases involve dual
criminal and civil resolutions,which means they were the
product of parallelinvestigations by the civil
division and the criminaldivision. Uh, that's well
(20:18):
within Department of Justice'srights. It is perfectly legal.
It was very popular method ofinvestigating cases , uh, 15,
20, 30 years ago. Um, frompersonal experience, though ,
uh, the last few healthcarefraud cases I've defended have
either been criminal cases orCivil False Claims Act cases,
(20:43):
but not both. Uh, I have thisvague sense, Joe, based on
nothing but anecdotal evidencethat the number of parallel
investigations and prosecutionshas diminished as of late. The
third thing I wanted to pointout about the Rite Aid
settlement and about the Endosettlement is, which I found
(21:05):
interesting, is that both casesinvolved bankruptcy agreements,
which is to say in both cases,the defendants were in
bankruptcy or had declaredbankruptcy, and in both cases,
the Department of Justiceappeared in the bankruptcy
proceeding and worked out asettlement with the debtor in
(21:25):
the context of the bankruptcyproceeding. Um, I'll be honest,
I haven't seen that very often.
Uh, and it's something I'd liketo continue to observe because
it requires some bankruptcyexpertise on the part of , uh,
on the part of the Departmentof Justice. Um, so, so those
are the the things that Iwanted to , uh, highlight in
(21:48):
terms of recent settlements ,um, and , uh, and patterns.
Speaker 3 (21:55):
Thanks for that. And
I mean , uh, just pulling the
thread , um, you know, you lookat these new cases versus old
ones, and , and this might beasking you the same question
again, are , are you noticingany other patterns beyond what
you just described?
Speaker 4 (22:09):
N no , I think what
was reported in 20, and again,
I'm, I'm sort of segwaying intothe, the next section, but I
think what you see in 2024 is acontinuation of the prior
administration, the Bidenadministration, which tended to
, uh, place a greater emphasison healthcare fraud, white
(22:31):
collar fraud. And so what yousee, Joe, is a full panoply of
enforcement actions.
Speaker 3 (22:39):
So, so crane on
that, I mean, let's, let's pull
out your, your crystal ball.
Um, you know, I mentionedearlier Robert Kennedy at HHS,
Dr. Oz , at CMS, obviously ,um, we're seeing other
personnel changes acrossgovernment , uh, within the
Department of Justice. Um, whatkind of an impact will the, the
(23:00):
new administration have onenforcement initiatives beyond
what you said, Al , what, whatyou shared already?
Speaker 4 (23:06):
So, Joe, I'm
actually really excited to talk
about this and , and try tolook into the future because I
think there are so many waysthis can go. And it's so
interesting to me in terms of,of where this may go in terms
of healthcare enforcement. Llet's start here. There is a
new administration , uh,whether you love this
(23:28):
administration or hate thisadministration, and I think we
can agree there doesn't seem tobe a lot of middle ground. Um,
this administration has beenvery clear that it intends to
place an emphasis onimmigration and violent crime .
I suspect that what we're gonnasee within the Department of
(23:49):
Justice is a massiveredeployment of assets from
white collar cases to thoseareas. Um, I suspect what that
means is we're gonna see afairly dramatic decrease in
government initiated healthcarefraud investigations and
(24:10):
prosecutions simply as aproduct of reduced resources.
Now, normally, and this is tome where it gets really
interesting, normally what thatwould mean is that it would be
up to private plaintiffs, therelators, we talked about the,
the False Claims Act earlier in, in the, in the show, it would
(24:32):
be up to those privateplaintiffs, the relators to
fill that gap. In other words,you might see far more key TAM
cases if the FBI and the OIGaren't investigating cases on
their own, but , andthere are two pretty
significant buts. Um, first,the administration, I believe,
(24:57):
is gonna redeploy resourcesaway from white collar crime.
What this means, I think, isthat all of those civil AUSAs
who normally may be salivatingat getting their hands on good
keam cases, may be doing otherthings, or maybe their
positions won't be filled atall. Uh, I'm aware of a US
(25:21):
attorney's office right nowthat is uniformly declining all
ke tam cases, regardless ofmerit , uh, because they don't
have the manpower, the personpower to, to handle these
cases. Now, there's one morereally big, but , um, in
October, 2024, so right at theend of the year, a district
(25:45):
court judge, a federal districtcourt judge in Tampa, Florida,
dismissed a key TAM case on thegrounds that the key TAM
provision of the False ClaimsAct is unconstitutional, that
it violates the appointmentsclause of the Constitution.
