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AHLA's Speaking of Health Law
Health Care Fraud and Abuse Trends From 2025 and What to Expect in 2026
Stewart Kameen, Partner, Bass Berry & Sims PLC, Brandon Helms, Shareholder, Hall Render Killian Heath & Lyman PC, and Matthew Westbrook, Senior Counsel, Proskauer Rose LLP, discuss some of the key health care fraud and abuse trends from 2025 and what to expect in 2026. They cover the current landscape; Administration priorities; general trends; and key settlements, cases, and advisory opinions. From AHLA's Fraud and Abuse Practice Group.
Watch this episode: https://www.youtube.com/watch?v=AE0p4j-RXMw
Learn more about the AHLA Fraud and Abuse Practice Group’s February 18 webinar, “Fraud and Compliance Year In Review”: https://educate.americanhealthlaw.org/local/catalog/view/product.php?productid=1691
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SPEAKER_03:Hello, uh, and thank you for uh joining us today for this Healthcare Fraud Year Interview podcast brought to you by the American Health Law Association, the Fraud and Abuse Practice Group. My name is Stuart Camille. I'm the chair of the fraud and abuse practice group, and I'm joined by my colleagues Matt and Brandon, who will introduce themselves in a moment. I'm a partner at the law firm Bassberry ⁇ Sims in the firm's Washington, D.C. office, where I work in the regulatory space, primarily in the anti-kickback statute and beneficiary inducement fraud areas. I advise clients on front-end counseling issues, deal diligence issues, and defense work in the False Claims Act space. Prior to joining BassBerry, I worked at HHS OIG in the Office of Counsel, specifically in the industry guidance branch, which is the branch that issues advisory opinions, safe harbor regulations, and other guidance. As I mentioned, I'm joined by other vice chairs here from the fraud and abuse practice group who I'll introduce themselves now.
SPEAKER_02:Hi, everyone. My name is Brandon Helms. I'm a shareholder at Hall Render. I focus mainly on compliance investigations and then also defending government investigations under the False Claims Act and also False Claims Act litigation. Before I joined Hall Render, I spent eight years as an assistant U.S. attorney in Detroit, where I uh I started on the civil side doing False Claims Act investigations, and then I switched to the criminal side and I handled criminal health care fraud prosecutions. And now I'm still located in Detroit.
SPEAKER_01:Hi everyone, I'm Matt Westbrook. I'm senior counsel in the DC office of Prosgow Rose. Like Stuart, I spent the first half of my career with OIG, specifically in the administrative and civil remedies branch. While at OIG, I assisted AUSAs like Brandon with investigating and resolving false claims act allegations, and in connection with those, determining whether CIAs or exclusions were appropriate. I also advised on the anti-kickback statute, the STARK law, CMPL and Mtala, and I handled self-disclosures submitted through OIG's protocol. And now that I'm in private practice at Proscauer, I advise our clients about the same kinds of matters as they assess certain transactions or business development opportunities. Looking forward to the discussion, guys.
SPEAKER_03:Yeah, thank you both. And as I mentioned, this is a healthcare fraud year interview. It's not a not a deep dive or of a highlights uh reel for things we're observing in the industry. Um I should say a couple matters of housekeeping. The first being this recording is taking place in the middle of December. So to the extent there are late breaking updates in the final two weeks of the year, which often there are, um, those will have to be covered by by other uh product from AHLA and other sources. Um, and to that end, we uh that the fraud and abuse practice group does put on annually a healthcare fraud and compliance year interview webinar, much more substantive, um, covering some of what we're going to talk about today and other issues in more detail. And so we thought today we would just touch on our observations, um, starting with sort of general happenings. Um, it's been a fairly busy year, um, and we'd shift over to uh administration priorities that impact the healthcare fraud space that we sit in, then move over to some trends we're observing throughout the year and what those might mean for next year and future years of enforcement. Um, and we'll touch on a few key uh settlements and cases that we're following, maybe some OIG advisory opinions and the like, um, and then make some predictions to the extent we can on where things may be headed. Um, so with that, I'll kick us off here with some of the sort of I'm calling them happenings that we're seeing. Um obviously, you know, 2025 I think can be uh characterized as a busy year in many regards as well as kind of an odd and quiet year in other regards. Um as you all know, probably, you know, the the new administration took took over uh at the beginning of the year, and pretty shortly thereafter we saw uh the mass firing of a number of inspectors general across multiple agencies. Um, those included Christy Grimm at HHS, uh OIG. Um obviously some lawsuits came following that, but at the moment, um, the Office of Inspector General for HHS is under the leadership of an acting inspector general, um, a seasoned veteran that Matt and I know from our work there. And you know, my advice uh to clients early in the year was to sort of expect business as usual from that agency, you know, the leadership there and that sort of the system that operates there is moving forward as it normally does. That said, we also saw uh pretty early in the year sort of the doge-related changes that came from the administration, which for many who work in government agencies saw you know early retirement packages being offered, um, others who just voluntarily moved on to new roles in the private sector, law firms, in-house, et cetera. Um, and you know, this did mean some significant departures, I think, um, in the agencies, including at OIG and some in senior roles. Um, for instance, Matt, and