Tag Archives: Government Investigations

Insurance Coverage Considerations for Alleged Mislabeling of Herbal and Dietary Supplements

In the wake of the New York Attorney General's recent enforcement actions against four major retailers who allegedly sold herbal supplements that did not contain labeled ingredients or contained ingredients not explicitly identified on the labels, companies throughout the supply chain should consider examining their insurance policies to see whether or not they are sufficiently covered in the event of an investigation, enforcement action and/or litigation. Types of insurance policies that may provide coverage for affected companies are commercial general liability (CGL), directors and officers liability (D&O), errors and omissions liability (E&O), and product recall.… Continue Reading

Insights About Future Use of Protected Health Information Under HIPAA

In "HIPAA Enforcement: The Next Step," an interview and accompanying article that appeared on HealthcareInfoSecurity on October 14th, Reed Smith partner Brad Rostolsky details the HIPAA-related trends that he expects to see within the next several years. Among these predicted trends is an increase in the number of investigations by the Department of Health and Human Services' Office for Civil Rights regarding the illegal use and distribution of Protected Health Information without the permission of patients, a result of tightened regulations introduced in last year's HIPAA Omnibus Rule. Brad also discusses how companies should prepare for HIPAA compliance audits, the use of health information on social media, and potential privacy issues surrounding wearable consumer health devices.… Continue Reading

Exclusion Rules For Those Who Receive Funds From Federal Health Care Programs May Get Even More Complicated

The Office of Inspector General (OIG) of the Department of Health and Human Services identifies the underlying purpose of its exclusion authority as to protect federal health care programs and their beneficiaries from "untrustworthy health care providers, i.e., individuals and entities who pose a risk to program beneficiaries or the integrity of these programs." The OIG now has published a new proposed rule that would greatly expand the bases upon which it could affirmatively exclude an individual or entity from participation in federal health care programs. Reed Smith has prepared a Client Alert that provides an overview of the Proposed Rule, including: proposed revisions to definitions; new grounds for exclusion; clarifications to existing regulations to add mitigating and aggravating factors; early reinstatement procedures; and proposed procedural changes in the OIG's exclusion authorities.… Continue Reading

Recent OCR Enforcement Activities Cause Serious Case of Déjà Vu: Theft of Unencrypted Laptops Leads to Two Separate HIPAA Settlements

Two separate instances of unencrypted laptop theft from different health care providers have resulted in two settlements for potential violations of the HIPAA Privacy and Security Rules. These alleged violations were uncovered following investigations by the Department of Health and Human Services, Office for Civil Rights (OCR). In the first instance, involving Concentra Health Services, OCR found that Concentra had previously recognized its need for increased encryption on its technological devices but had failed to fully address this issue before the breach. In the second instance, involving QCA Health Plan, Inc. of Arkansas, OCR found that QCA had failed to comply with multiple requirements set forth by the HIPAA Security Rule. Both instances resulted in settlements comprised of financial payments to OCR as well as agreement to Corrective Action Plans that will allow for continued oversight by OCR in regards to HIPAA compliance.… Continue Reading

Are Internal Compliance Investigations Privileged? D.C. District Court Rules No

We want to alert life sciences and health care entities to a recent decision out of the U.S. District Court for the District of Columbia. On March 6, 2014, the U.S. District Court for the District of Columbia granted a qui tam relator's motion to compel the production of documents relating to the defendant Kellogg Brown & Root Services, Inc.'s (KBR's) "Code of Business Conduct (COBC) investigations," holding such documents were not protected from disclosure under either the attorney-client privilege (ACP) or the attorney work product doctrine (AWP). The court concluded that the company's investigations were conducted pursuant to "regulatory law and corporate policy," rather than for the purpose of obtaining legal advice. Accordingly, KBR was ordered to produce some 89 documents that it previously claimed as privileged under the ACP and/or AWP. U.S. ex rel Barko v. Halliburton Company, No. 1:05-CV-1276 (D.D.C., March 6, 2014). The court's broader statements could have significant implications for companies in regulated industries where corporate compliance programs are commonplace, or even required.… Continue Reading

China’s Life Sciences Regulatory Crackdown: September 10 Update

The regulatory enforcement environment in China remains tense, as both the Chinese government and media bring new actions and allegations against life sciences manufacturers in both the pharmaceutical and device sectors. We are seeing: Increased attention to medical device sector Enforcement actions spreading to smaller cities Continued pressure on pharmaceutical sector Reports of misconduct by … Continue Reading

