AseraCare FCA Case Settled for $1M

Jack Selden

In March 2016, NAFUSA member Jack Selden and his firm, Bradley Arant Boult Cummings LLP, won summary judgment on behalf of AseraCare, Inc. in an important False Claims Act case. At the end of the eight week first phase of the trial, Judge Karon Bowdre sua sponte struck down a $200 million FCA case against the hospice provider, holding that the government’s second guessing of physicians’ medical judgment alone cannot prove false claims.

The Government appealed the summary judgment to the Eleventh Circuit Court of Appeals, and the Appellate Court in September 2019 issued an important opinion with potentially broad application on the issue of medical necessity in FCA cases, adopting all of the legal standards set forth by AseraCare and ultimately by the District Court.  The Eleventh Circuit held that a claim cannot be false “if the underlying clinical judgment does not reflect an objective falsehood,” and that “the mere difference of reasonable opinion between physicians, without more, as to the prognosis for a patient seeking hospice benefits does not constitute an objective falsehood.”   Nonetheless, the Eleventh Circuit vacated the summary judgment and remanded the case with a narrow mandate that the District Court reconsider its summary judgment, ensuring that it considered all evidence proffered by the Government.  In so doing, the Court stated that though it was giving the Government “the green light to once again try to persuade” the district court that a triable issue exists, “we emphasize that we do not know that this effort will succeed.”

Before the submission of summary judgment briefing on the remand, the case settled on February 27, as reported by Law 360:

 AseraCare announced Thursday that it would pay just $1 million to settle the hospice chain’s high-profile and lengthy Medicare billing dispute with the U.S. Department of Justice, which once sought more than $200 million worth of claims under the False Claims Act.

 

AseraCare unveiled the terms of the settlement, which also doesn’t require a corporate integrity agreement, one day after the parties lodged a pair of dismissal stipulations in Alabama federal court. The closely watched case has dragged on since 2008, when three AseraCare employees accused the company of overbilling Medicare for its services.

 

Jack Selden, counsel for AseraCare, told Law360 on Thursday, “When a case settles for $1 million where the claims have been for over $200 million, I think that speaks for itself.”

 

“I’m certainly quite pleased with that outcome,” he said.

Selden added that he believes the settlement reflects “that the law and the evidence was in complete support of AseraCare.”

 

AseraCare initially beat the DOJ’s claims in March 2016, but the Eleventh Circuit vacated the district court’s decision last September. In its order, the appellate court held that U.S. District Judge Karon O. Bowdre had wrongly overlooked evidence that the company withheld crucial information about patient health from doctors who certified eligibility. However, the Eleventh Circuit also agreed with AseraCare and the district court that a difference of reasonable physician’s opinions on a terminal patient’s prognosis alone doesn’t constitute falsity under the False Claims Act.

 

The government must provide evidence linking any allegedly shady practices to specific patients, the appellate panel ruled.

 

In Thursday’s announcement, AseraCare praised that opinion, saying it “provides comfort for the physicians who are making these difficult determinations related to terminally ill patients as well as the hospice providers who are reimbursed by Medicare for services for these patients.”

 

“AseraCare is grateful to have reached this settlement with the Department of Justice and is proud that perseverance produced a benefit to the hospice industry that provides more clarity under the False Claims Act,” the company said.

 

The settlement also comes about two months after Judge Bowdre declined to reopen discovery in the case, a move the DOJ had pushed for, arguing it would allow its medical expert to determine whether a “reasonable physician” could have reached the same conclusions that any of the patients at issue in the trial were terminally ill based on medical records.

 

The case also garnered attention because the government’s lead attorney on the case used to be Jeffrey Wertkin, who left the DOJ for Akin Gump Strauss Hauer & Feld LLP only to be arrested months later for stealing a sealed FCA suit and trying to sell it. Wertkin eventually pled guilty and got 2½ years in prison.

 

Notably, the litigation also involved a split trial, the use of statistical sampling and an unsuccessful effort to expel an attorney for speaking with the media, plus the fact that it went to trial in the first place, which is rare for FCA matters.

 

The case is U.S. ex rel. Paradies v. AseraCare Inc. et al., case number 2:12-cv-00245, in the U.S. District Court for the Northern District of Alabama.