I know many attorneys over there at the Office of Counsel uh who left for new roles. Those included an assistant inspector general, but also included the chief counsel himself. Um, you know, again, OCIG is under the leadership of seasoned veterans. I believe there are two seasoned veterans there who are rotating in an acting chief role. Um, I know the the industry guidance branch where I used to work, the women issues advisory opinions and other guidance, they saw several departures. Um, so you know what that might mean uh over at OIG is sort of yet to be seen. As I mentioned, there's plenty of fantastic lawyers there still doing the work, plenty of other professionals and the other components doing that work. We're seeing reports come out and whatnot, um, and that that machine is moving forward. Um, at the same time, you know, I think uh sort of on the quiet front, um, you know, we we do know that OIG has has um undertaken to overhaul this compliance program guidance, for instance. Um, under the prior administration, we saw an overhaul of the general, very helpful general compliance program guidance document come out, um, and then shifting to industry-specific guidance documents, we saw at the end of 2024, um, the nursing facility guidance document. Um, I just checked this morning to make sure, but as we sit here today, um, OED's website does say that it, you know, there's a half dozen or more industry-specific compliance program guidance documents uh slated to be issued, including three that are uh indicated to be issued in 2025. Um, those those included for um uh Medicare Advantage, for hospitals, for clinical labs. Um, there are a few weeks left in the year, a couple weeks left. We'll we'll see if we see those documents, but um, you know, to date we have we have not seen them. So again, you know, uh unclear if all of these other priorities um have impacted that work or whether there's there's some other objective uh taking priority there. Um Matt, Brandon, I don't know if you all have other thoughts of your observations around what this year and and some of the agency departures has meant um, you know, for your work.
SPEAKER_02:In terms of the Department of Justice, there have certainly been a number of shake-ups. Obviously, we have a new attorney general, Pam Bondi, a new deputy attorney general, Todd Blanch. They wasted no time putting their own stamp on their priorities. So we we know they're interested in civil rights investigations involving DEI, uh gender transition treatment, uh, immigration issues, just to name a few that they're focusing on. Uh relevant to False Claims Act work, Michael Granson used to oversee the DOJ's commercial litigation branch, which oversees False Claims Act investigations. He departed earlier this year, and Brennan Jenny from Siddhilly Austin has taken his place. Um it'll remain to be seen how that changes in general, but it has led to a working group between HHS and CMS that we'll talk about. And then anecdotally, uh there's been some high-level departures of DOJ trial attorneys and AUSAs, but under the radar, there's been a lot of mass departures. Um much so that I think the market is flooded right now with former DOJ or with DOJ attorneys trying to leave for private practice. And in general, I think that's going to lose uh lead to a huge loss of institutional knowledge, um, which may or may not be a good thing for the targets of DOJ investigations. On the one hand, they they are not going to be um as efficient or as streamlined. But in my experience, on the defense side, dealing with an AUSA or DOJ trial attorney who's not particularly experienced can sometimes be more problematic than dealing with an experienced one.
SPEAKER_03:Yeah. Um thanks, Brandon. And and I guess I should wrap that whole sort of happening section up with uh a note on the government shutdown, which obviously impacted agencies far and wide. Um, you know, DOJ is pretty insulated from shutdowns given the work they do. Um HHS OIG similarly is insulated from shutdowns given how they're funded. But um one thing I did I did notice during the shutdowns, sort of for a combination of the factors, including departures and the shutdown, but also I think some uh various agency procedures around uh government attendance and speaking commitments at uh conferences and at webinars, uh somewhat less less visibility. Uh fewer, fewer of those folks attending uh those conferences, speaking at those conferences, um, and on webinars. Um if you you know if you attended those conferences, you you probably did notice an absence of government speakers or and again or the or the webinar space. Um so uh why don't we shift over to Brandon? You touched on this already, sort of new administration priorities that we've observed over the last 11, 12 months. Um I know that there's been you know some some uh expansion of priorities and and tools with the False Claims Act into different spaces we haven't necessarily seen before.
SPEAKER_02:Yeah, so um there's been a number of those. I mean, priorities in general still involve opioid trafficking, that's one of them. Uh Medicare advantages we'll touch on, uh COVID-19 fraud, although that's that fraud's not still happening, but it's still being investigated and prosecuted. Um but one of the biggest things uh shift in focus would have been the focus on DEI now. Um if you know, if you've been paying attention to the news, you know that this current administration is in a war against DEI. Uh regardless of how you feel about those programs, some people feel they didn't go far enough, some people feel like they went far too far too um in the favor of promoting certain things. Um regardless of how you feel, there is a real risk now for for companies who have not gone back and evaluated their DEI programs in terms of the one, the the external comments that they're making, so what's on their websites, what they've done in press releases, and then two, how their internal policies uh and and procedures look. And so every entity needs to be looking at that, especially healthcare entities that receive a lot of federal funding.