Government Investigations: Don’t Forget About D&O Insurance When That Subpoena Arrives

This post was written by Mark S. Hersh and Paul E. Breene. Government investigations can be both time-consuming and hugely expensive. Earlier this year, the U.S. Department of Justice and the U.S. Department of Health and Human Services announced that its 2011 health care fraud prevention and enforcement efforts resulted in record-breaking recoveries totaling more … Continue Reading

Supreme Court Rules That Juries – Not Judges – Must Determine Facts Supporting Large Criminal Fines

The Reed Smith Global Regulatory Enforcement Law blog has an interesting post about a recent U.S. Supreme Court ruling that protects the Sixth Amendment rights of defendants in high-stakes criminal cases. In Southern Union Co. v. United States, the Court ruled that any fact supporting a “substantial” criminal fine must be found by a jury … Continue Reading

Pennsylvania Federal Court Undercuts Attorney-Client Privilege To Force Disclosure of Information from Internal Company Investigation

Over on the Reed Smith Global Regulatory Enforcement Law Blog, there is an interesting post about a recent Third Circuit opinion concluding that there is no immediate avenue to challenge a court order invading the protections of the attorney-client privilege unless the subject first suffers a judicial contempt citation and risks fines and imprisonment.  In … Continue Reading

Notes on the National Summit on Health Care Fraud

Last week, in my capacity as president of the American Health Lawyers Association, I attended the first National Summit on Health Care Fraud, a joint undertaking by the U.S. Department of Health and Human Services and the U.S. Department of Justice. The conference brought together private sector leaders, law enforcement personnel, and health care experts as part of the Obama Administration's coordinated effort to fight health care fraud. This was the first national gathering on health care fraud between law enforcement and the private and public sectors.… Continue Reading

Hospital Agrees to Pay $700,000 To Texas AG For Allegedly Orchestrating an Insurer Boycott of Competitor

In a time of economic crisis, when hospitals, like most other businesses, are struggling to operate within a constrained budget, Memorial Hermann Healthcare System ("Memorial Hermann") agreed Jan. 26, 2009 to pay $700,000 to settle claims of the Texas Attorney General alleging that Memorial Hermann orchestrated an agreement among health plans not to do business with a new competitor, Town and County Hospital ("Town and Country"). According to the complaint, Memorial Hermann, which owns and operates acute care hospitals furnishing inpatient care, is the largest hospital system in the Houston area. Town and County, a physician-owned hospital, opened in November 2005. Before opening, Town and County approached insurers to enter into contracts to be included in those insurers' hospital networks. Memorial Hermann allegedly took steps to discourage insurers from entering into contracts with Town and Country, including sending notification of an intent to terminate its contract with one insurer as to all Memorial Hermann facilities, and subsequently renegotiating a contract with the insurer for substantially higher rates.… Continue Reading

Current Issues Under The Civil False Claims Act: Worthless Services, Off-Label Use, and More

Recent posts on www.lifescienceslegalupdate.com include: "Current Issues Under The Civil False Claims Act: Worthless Services, Off-Label Use, and More" which briefly identifies relevant criminal and civil provisions relating to these issues, and then focuses more closely on recent uses of the civil False Claims Act ("FCA") in government investigations of health care providers, suppliers, and manufacturers, including a section on state false claims legislation. Finally, it discusses the issue of distinguishing overpayments from false claims and provide information on the voluntary disclosure program of the Office of the Inspector General ("OIG") of the Department of Health and Human Services (HHS). http://www.lifescienceslegalupdate.com/2009/01/articles/product-liability/offlabel-use/current-issues-under-the-civil-false-claims-act-worthless-services-offlabel-use-and-more/ ...and "Life Sciences Industry Members Who Contract With Government Should Note Recent Amendment to the Federal Acquisition Regulation" which discusses an amendment to the Federal Acquisition Regulation ("FAR") to establish: (1) mandatory disclosure requirements for certain violations of federal criminal law and the False Claims Act; (2) requirements for contractors to establish and maintain specific internal controls to detect, prevent, and disclose improper conduct in connection with the award or performance of any government contract or subcontract; and (3) new causes for suspension and debarment. See 73 Fed. Reg. 219, 67,064 (Nov. 12, 2008). http://www.lifescienceslegalupdate.com/2009/01/articles/regulatory-developments/life-sciences-industry-members-who-contract-with-government-should-note-recent-amendment-to-the-federal-acquisition-regulation/… Continue Reading
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