Bill Baer Joins Brookings

NAFUSA member Bill Baer is joining the Brookings Institution as a visiting fellow in Governance Studies, where he will focus on antitrust and competition policy. Bill has served as a leader in U.S. federal antitrust enforcement for over four decades, most notably as Assistant Attorney General in charge of the Antitrust Division at the Department of Justice from 2013 to 2016 and as Director of the Bureau of Competition at the Federal Trade Commission from 1995 to 1999.

During his tenure as Assistant Attorney General, the Antitrust Division achieved numerous successes in civil and criminal enforcement. As Acting Associate Attorney General from 2016 to 2017, Bill oversaw the Antitrust, Civil, Civil Rights, Tax, and Environment and Natural Resources Divisions and led efforts to hold financial institutions accountable in the residential mortgage-backed securities crisis, securing record penalties and consumer redress.

Bill also worked at the Federal Trade Commission from 1975 to 1980 as Attorney Advisor to the Chairman and Assistant General Counsel for Legislation and Congressional Relations. In addition to his public service, Bill headed the antitrust practice at Arnold & Porter, representing a broad range of companies in U.S. and international cartel investigations, antitrust litigation, and mergers and acquisition reviews by antitrust enforcers, including the DOJ, FTC, state attorneys general, and the European Commission.

Bill was twice named by Global Competition Review as the best competition lawyer in the world; honored by Best Lawyers as the best antitrust lawyer in Washington in 2010 and 2012; and named by The National Law Journal as one of “The Decade’s Most Influential Lawyers.” In 2015, the Federal Trade Commission honored him with the Miles W. Kirkpatrick Lifetime Achievement Award. In 2017, the American Antitrust Institute presented him with the Alfred E. Kahn Award for Antitrust Achievement.

Bill received his JD in 1975 from Stanford Law School, where he served as Senior Article Editor of The Stanford Law Review, and his BA in 1972 from Lawrence University, which recently awarded him its Distinguished Alumni Achievement Award.

Kevin O’Connor Joins Carrier as VP, General Counsel & Government Relations

In early January, Carrier Corporation announced that NAFUSA life member and former board member Kevin O’Connor has been appointed as Carrier’s Vice President, General Counsel & Government Relations, responsible for both functions globally.

“Kevin joins Carrier from Point72 where he served as Chief Legal Officer for the past four years. He will be a member of Carrier’s Executive Leadership Team, reporting to me, and his appointment will be effective in early January. Kevin will be based in Palm Beach Gardens, Florida.

As a standalone company Carrier’s legal landscape will be of greater consequence than ever before. In his new role, Kevin will provide leadership for the company’s legal and regulatory affairs, ethics and compliance programs and corporate governance activities, as well as develop and execute advocacy strategies to support business growth.

Kevin is a proven leader with more than 25 years’ experience, bringing to the role a strong combination of experience in government and the private sector, including at the U.S. Securities and Exchange Commission, as U.S. Attorney for Connecticut and Associate Attorney General of the United States, serving as the third-ranking member of the Department of Justice. Before joining Point72, Kevin served as the head of Global Ethics and Compliance for United Technologies. Kevin brings strong experience to Carrier and he will be a significant asset as we transition to our future state,” said Dave Gitlin, Carrier’s President & CEO.

Judge Droney Returns to Day Pitney

Day Pitney LLP announced on January 2, 2020, that Christopher F. Droney, retired Senior U.S. Court of Appeals Judge for the Second Circuit, has rejoined the firm’s Hartford office as a partner in the Litigation Department. Droney began his legal career at Day Pitney as an associate following law school. He is also NAFUSA’s newest member.

“We are thrilled to welcome back Judge Droney to Day Pitney,” said Tom Goldberg, Day Pitney’s Managing Partner. “Judge Droney’s unique combination of experience as a trial and appellate jurist for more than two decades and as a former U.S. Attorney will significantly benefit our clients and enhance our deep team of talented lawyers.”

Droney was appointed to the U.S. Court of Appeals for the Second Circuit by President Obama on December 1, 2011, where he served for eight years. Until his elevation to the Court of Appeals, he served as a U.S. District Judge for the District of Connecticut for fourteen years. Before his judgeships, Droney was the U.S. Attorney for Connecticut. His experience also includes serving as Mayor of West Hartford.

While on the Court of Appeals, Droney was a member of the Committee for the Administration of the U.S. Bankruptcy Courts of the U.S. Judicial Conference. He was also a member of the board of directors of the Federal Judges Association.

As a U.S. Attorney, Droney supervised numerous criminal investigations, including grand jury matters. He was also a member of the Attorney General’s Advisory Committee of U.S. Attorneys, and chair of the Civil Issues Subcommittee of the Attorney General’s Advisory Committee.

