Regulatory Litigation Attorneys

Regulatory Litigation Attorneys

The seasoned regulatory litigation attorneys at Kendall PC have extensive experience serving as general, litigation, and special counsel to a wide variety of regulated industry organizations and entities. Our regulatory litigation team possesses combined backgrounds in regulatory, corporate, and commercial compliance and litigation to assist clients with government investigations and related regulatory litigation and settlement discussions, including Corporate Integrity Agreement (CIA) negotiations, Consent Decrees and the like. 

For more information on our regulatory litigation practice, contact our office today online or at (484) 414-4093. We proudly serve small, emerging, and mid-size businesses throughout the United States and across the globe.

Regulated Industry Fraud and Abuse Regulations

Companies face numerous challenges related to operating within a highly regulated industry. Kendall PC has extensive experience in these fields to provide comprehensive support and help companies navigate the complex compliance and regulatory issues involving corporate and government enforcement matters, including those listed below. We have the in-house legal and technological capacity to handle dockets of cases and often collaborate with other defense counsel to coordinate strategy and pool case resources in large litigation lawsuits.

Federal Food, Drug and Cosmetic Act Defense 

The Federal Food, Drug, and Cosmetic Act (FDCA) regulates the safety of tobacco products, cosmetics, medical devices, prescription and non-prescription (OTC) drugs, dietary supplements, color additives, food additives, and most foods. The U.S. Food and Drug Administration (FDA) primarily enforces the FDCA through examinations and pre-market reviews of certain products. It also investigates and disseminates information to the public. The FDCA prohibits distribution in the U.S., or importation of, “adulterated” or “misbranded” covered products. Specifically, the FDCA makes it illegal to introduce a covered product directly or indirectly into interstate commerce that is “adulterated” or “misbranded” within the meaning of the Act (respectively, depending upon the nature of the underlying covered product). 

The FDA has significant authority to promote compliance with and enforce violations of the FDCA. This enforcement authority includes issuing warning and untitled letters, import alerts and product recalls to regulated entities in violation of the FDCA. However, because the FDA does not have the authority to litigate independently, it works in coordination with the Department of Justice (DOJ) to enforce the FDCA through product seizures, injunctions, or civil penalty proceedings. The DOJ and FDA may also collaborate on bringing criminal charges against regulated entities for serious FDCA violations. Criminal penalties may include significant criminal fines and imprisonment.

In addition to DOJ, several other agencies have enforcement roles under the FDCA. This includes the U.S. Customs and Border Protection (CBP) relating to imports of FDCA-regulated product and the Federal Trade Commission (FTC) relating to advertising of over-the-counter (OTC) drugs and medical device advertising. FDA has also entered in memorandum of understanding (MOU) with other government agencies including the U.S. Department of Agriculture (USDA), the Department of Treasury, the Department of Defense (DoD), and the Centers for Disease Control (CDC). 

False Claims Act Defense

The False Claims Act (FCA) imposes liability on individuals and entities who submit a claim for reimbursement to the U.S. federal government that he or she knows, or should know, is false. Under the FCA, it is a violation to knowingly present or cause the presentation of a fraudulent or false claim for payment or approval to the U.S. federal government. It is also a violation for knowingly using, making, or causing a false record or statement to be made or used for the purpose of obtaining a fraudulent or false claim for reimbursement to be paid by the U.S. federal healthcare programs, such as Medicaid or Medicare. However, the civil FCA requires no showing of specific intent to defraud. 

The filing of a false claim can lead to fines of up to three times the federal programs’ loss, in addition to an $11,000 fine per filed claim. Additionally, under the FCA, every instance of a service or item billed to a federal program is considered a separate claim. There is also a criminal provision of the FCA. Criminal penalties for submitting false claims include imprisonment and criminal fines. The result is that FCA violations can lead to severe civil and criminal penalties and jeopardize the reputation of your company.

The civil FCA includes  a whistleblower provision that permits private individuals to file lawsuits on behalf of the federal government. It also entitles whistleblowers to a percentage of any recoveries. Many times, whistleblowers are disgruntled ex-employees who meet with lawyers to seek employment claims and then learn about the whistleblower provisions afforded in the FCA. Ex-business partners may contact a lawyer to file a breach of fiduciary duty lawsuit and then discover the potential monetary benefits of pursuing a whistleblower claim.

Additional Fraud and Abuse Claims for Life Sciences and Healthcare Organizations 

One aspect of our litigation practice is defending life sciences and health care companies. In addition to those above, entities in the life sciences and health care sectors commonly face claims involving fraud and abuse regulations, including the physician self-referral law, fee-splitting law,  federal and state-related anti-kickback statutes and federal False Claims Act. 

Physician Self-Referral (Stark) Law Defense

Commonly referred to as the Stark Law, the Physician Self-Referral Law prohibits physicians from referring patients to receive designated health services (DHS) payable by Medicaid and Medicare from parties with whom the physicians or immediate family members have  financial relationships, unless an exception applies. A financial relationship can include both ownership and investment interests as well as compensation arrangements. The Stark Law also prohibits the submission of claims by health-industry entities to Medicare and Medicaid for services based upon a physician’s referral that is prohibited by the Stark Law.

