In the second blog post of our series on healthcare chief compliance officers and lawyers accused of “going bad,” we discuss Texas attorney Peter J. Bennett (licensed since 2007) who was charged in the Eastern District of Texas in February 2022 (and in a December 2022 superseding indictment) with conspiracy to commit money laundering, conspiracy to operate an unlicensed money transmitting business, and two counts of perjury in relation to an illegal kickback-for-referral scheme. Bennett was convicted of all counts after a five-day jury trial on July 14, 2023 and is now awaiting sentencing.
Legal Insights and Perspectives for the Healthcare Industry
The US Department of Justice (DOJ) announced on June 8, 2023 that Steven King, a compliance executive of pharmacy holding company A1C Holdings LLC, was convicted of defrauding Medicare out of more than $50 million in a scheme involving dispensing medically unnecessary lidocaine and diabetic testing materials.
The Antitrust Division of the US Department of Justice has withdrawn three longstanding enforcement policy statements regarding the exchange of competitively sensitive information in healthcare markets, e.g., through market benchmarking surveys. While the recission of the guidance does not itself change the law on competitors exchanging competitively sensitive information through intermediaries, our antitrust and competition team explains how the move signals potential increased federal scrutiny of that practice.
The recent increase in use of telehealth as a care modality has been important to patients and providers alike, with significant benefits for public health. However, with the growing mainstream acceptance of virtual care, the US Department of Health and Human Services Office of Inspector General (OIG), the Department of Justice (DOJ), and other federal regulators have likewise increased fraud enforcement in this area, including through the issuance of OIG’s recent Special Fraud Alert (SFA).
The new Civil Cyber-Fraud Initiative of the US Department of Justice’s use of the punitive False Claims Act (FCA) and its whistleblower provisions has some important legal and risk management considerations for the health industry. Because enforcement will initially occur largely through civil investigations applying the FCA in the broadest possible way, healthcare organizations should undertake a priority assessment of their cybersecurity status to ensure that their practices can withstand hacks, whistleblowers, and government scrutiny.
The US Federal Trade Commission (FTC) recently voted to withdraw its approval of the Vertical Merger Guidelines (the 2020 VMGs), which, as we covered in the past, the FTC and Department of Justice (DOJ) issued over a year ago on June 30, 2020. The vote on September 15, 2021 to rescind the policy statement broke along party lines, with the three Democratic commissioners—Chair Lina Kahn and Commissioners Rohit Chopra and Rebecca Slaughter—outweighing their two Republican colleagues—Commissioners Noah Joshua Phillips and Christine S. Wilson.
On the heels of the US Department of Justice’s (DOJ’s) Criminal Division Fraud Section releasing its annual Year in Review, our white collar team published a LawFlash discussing the report, which highlights DOJ’s sustained aggressive enforcement efforts despite the COVID-19 pandemic.
The US Department of Health and Human Services Office of Inspector General (OIG), the Department of Justice (DOJ), and other federal regulators have grown increasingly concerned about the use of telehealth technologies by perpetrators of various fraud schemes. While this is in part due to the meteoric rise in use of telehealth services during the past year and the need to quickly formalize permanent policy around the technology, the federal government’s concern extends well before the COVID-19 public health emergency (PHE).
Insight from our antitrust team was recently featured in an article for the American Health Lawyers Association’s Journal of Health and Life Sciences Law.
On December 8, 2020, Judge Gerald Pappert in the US District Court for the Eastern District of Pennsylvania denied a request from the Federal Trade Commission (FTC) and Pennsylvania attorney general (AG) to preliminarily enjoin a proposed merger between Thomas Jefferson University (TJU) and Albert Einstein Healthcare Network (Einstein). The case was widely watched as the FTC sought to show that the combination of these two urban hospital systems would harm consumers.