“I am excited to return to private practice at Day Pitney,” said Droney. “I look forward to collaborating with the firm’s many talented lawyers, many of whom I know and have worked with, to develop solutions for clients across a range of areas.”

As part of Day Pitney’s Litigation Department and a member of the Appellate practice group, Droney’s practice will focus on complex litigation at state and federal levels. He will also represent clients in matters involving governmental and internal investigations and white collar defense.

Judge Droney received his B.A. degree, magna cum laude, from Holy Cross College and his J.D. from the University of Connecticut School of Law.

Rod Rosenstein Joins King & Spalding

King & Spalding today announced on January 8, 2020, that former Deputy Attorney General and NAFUSA member Rod Rosenstein has joined the firm’s Washington, D.C., office as a partner on its Special Matters & Government Investigations team.

Rosenstein spent almost two decades in senior legal management and leadership positions at the U.S. Department of Justice during the administrations of Presidents George W. Bush, Barack Obama and Donald Trump, including as Deputy Attorney General (2017 to 2019) and United States Attorney (2005 to 2017). Prior to his appointment as the Department’s second-highest ranking official, he was the longest-serving Senate-confirmed U.S. Attorney in recent history.

“Rod Rosenstein is an exceptional trial lawyer, strategist and leader with unquestioned integrity and toughness,” said Robert D. Hays, Jr., chairman of King & Spalding. “His arrival underscores the firm’s longstanding commitment to effective advocacy on the most complex and highest stakes government-related matters. Our clients will benefit from the unique experience of Rod and other senior government officials working together as a team. His arrival reflects the firm’s intent to continue building leading practices led by extraordinary lawyers to serve clients on their most pressing and sensitive needs.”

With his vast prosecutorial and enforcement background, Rosenstein becomes another critical member of King & Spalding’s Special Matters & Government Investigations team, which assists clients—corporate, institutional and individual—in sensitive and reputational legal challenges, including many involving government agencies, legislative bodies or state Attorneys General. In the past two years, the firm has significantly ramped up the group with an all-star roster of former senior Justice Department officials, including former Deputy U.S. Attorney General Sally Yates, former U.S. Attorneys John Richter, Zachary Fardon,  John Horn and Jim Vines, former Associate Deputy Attorney General Alicia O’Brien and former FBI Chief of Staff Zack Harmon. Other former senior officials recently joining the firm include former Director of National Intelligence Dan Coats and former General Counsel for the Office of the United States Trade Representative (USTR) and acting USTR Stephen Vaughn.

Rosenstein said, “I worked with many current and former firm lawyers in both Republican and Democratic administrations, and I learned that some of the best lawyers in the world work at King & Spalding. When considering where to go after leaving the Department of Justice, it became clear to me why so many former government officials choose this firm. With an unparalleled depth of experience across its practice groups and a long and distinguished record of success in courtrooms, King & Spalding is a bipartisan firm that focuses on helping clients resolve complex and sensitive matters in the United States and abroad. The inclusive and collaborative culture allows every client to benefit from the broad expertise and deep insight of more than 1,100 exceptional lawyers throughout the firm’s 21 offices. I look forward to working with my new colleagues to expand the firm’s government investigations, national security and cybersecurity practices.”

Rosenstein conducted complex investigations and handled litigation in trial and appellate courtrooms as Principal Deputy Assistant Attorney General for the Department’s Tax Division (2001 to 2005), as an Assistant U.S. Attorney for the District of Maryland (1997 to 2001), and as an Associate Independent Counsel (1995 to 1997).

Rosenstein started his legal career in 1989, as a law clerk to Judge Douglas H. Ginsburg of the U.S. Court of Appeals for the D.C. Circuit. He first joined the Department of Justice as a trial attorney in the prestigious Public Integrity Section of the Criminal Division (1990 to 1993), before serving as counsel to the Deputy Attorney General and the Assistant Attorney General for the Criminal Division (1993 to 1995). In these and other roles, he received dozens of awards and honors for his performance. In addition, Rosenstein gained impressive trial experience while representing the United States at 23 jury trials and arguing 21 appeals in various appellate courts around the country, including the 2018 U.S. Supreme Court criminal case of Chavez-Meza v. United States, in which the Court ruled in favor of his argument.