The Stark Law prohibits submitting a claim to a federal healthcare program that violates the law’s restrictions on referrals. The Stark Law is a strict liability statute, meaning that no specific proof of intent to violate the law is required. 

Sanctions for Stark Law violations include the following; 

  • Denial of payment for DHS furnished pursuant to a prohibited referral.
  • Refund of collected payment for DHS furnished pursuant to a prohibited referral.
  • Imposition of civil monetary penalties.
  • Exclusion from federal healthcare programs.

Fee-Splitting Law Defense

The term “fee-splitting” refers to the practice of sharing fees with professional colleagues in exchange for the referral of a client or patient. For example, a physician recommends physical therapy and refers a number of patients to a clinic from which he or she receives a fee or benefit. 

Anti-Kickback Statute Law Defense 

Federal and state anti-kickback statutes (AKS) are criminal statutes that prohibit an entity to  give, accept, solicit, or arrange items of value in any form to reward or induce another party for referrals of services paid for or by a state and/or U.S. federal healthcare program. Such inducements are considered kickbacks and are illegal. Improper incentives include those paid directly or indirectly, and might be cash, gifts/items of value, or in-kind items. The AKS is premised on the idea that a physician’s judgment should not be clouded by motives of personal gain. The AKS prohibits or restricts many common business operations and is applicable to both the offerors of remuneration and the recipients of same. Essentially, the anti-kickback statute is a criminal prohibition against any payments made purposefully to reward or induce the referral or generation of business that involves a service or item payable by federal healthcare programs such as supplies, drugs, or healthcare services for Medicare, Medicaid, TRICARE or CHIP patients. 

Administrative sanctions and criminal penalties for AKS violations include jail terms, fines, and exclusion from participation in federal healthcare programs. 

False Claims Act Defense for Life Sciences and Healthcare Organizations

Although the False Claims Act generally applies to any false claim submitted for payment to any federally funded program, the government has primarily utilized the FCA as a tool to combat health care abuse and fraud. The FCA can be implicated in the life sciences and health care sectors because of federal government purchase of prescription drug or device products or reimbursement for services under the federal healthcare Programs such as Medicare, Medicaid, and TRICARE. 

Notably, in instances where a false claim is the result of a kickback or is made in violation of the Stark law, the government has alleged that such violations may also render the claim false or fraudulent, creating additional liability under the civil FCA (in addition to any liability under the AKS or Stark law). 

Common allegations of healthcare fraud and abuse under the FCA include:

  • Anti-Kickback Statute violations
  • Stark Law violations
  • Clinical trial fraud, including fraud and misconduct related to federally-funded research or research fraud
  • Allegations Involving Medical Necessity, including Performing Inappropriate or Unnecessary Procedures
  • Allegations Involving Billing Fraud, including “Phantom Billing,” “Double Billing, “Up Coding,” and Charging for Equipment and/or Supplies Never Ordered or Used
  • Allegations Involving Good Clinical and Manufacturing Practice
  • Allegations Involving Formulary Management Fraud

In recent years, the government has also alleged that liability for a pharmaceutical or medical device manufacturer may arise under the FCA in circumstances in which the manufacturer promotes or markets a product in a false or misleading manner, including for an approved product for a use not approved by the FDA (also known as “Off-Label Promotion”). 

FDA Debarment and Office of Inspector General (OIG) Exclusion from Federal Health Care Programs Defense

FDA has authority to debar entities and individuals under the FDCA. Specifically, FDA is required by statute to debar individuals convicted of felonies related to the approval or development of any drug products or conduct relating to the regulation of any prescription drug product. Debarment is an enforcement proceeding that bars an individual from working in any capacity in the prescription drug industry. This has been interpreted as a complete bar – all employment, contracting and/or relationships with a debarred individual is completely forbidden. 

The U.S. Office of Inspector General (OIG) can exclude entities and individuals from participating in federal healthcare programs for a number of reasons, including a Medicare or Medicaid fraud conviction. Once an individual or entity is excluded, no payment can be made for any services or items furnished by such excluded individual or entity. OIG maintains a list of currently excluded entities and individuals. Additionally, organizations who hire excluded individuals or entities on the OIG exclusion list may be subject to civil monetary penalties.

Comprehensive Services for Regulated Industries

In addition to our litigation services, we offer a range of compliance and regulatory solutions specifically designed for companies that operate within US-regulated industries. We provide strategic counsel to regulated industry clients at every stage of business, from developing preventative measures to limiting or minimizing potential product liability exposure. Kendall PC can help with nearly every aspect of your business, including:

  • Regulatory approvals
  • Commercial operations
  • Sales and marketing
  • Regulatory and compliance issue
  • Clinical, quality assurance, and safety issues
  • Crisis management and vulnerability audits
  • Website development and internet strategies
  • Supplemental staffing

We measure our own success by the success of our clients. We view ourselves as your partner and treat your business with the same care as we treat our own. 

Contact Our Regulatory Litigation Attorneys Today

For more information on our regulatory litigation practice, contact our office today online or at (484) 414-4093. We proudly serve companies throughout the United States and across the globe.

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