This was in , in False ClaimsAct land, a dramatic ruling.
(26:08):
The, the False Claims Act, theketan provision had been in
place since 1986. And in 2024,we had a district court judge
say it's unconstitutional. Now,we could, regardless as a
one-off, this judge made thisdecision in this case, except
(26:30):
the district judge who issuedthe opinion is a former law
clerk to Justice ClarenceThomas. If this case winds its
way through the Appeals Court,and it's pending , uh, in front
of the 11th Circuit right now,and it makes its way to the
Supremes, how do we thinkJustice Thomas and his
(26:51):
conservative brethren will ruleon this? The, the briefing is
ongoing. In that case, thedefendants who prepare , who
prevailed at the district courtlevel just filed their
responsive brief in the middleof March. So we don't have any
answers. It may be a year ortwo before we get a conclusive
(27:12):
decision from the SupremeCourt, but I think it's a huge
development to keep an eye on.
So on the one hand, you may see, uh, you see it , it sort of
pivots back and forth. You'regonna see less investigations
by the government, whichnormally would mean more
investigations by privaterelators, but you have may have
(27:36):
less AUSAs to intervene in thecase. And then you've got this
really significant court case,which may say the relator
provision, the ketan provisionof the False Claims Act is
unconstitutional. So we are inthe middle, Joe, of complete
uncertainty, and it's not asatisfying answer , uh, because
(28:00):
I'd love to, to get on the showand say, I'm pretty sure this
is exactly what's gonna happen,but what I can do is say, we
are in a world of uncertaintyright now, and I think it's
gonna take a year or two forthis all to sort of shakeout.
Speaker 3 (28:18):
Yeah, thanks. And I
, I was talking to someone
recently that said theircrystal ball is broken right
now. So , uh,
Speaker 4 (28:24):
, I think
that's right.
Speaker 3 (28:26):
You were , uh, so I
really appreciate that. And
then weaving in the referencesto the book, again, it's, it's
a , a , it , it's, it's areally helpful , uh, handbook
as, as our those listening inare trying to navigate this
challenging environment. Um,crane , any final thoughts for
the audience before we wrap up?
Speaker 4 (28:46):
Uh, I just really
want to thank you, thank a HLA
for having me on today. It'ssomething I enjoy doing. Uh,
and if people listening havequestions or wanna talk about
something that we discussedtoday or something that's in
the book, they should feel freeto reach out. Uh, my email
address, cpomerance@clarkhill.com . Uh, I
(29:07):
welcome those kinds of contexts.
Speaker 3 (29:10):
Good , good thought
too. I mean , uh, and I, I echo
that. I , I think there's somuch change going on in the
market that every data pointthat we have , uh, I i , is
just so important. And so, youknow, crane , thanks for
sharing your , uh, yourperspectives today and , and
your insights from the book.
Um, thanks to all of you forlistening in to today's
(29:31):
podcast. Um, we're alwayslooking for more volunteers
within A HLA and within theFraud Abuse Practice Group .
So, to all you listening , uh,please reach out to me on
LinkedIn , um, if you'd like tobe on a future episode or if
you have an idea what we shouldbe covering going forward, if
you have ideas for webinars,this is a dynamic environment,
(29:52):
and I , I've heard some reallyinteresting topics from people
just reaching out. And soplease do reach out , uh, to,
to people like Crane andmyself. We're , we're , we're ,
we're navigating thisenvironment as well. Um, we'd
love to find a way to get youall involved in the mix at A
HLA as well. Uh, thanks toeveryone for tuning in. Uh ,
have a great day. Take care,crane .
Speaker 2 (30:18):
Thank you for
listening. If you enjoyed this
episode, be sure to subscribeto ALA's speaking of health
Law, wherever you get yourpodcasts. To learn more about a
HA and the educationalresources available to the
health law community, visitAmerican Health law.org.