SPEAKER_03:Yeah, and I think there's also been a push towards um uh you know priorities in the immigration space as well, and whether that might have some um impact on uh False Claims Act, False Claims Act work and how the government may use the False Claims Act tools in that space. Um it's you know, I think it's presenting just new and different challenges for the industry and for the attorneys that represent the industry to uh to to sort of the expansion of the government's focus on different areas using familiar tools like the False Claims Act, um, where we're typically dealing with stark and kickback issues as the underlying uh predicate, you know, uh causation related to the submission of a false claim. Um so it certainly keeps us on our toes.
SPEAKER_02:So it's uh it's it's not something I would have expected before this year. If when when I first heard that the administration was trying to use the false claims act to go after civil rights issues related to DEI, I thought they'd have a hard problem. Uh it would be difficult for them to meet the three elements of a false claims act claim. And I still think that's true for pre-2025 conduct. But now with all of the press releases and memos that have been going out and attempts to change the attestations that have to be made when submitting uh applications and payment claims for payment to Medicare and other agencies, I think going forward, there's a real risk that if you aren't changing certain policies, you you may be facing a false claims act investigation.
SPEAKER_03:Yeah, something to watch out for, certainly. Um, and I think in that same vein, you mentioned, I think you referenced the joint working group. We we saw over the summer in July, um OIG and DOJ announced the it's not really new, it's a renewal of the the False Claims Act working group to strengthen the collaboration between those agencies and healthcare fraud enforcement. I think um helpfully and tellingly, they did include in that announcement certain priorities for their enforcement um objectives here, and those include uh Medicare Advantage, which we'll touch on in a moment. They also include uh the drug, device, and biologic pricing space, including rebates and price reporting. Um, they highlighted their enforcement will look into barriers to patient access, such as network adequacy violations, um, of course, kickbacks, and specifically the government referenced kickbacks related to drugs, devices, and durable medical equipment. Um, they also referenced uh enforcement around defective devices that impact patient safety and the manipulation of EHR systems to drive inappropriate utilization again is a key objective. So we'll touch on that in a moment as well. Um, you know, I think while collaboration between these agencies is nothing new, as we all know from our time there, that they work closely together on these cases and the underlying um you know policy issues of the day. Um, but you know, I think it's clear that the government's anti-fraud work is still alive and well, and we should at least take notice of these enforcement areas as we develop um you know our outlook to next year. Um, I noticed that CMS um recently hosted uh it was I think it was called Crushing Fraud Competition, and it was styled as a chili cook-off. Uh, I'm not sure if any chili was actually made in the process, but the idea was to foster competition in the industry. Um, and CMS was seeking expertise in machine learning models, you know, AI to detect anomalies in claims data, uh, which of course could drive future enforcement. And I think that's a key trend we're seeing here. It's not, again, nothing new, it's just getting better and more effective, but but the um ability uh of these agencies to apply data analytics um to detect fraud and then also to populate their their enforcement actions themselves, including the damages. Um But I think it all speaks to you know, the government's is clearly uh emphasizing its goals to prevent and detect fraud instead of you know pay and chase as it's been described. Um, you know, the government even last spring created effectively a fraud war room pilot program. Um so I think you know we're all still sort of under the uh very real notion that that these enforcement actions are going to continue um in the sort of record setting cases they always have. Um course you can juxtapose that, I think, a little bit with um early in the year in February, February, we saw the government um policy announcement, DOJ effectively reinstating the administration's prior prohibition on the use of subregulatory guidance documents, uh, those that have not undergone the sort of formal rulemaking process. Um the effects of this ban will play out on the courts, I think, and it will impact our defense work, certainly. And in some ways, it's been playing out since the Supreme Court decision in Loper Bright, sort of adjacent to this. Um, but I think you know it does give the defense bar some some fuel to combat allegations that stem from you know interpretations that we see in sub-regulatory guidance.
SPEAKER_02:Yeah, they will definitely have an effect on defending uh OIG investigations and DOJ investigations. Uh, this policy was kind of put into effect back during the first Trump administration. It was rescinded somewhat under the Biden administration, and now it's being brought back again. I think it can be helpful, especially in the early stages of a DOJ investigation, if it seems like they are relying on subregulatory guidance to drive the alleged uh fraudulent conduct, pushing back on that and explaining why the why the investigators can't use that can be helpful. Um it it stems from some Supreme Court cases that say that if guidance if agency guidance hasn't gone through the notice and rule uh comment making notice and comment rulemaking process, then it doesn't have the force of law. And so, based on that, as an example, like a local coverage determination or you know, an advisory opinion, if that's what DOJ is using to suggest that there's been a false claims act violation, that alone is not going to carry the day under the current administration. And so pushing back on that can be effective.
