Friday, September 17, 2010

MDRP 2010 Conference - Enforcement of the Federal False Claims Act

Viveca Parker - Assistant United States Attorney, USDOJ
Michael Theis – Hogan Lovells

The Department of Justice is looking for many things that manufacturers are doing to enforce the laws within the healthcare industry. Some of which are: Off-label promotion, anti-kickback violations, marketing spreads, and Best Price reporting errors. In the last few years there have been over $4 Billion in settlements by manufacturers to the DOJ for these types of violations.

They are also looking at ways that payments are made from companies to purchasers that are guised as grants, educational funding, and meeting sponsorship without taking them into consideration during the submission of their Best Price as a discount/rebate. This recently was brought to light in a complaint filed January 15, 2010 against Johnson & Johnson. There are also complaints being filed due to Temporary Price Allowance Programs where purchasers are offered prices from six months prior, but not including those price discounts in the calculations thus falsely inflating the average sales price.

Another thing to remember is that if you are submitting a false Best Price and/or AMP you are also submitting false PHS pricing, as it is based off of the those two numbers. And in reverse, there is language that covers those instances where entities are using 340B discounted products but have not reported the discount, while then submitting a claim for a rebate through Medicaid or Managed Medicaid. This means that the government has received two price concessions when they were only entitled to one. In this case the entity/pharmacist, under the new regulations, will be submitting a false claim.

The take away is that due to changes, amendments, and loosened language in the false claim rules the DOJ now has more tools than ever available to go after fraud in the programs by companies or by individuals within the company. Be diligent in your compliance efforts and if you are concerned that your actions may be interpreted as fraud it is always best to be safe than sorry. The amount of money you may save in your possibly-false actions will never negate any settlement you will have to face from a complaint.

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