Rosenstein graduated from the University of Pennsylvania’s Wharton School, with a B.S. in Economics, summa cum laude and Phi Beta Kappa. He earned his J.D., cum laude, from Harvard Law School, where he was an editor of the Harvard Law Review.

Mike McKay Publishes Personal Essay on Bill Ruckelshaus

As we reported on December 1, 2019, William Ruckelshaus passed away on November 27, 2019. He will be fondly remembered by NAFUSA members who were present at the annual conference in Seattle in 2009 when he gave the keynote address, the first time he publicly spoke of the “Saturday Night Massacre.” On January 4, 2020, the Seattle Times published Past NAFUSA President Mike McKay’s personal essay about Bill Ruckelshaus and the memorable address in 2009. Click her to read  William Ruckelshaus, a man for all seasons . 

Bart Daniel Publishes New Book

 

Bart Daniel

NAFUSA Past President Bart Daniel’s latest book, Health Care Fraud & Collateral Consequences, Third Edition, has been published by the South Carolina Bar.

 

Aggressive fraud enforcement in the health care arena was almost unheard of prior to the passage of HIPAA in 1996, which forever changed the enforcement landscape. In addition to creating a specific health care fraud offense, it funded new prosecutor, auditor and agent positions to ferret out and prosecute health care offenders. The 2010 Affordable Care Act (ACA) built on HIPAA, providing additional tools for more aggressive enforcement. In the field, talented and creative Assistant U. S. Attorneys opened an entirely new frontier with the advent of “data mining” where potential health care fraud could be identified in real time.

This publication discusses the impact of these additional weapons of enforcement and the wide-ranging case law which has followed. Whether it’s big Pharma, large scale hospital systems or the day-to-day operations of a small town pharmacy or a behavioral service provider, submission of claims for payment to the Medicare/Medicaid/Tricare programs has become a minefield for the unwary.  Civil False Claims Act exposure, criminal prosecution and exclusion from health care programs is a real concern for providers today. Moreover, the providers risk the loss of their professional licenses and the ability to earn a living. Health care counsel must become familiar with civil and criminal enforcement enough to recognize the early warning signs of an investigation and understand the action that should be taken.

Click here to order a copy of Bart’s new book

 

Carmen Ortiz Elected to the Anderson & Kreiger LLP Partnership

Boston law firm Anderson & Kreiger LLP announced the promotion of former U.S. Attorney and NAFUSA member, Carmen Ortiz  (Massachusetts 2009-02017),  to the partnership effective January 1, 2020.  Carmen focuses her practice at Anderson & Kreiger on internal investigations, white-collar criminal defense and civil litigation. Managing Partner David Mackey commented that “Carmen has had a tremendously successful start to her career at Anderson & Kreiger.  She’s brought in new clients and practice areas to the firm, done excellent work for those clients, and been a role model for the younger lawyers here.  We’re honored that she’s chosen to practice law with us and are proud to include her in the partnership.”

Carmen stated “I am delighted that Anderson & Kreiger has given me its full vote of confidence by having me join them as a partner.  I could not have asked for a greater group of people to work with: talented lawyers who care deeply about their clients, but also about public service, social justice, and who commit themselves, time and time again, to many causes that benefit society and those without a voice.  I look forward to contributing all of my very best to the firm.” Carmen is on the Board of Trustees for Adelphi University, Discovering Justice and Crossroads (a non-profit devoted to empowering youth).  She is also on the Advisory Board of Trustees for Beth Israel Deaconess Medical Center and a Board Member at Large for the Massachusetts Women’s Forum.   She is an active member of the Hispanic National Bar Association, Massachusetts Association of Hispanic Attorneys, Women’s Bar Association of Massachusetts, Women’s White Collar Defense Association, American Bar Association, National Association of Former U.S. Attorneys and the Boston Bar Association.

 

Stern Reports on Investigation of Boston Seminaries

NAFUSA Past President Don Stern (Massachusetts 1993-2001) was hired in 2018 by Cardinal Sean P. O’Malley to lead an investigation into allegations of sexual misconduct in all three seminaries in the Archdiocese of Boston. The review focused on allegations of sexual misconduct at Saint John’s Seminary in Brighton. The year long review was led by Stern and his Boston law firm Yurko, Salvensen & Remz. On November 22, 2019, the Archdiocese of Boston released the Stern independent report that confirmed instances of inappropriate sexual activity and found that social drinking was frequently encouraged at St. John’s Seminary.

Click here to read Review drinking and sex at seminary- The Boston Globe