SPEAKER_03:Certainly, yeah, especially as you mentioned early on. Um, if you if you detect that that's really the basis for the claim, uh that can give you some some leverage in in understanding the real risk to the client there. Um well, how about some some trends we're we're seeing? We keep referencing uh Medicare Advantage. I know, Matt, you're following certain things in that enforcement space and other other areas. We've we've seen that trend continue to grow.
SPEAKER_01:Yeah, definitely. Um and and like you mentioned earlier, uh, you know, OIG is was expected or is expected. There's still a couple of weeks left in December to issue uh industry-specific guidance related to Medicare Advantage. And uh it would be great if we do get that. If not, I wouldn't be surprised if perhaps, you know, based on historical precedent, they they tie it to some some you know AHLA happening, some conference uh where they can make a public announcement and then you know issue it on online. Um but yeah, definitely uh, you know, the the government, DOJ, and OIG uh are definitely increasing their scrutiny of Medicare Advantage with more than half of Medicare beneficiaries have having some sort of Medicare Advantage plan. And there, while we've seen a handful of enforcement actions and resolutions with health plans and downstream providers in the past few years, a notable 2025 uh enforcement action was uh, as we're all probably familiar with, is DOJ's complaint against uh Aetna, Elevated and Humana, as well as three broker organizations, eHealth, Go Health, and so let quote. Um, that complaint alleges a kickback conspiracy to pay the brokers in exchange for enrolling patients into the MA Health plans. And I I I think that that kickback theory is not surprising given uh its apparent consistency with OIT's brush of fraud alert that was issued about a year ago, um, which potentially is about conduct that OIG is becoming increasingly concerned about. And as we've seen with historical precedents, if OIG takes a certain position about certain types of conduct, we see DOJ enforcement in the act in that area and um take you know action against entities that are uh allegedly violating the laws uh consistent with what OIG has sort of proclaimed in their guidance. So that case, I believe, was filed in the District of Massachusetts. That's definitely something to keep an eye on next year as uh the government ramps up its enforcement in that area. Um something you touched on was uh uh notice and common rulemaking. So we saw movement also in the RAME space this year in the Northern District of Texas. So CMS is a final rule. Um the the court there granted some rejudgments of the MA health plan, ruling that CMS had actually failed to appropriately follow the APA procedures when between the time that it had issued its proposed rule and its final rule, it had removed that fee-for-service adjuster from actual equivalence analysis. And not surprisingly, about a week or two ago, um the federal government appealed that decision, uh, given that actuarial equivalence is basically at the heart of and carries the day when you're talking about uh its formula and its analysis on reimbursement for RAD fee. So definitely something to keep an eye on and see how the government uh you know changes things in the interim or how the court at the circuit level rules um if they, you know, uh approve essentially of the summary judgment that was granted. Um, sort of a last area um to keep an eye on um that we've seen this year and and also We should keep an eye on next year as CMS rolled out its, you know, what it's called, quote unquote, an aggressive strategy to enhance and accelerate its RAD v audits. In that announcement, CMS had explained that it was going to attack that backlog that's been building up over the years, possibly by using AI. It says it's going to be expanding its workforce over 500-fold from 40 to 2,000 employees or contractors. It's also going to attack the remaining RAD V audits that need to be completed for payment years 2018 through 2024 by early next year. I don't know about you guys. I haven't really heard about any additional hirings or internal movements within CMS to increase that workforce to 2000, but we'll talk about this a little bit later. But we have seen a lot of movement in the AI space. So I wouldn't be surprised if perhaps that six years worth of backlog and Rad V audits is attacked first by using some sort of AI algorithm and then maybe spot checked or double-checked on the back end by those 2,000 employees or contractors to ensure consistency and accuracy and provision uh precision in that regard. I'm not sure what else you guys think about that.
SPEAKER_03:Well, I think that you know does sort of track with the uh the crushing fraud competition, which has you know the drive towards AI algorithmic uh solutions to go through claims data to find out, you know, find those anomalies and whatnot, um, as well as you know, the joint task force announcement um regarding you know their emphasis on EHR systems that that might um have sort of inputs that manipulate um factors that cause inappropriate, alleged inappropriate uh utilization, et cetera. Um yeah, Brandon, I don't know, do you have any other observations there on trends?
SPEAKER_02:Yeah, just well, a couple points on Medicare Advantage and then one other trend. In terms of Medicare Advantage, I think right now the focus from OIG and DOJ has been on the Medicare Advantage organizations themselves, like United Health and Humana, especially that lawsuit that's been that's being litigated right now against United Health. But I do think the trend is going to shift to the providers who are supposedly assisting in uh making those risk adjustment diagnoses that up the HCC score. So right now the focus is on the organizations, but I think it's going to turn to the providers who are are upcoding their diagnoses so that the MAOs get more money.
SPEAKER_01:Yeah, I've definitely observed a pivot in that regard too. We've you know historically seen over a couple of years against MAOs health plans themselves in that space, and then more recently, more actively on the provider space. So I would I would definitely agree that that is a trend to be aware of, possibly at beginning next year.
SPEAKER_02:And then one trend that's been happening for a while, but DOJ continues to crack down on lab companies. Since January of 2023, there have been at least 31 false claims act settlements involving lab testing companies. 17 of those involve kickback allegations, and 24 were initiated by whistleblowers. So it's it's definitely a space where DOJ is focusing. And I my firm has helped defend a few of these investigations, and what seems to happen in some of them is DOJ will find a corrupt salesperson or a corrupt marketing company or a corrupt doctor, and then they'll look at every person who that that person has worked with, and then they may initiate investigations into those people. So it's led to some settlements, it's also led to some innocent companies being caught in the crosshairs. So that is definitely happening. Um, one other important thing that happened from the first circuit just recently, there was a a decision from the OmniCare, Omni Healthcare, uh, false claims that case uh from the first circuit on December 1st of this year. Um, and it it said that a a lab can rely on the medical necessity of the doctor's decision to order the labs rather than having to necessarily question medical necessity themselves, which is consistent with OIG guidance, but now lends um lends more support since it's coming from a circuit court.
SPEAKER_03:Certainly, especially in the area of of the sub-regulatory guidance, uh, you know, uh questionable, questionable reliance on those documents. Um you mentioned COVID-19. Obviously, we're a couple of years past you know the official pandemic uh ending and and you know, in sort of what is a post-COVID world, but I think you know, we're still seeing those cases that uh where entities and individuals took advantage of the COVID era and some of the relaxed laws that may have applied and increasing funding. Um those cases continue, I think, to come through. We still see announcements. If you follow the listservs for the various agencies, you'll see those settlements come through. Um, think that'll continue for for a good bit here.
SPEAKER_02:Definitely. There actually was just a settlement that was released yesterday in a DOJ press release involving some Chinese companies that paid 3.7.3 million to resolve allegations involving fraudulent PPP loans. So I it's going to keep happening. There were there was so much money going out the door and not much oversight. It's going to take years for the different agencies to investigate those and prosecute them.
SPEAKER_03:Yeah. And one thing I've I've observed just recently, and again, mostly just because OIG was putting this content out recently, uh, back in September, a report on a call to action in the in the wound care space. Um, OIG's report highlighted that Medicare Part B expenditures for skin substitutes have skyrocketed over the last few years, uh, surpassing, I think, 10 billion annually by the end of 2024. Um, and and they cite OIG sites basically an increase in utilization as well as higher prices. Um, they also seem they focus on the fact that you know, despite that more than half of Medicare enrollees are in Medicare Advantage, that utilization that OIG was looking at primarily occurred in original Medicare. Um, and they highlighted that the cost disparity between treatment in the home versus treatment in the office setting. Um I think um just in the last couple of days, in fact, we saw uh, I think you know, sort of first of its kind prosecution, a wound graft company, uh sorry, wound graph, several wound graft company owners sentenced for their part in uh a$1.2 billion uh fraud case, including some uh civil liability they've got to settle, they've got to repay. Um, and and those essentially involved um alleged fraud around medically unnecessary wound grafts, as well as um claims that were tainted by illegal kickbacks and ultimately applied to you know elderly patients and terminally ill patients. So I think the the wound care space, you know, the government is clearly indicating it's it's gonna continue to focus on on that. I think the report recommends action by CMS and OIG and other agencies around that. So certainly a trend uh that that is worth paying attention to. Um we also had um, you know, I'm not sure if it's annually, but it's very frequent. We we get these national health care takedowns. I think notably this year, um, the the 2025 national takedown was the largest of its kind. Um they charged some 324 defendants, including 96 doctors, uh nurse practitioners, pharmacists, other medical professionals for their participation in various schemes. I think that the the intended loss number is something like$14 billion, which is more than double the previous record. Um and the schemes you know were far and wide. They included transnational organizations, foreign influence. Um, but again, I think here the government highlighted its work with data analytics in these efforts. Um and I think one other trend worth just hitting on here is in the DME space. Um following a series of audits and reports, OIG issued what looked to be sort of a consumer-focused, um, you know, beneficiary-focused uh video on its website highlighting the recurring fraud issues that it encounters in the DME space, including issues like upcoding, uh kickbacks, medical necessity, phantom billing, uh, telemarketing schemes, and identity theft. Um, and that video does reference the 2025 takedown and once again highlights OIG's use of and other agencies' use of data analytics uh for this enforcement work. Um any other you know, major cases settlements we should we should highlight here. I know we could we could spend hours on on that task. There's been some some major kickback settlements, you know, tens and hundreds of millions of dollars with large pharmaceutical entities and the what and and the like, but any specific issues y'all are tracking?
SPEAKER_02:Well, I I think one big issue that's it's been happening and it's gonna continue to happen until the Supreme Court weighs in is the constitutionality of the False Claims Act ketam provisions. The the main argument being that under Article II, executive power is is vested in the president, and that includes the ability to investigate and litigate on behalf of the United States to enforce the laws. And the argument is that when Congress wrote the False Claims Act Ketan provisions, giving random citizens the ability to initiate investigations and then litigate these actions, that usurped executive power and there therefore violates Article II. Um, I think most district court judges, as we've been seeing, have been upholding the False Claims Act. There's only been one court that did not, that found it unconstitutional. That's the Zaprov case. Uh the 11th Circuit just held oral arguments this week. Um, if I had to guess, I think the 11th Circuit is going to uh affirm, or I'm sorry, is going to reverse the decision finding the statute unconstitutional. But I know they're very worried about what's going to happen at the Supreme Court. Um Justices Thomas Kavanaugh and Barrett seem to seem to feel differently. They've issued some dissenting and concurring opinions where they're explicitly explicitly asking people to challenge the constitutionality of the false claims act so that they can evaluate that. And in some recent decisions from the Supreme Court, including the SEAL decision from a few years ago, this current Supreme Court seems very intent on maximizing executive power. And so if that trend continues, I could see the Supreme Court deciding that certain provisions of the False Claims Act are unconstitutional. Um so it we'll see what happens there, but it it's going to take some time to get to the Supreme Court, but I I I think we may lose some of those provisions.
SPEAKER_03:Yeah, certainly, certainly one to watch for all those reasons you've just cited. Um any other settlements or or other happenings you're you're tracking, Matt? Are you looking at any of the uh your the work of your former colleagues over at OSIG?
SPEAKER_01:Yes, uh and they've been just like DOJ quite busy. Um took a look at the data through the end of November, which is what has been public is publicly available as of you know the the time of this recording uh in terms of uh affirmative CMP. So those actions taken through the civil monetary penalties law, which uh loops in by reference the exclusion statute, um, OIG entered into 31 resolutions for nearly six million dollars. And I will note that a good chunk of those, about$2 million or so, were for alleged Mtala violations. So OIG has apparently ramped up its Mtala um enforcement actions. And I know that those uh take quite a bit of time to investigate and to to to have some sort of settlement. So perhaps those were you know in the works uh for maybe a year or two, but um a good chunk of that six million dollars uh in resolutions were for Mtala violations, so they've kind of they finally saw an end to those. Um in terms of affirmative exclusions, uh OIG affirmatively excluded 23 individuals and entities for a whopping total of 200 years in the aggregate. Um six of those actions, I will note that they were the exclusion action was taken because the individual or the entity defaulted on their payment obligations pursuant to an agreement that they had entered into with OIG or DOJ. And for those, um the exclusion length is indefinite until the payment obligations issue is resolved. So essentially the default has been lifted. Um a noteworthy exclusion, uh another one uh involved an entity's failure to provide information requested in an OIG subpoena. Um I don't know about you guys, but I hadn't really thought about that exclusion basis. I believe it was uh subsection B11. I hadn't thought about that in quite some time, and it's sort of a reminder to me. And uh, you know, as I advise clients that OIG's authority is really broad, it has a really broad reach and it's quite powerful. So if OIG uh you know issues a subpoena for information that requests, you know, so that they can shore up certain questions they have, the failure to respond, you know, even timely or at all, could cause that um the recipient to be excluded, which could have you know uh significant uh uh financial impact on them. Um in terms of provider self-disclosures, there were 84 resolutions amounting to$63 million. Uh that's where OIG sees a lot of its work and it's sort of its bread and butter in terms of recoveries. Um, the majority, as we've historically seen, uh involved in entity's alleged employment overcontracting with an excluded individual, which is, you know, that you know, over the years that has been uh one of the biggest areas that OIG collects uh in terms of self-disclosure resolutions. And then OIG also has uh a grant and contractor fraud self-disclosure protocol as well that they formally introduced and issued a couple of years ago. This this year there was only one resolution for$130,000. Now you might be thinking, okay, that's kind of low, but it's actually par for the course. Um so there were only two resolutions in 2024, five in 2023, and from 2018 to 2022, there were only five as well. So that one resolution this year is actually it looks to be standard. And I will note that that standalone uh resolution in the grant contract space is also for um that entity's alleged employment or uh contracting of an excluded individual, which uh in the grand contract space, if you do employ or contract with an excluded individual, it could cause you know certain uh costs that are reported to the government to be allegedly false because they were in connection with the provision of healthcare items and services. Um either of you want to add anything else to that, it's pretty much data driven at this point.
SPEAKER_02:And on the CMPL front, I I do think it'll be interesting to watch, similar to the challenges to the FCA, uh, based on the Supreme Court's Jarcosy decision, which I think came out in 2024, they rule that it's unconstitutional to for an and for an agency to uh place fines, fines on a company or an entity or a person, or exclude them from programs without a jury trial. I know there have been some court cases where that's already been challenged, and I think one at least one defendant's been successful. So it will be interesting to see if there if there's like a circuit split on that issue, and I think it would ultimately it'll get to the Supreme Court too.
SPEAKER_01:Yeah, definitely something to watch, watch uh because uh, you know, as the Congress created the statute for CMPs, you know, it gave OIG, you know, the secretary in particular, great, you know, leeway and uh great latitude to implement regulations relating to it. And so up until now they have been left unchallenged. So definitely a case to keep an eye on.
SPEAKER_03:And do you think, Matt, you mentioned sort of the fairly low number of grant-related fraud settlements um being fairly consistent across the years. Would do you expect maybe a shift in that space, given the government's broader, this administration's broader objectives uh sort of of preventing and detecting fraud and and the crushing fraud uh you know concepts?
SPEAKER_01:Yeah, I I think it is definitely a possibility. I think up until now, um, you know, there have been uh you know, the self-disclosure is sort of prima fascia evidence of an effective compliance program. OIG has said that repeatedly. Now, with the the growing uh sort of scrutiny on DEI, on gender-affirming care, transition care, and those sorts of areas that the government is interested in, those entities are contract and contract recipients, our grant awardees. And so, you know, we may see an uptick in self-disclosures as uh those entities take into consideration the executive orders and the forthcoming uh regulations that we are expecting as they take a look inside and within their organization to see if there's anything that is worthwhile self-disclosing, perhaps as you know, sometimes we advise clients to get ahead of a potential enforcement action or to you know self-disclose because it is something that now, given the legal landscape, has changed. And so therefore self-disclosure might be appropriate. So I think there is a possibility in 2026 and even beyond, we see an uptick in those kinds of self-disclosures.
SPEAKER_03:Yeah, something to watch, as you said. Yeah. Uh I'll just touch maybe on um advisory opinions. My the the industry guidance branch um, you know, issues advisory opinions sort of um with you know, only as presented by by requesters. So we never quite know how many they've got um on hand, you know, as sort of live issues. But um as we sit here mid mid-December, um, we've we've seen 10 opinions from OIG, 10 advisory opinions. Um, and and you know, historically there is kind of a flurry at the end of the year, so we may see a few more um between now and and uh 2026. But but putting that aside, we are at 10 today. Eight of those were favorable, two were unfavorable. Um, you know, the year started with an opinion, a favorable opinion in January regarding a program to provide free access to pharmaceutical products for patients who meet certain financial and other eligibility criteria and who didn't have coverage. Then we didn't see another opinion until April. Um, we saw a pretty busy summer with three issued in June, three in July, one in August, and one in September. And then again, nothing since then, as we sit here mid-December. Um, I would say that the trends in these, uh the various issues on ORG was looking at included charitable care, charitable support. Um, there were requests from the pharmaceutical industry, uh, requests that involved technology, uh, and then medical device uh requests as well. Um, for instance, you know, we saw favorable advisor opinion 2505. Um, this was regarding a proposed arrangement uh pursuant to which a medical device manufacturer would offer up to$2,500 to reimburse purchasers for the actual cost they incurred associated with a needle stick injury caused by the failure of the device that they manufacture, which was not supposed to permit needle sticks, essentially a warranty type question. Um we also saw unfavorable advisory opinion 2504 regarding a medical device company's proposal to pay the costs that its customers otherwise would incur for a third-party company to screen them and monitor them from for exclusion from federal healthcare programs, the area that you were just touching on, Matt. We saw uh favorable advisory opinion 2507 regarding a program operated by a pharmaceutical manufacturer to sponsor a companion lab test for eligible patients before a provider could could prescribe a certain drug that the manufacturer made. So kind of running the gamut this year. And again, we may see a few more uh in the last few weeks of December as as we might as well see uh maybe some industry specific uh compliance program guidance. Um well, with we've got a couple minutes left here to maybe touch on predictions. I know we've we've sort of layered them in as we go here. Um, you know, I mentioned Mentioned early on that the subregulatory guidance question that we're all following. I should put a plug-in for an AHLA article, great article on this topic in uh connections magazine issued. I think it was in September. So for future further reading, go check that out. Very in-depth dive onto what that guidance might look like. And again, I think that that one is a wait and see. Um, and and we will it will be up to I think the defense bar to um you know to make some progress on what that ban on the use of subregulatory guidance means for clients and for the litigation defense approach. Um, Brendan, you mentioned uh the FCA constitutionality piece. I think that that certainly is one to watch. Um I think arguments were recently held, you said, so we're sort of waiting for a decision. I'm not sure when we'll see that from the 11th circuit, and we'll see where they go from there. Um we keep touching on sort of data analytics, um, AI, things like that. Uh, you know, I think it's um it's here to stay, obviously, and it's getting it's getting better by the day. Where do you see that impacting your clients through practices these days? And and what and what that might mean next year?
SPEAKER_02:In terms of compliance programs, I mean, every every company probably has, and if they don't, they they need to have a governance policy for how they vet and implement new AI um programs, whether it affects patient care or coding or claim submissions, they they all need to be vetted. And what my colleagues who handle a lot of that have advised is that you need to treat AI like a new employee, um, and and sometimes like a bad new employee. And then you can't just stop doing that because you have to continue to monitor it because even if it's working fine right now, its inputs and outputs, it starts to shift how it does things. And so six months down the road, it might have a bias, you might be getting some hallucinations in whatever type of product you're using. So on that front, AI tools can be great, but they need to be monitored and be part of a compliance program. And then on the flip side, in terms of uh government use to investigate, I mean the government was already using pretty sophisticated data analytics tools to look at extreme outliers and then also potential you know fraudulent issues with the use of AI, and and this administration is definitely promoting the use of AI. I think those efforts are going to get stronger. And it's also going to lead to some false positives. So there are going to be some investigations that are based on AI that probably shouldn't have initiated because the AA is not going to get it right.
SPEAKER_03:Right. And I think, you know, similarly on the industry side where the MA does run afoul and potentially cause issues that um you know that may result in the submission of alleged false claims, I think that's gonna be an interesting thing for the for the attorneys to unpack, um, you know, specifically when we get into questions around uh intent and the like. Um you know, other technology issues, I think what else is out there, Matt? I know you had your hands on some info blocking uh updates and things we should all be looking out for here.
SPEAKER_01:Yeah, so you know, the OIG CMP authority for information blocking is pretty steep. It's a million dollars per alleged violation. Um, we we saw that final rule come down from OIG a couple of years ago, and then CMS created its disincentives final rule. Haven't really seen any uh enforcement in this area, although OIG did recently issue uh uh an alert, which I read as like a reminder to the public that, hey, you know, this is how you can report alleged, you know, information blocking if it's occurring, and it's a reminder to, you know, re-emphasize how steep the penalties are. I wouldn't be surprised if you know we started seeing overt investigations uh relating to information blocking in 2026. And and actually it's quite timely that, you know, OIG and I believe DOJ as well just recently issued job postings for senior attorney physicians uh specifically relating to this kind of conduct. So it looks like you know those federal agencies are looking to ramp up their investigations and they're trying to find personnel that will find a home at those agencies to specifically investigate information blocking. And uh perhaps that's a a sign to the public that they have whistleblower actions that they're sitting on and they're investigating, or they have hotline complaints that they've received and they just need the people to investigate them because I I would suspect potentially a reason is that it's overwhelming. Um, so they need additional people to be hired and they're looking for more senior attorneys, uh more experienced uh attorneys to most likely be effective and efficient in that. Um so I would I wouldn't be surprised if we started seeing that the the first information blocking settlement or overt investigation next year for sure.
SPEAKER_02:There's also some issue, two issues involving the anti-kickback statute that are developing and will continue to develop. I think one is the circuit split on butt four causation. More circuits continue to disagree with each other. So I think eventually that will get to the Supreme Court and that will a huge effect on those investigations and litigations going forward. The other one is um the Sorsen Sorensen case from the Seventh Circuit. And I know our practice group did a a webinar for that uh earlier in 2025, which is a if you haven't checked it out, it's a great webinar. But the the case involved it was a criminal case involving uh a DME company that was paying recruiters to to find uh doctors to to prescribe their DME products. Um but the problem was the recruiters they could request that these doctors prescribe the services, but the doctors had full discretion to say no. And so the the court found that even if there was a payment being made, it has to be it has to induce a person to make a referral or purchase a product. And here the doctors themselves could do ever could do it whatever they wanted to, and there were examples of where they refused to order the DME products. Um so it's DOJ has been aggressive in trying to take this approach, but this is going to scale it back some. Where it might work for non-providers would be if you're paying like an office manager who has a lot of control over which companies are chosen for various products, paying that person might still be effective. But if you're if you're paying someone to like a recruiting service to find these patients or these doctors and they don't have any influence over the person making the referral, it it's not going to be a kickback violation.
SPEAKER_03:And that was in the Seventh Circuit, if I'm not mistaken. So we'll see if other circuits pick up on that theme as we as we go forward here.
SPEAKER_02:And I have seen courts already apply from other circuits apply that decision.
SPEAKER_03:So well again, this is really just a quick take highlight reel um the things we are observing, following, working on this this past uh year, 2025. Um and as I mentioned at the outset, uh forgive us if late breaking news strikes uh in the weeks that follow this recording um uh uh you know at the end of December here. Um and again, Brendan, I want to uh Brandon, I want to plug the uh the fraud and abuse PG's year in review webinar. Uh I think that's taking place in February.
SPEAKER_02:Yes, that'll be on February 18th. So anything that happens between now and then, we'll try to update and give you uh the latest scoops on those issues.
SPEAKER_03:Excellent. Excellent. Well, I think that that's a wrap for us. Um thank you for listening in today. We appreciate it.
SPEAKER_02:Thank you very much. Thank you.
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