What's Next For DOJ's COVID Enforcement In Health Care

• Published date: 19 September 2022
• Subject Matter: Food, Drugs, Healthcare, Life Sciences, Compliance, Coronavirus (COVID-19), Biotechnology & Nanotechnology, Reporting and Compliance, Litigation, Contracts and Force Majeure
• Law Firm: Arnold & Porter
• Author: Mr Mahnu Davar, Suneeta Hazra and Howard Sklamberg

The onset of the COVID-19 pandemic and the Jan. 31, 2020, public health emergency declaration that followed pushed those of us working in the life sciences and health care industries into uncertain waters.

Drug sample delivery, pharmaceutical industry educational programs, routine and COVID-19 related patient care visits, rollout of timely diagnostic and surveillance testing and personal protective equipment, and ongoing data collection in open or new clinical trials are just a sample of the issues that had to be addressed.

Business and patient care exigencies soon outpaced the capacity of state and federal regulators to react ' the regulators themselves facing staffing shortages, difficult and unprecedented questions, and technological challenges.

Centers for Medicare and Medicaid Services policy statements, U.S. Food and Drug Administration draft guidances and town hall pronouncements, governors' emergency declarations and waivers, and trade and professional society self-regulatory guidance were issued and updated frequently.

Often, these regulatory changes were announced in podium policy or communicated in technical advisory meetings or private correspondence prior to being announced in formal guidance documents. The result was a patchwork of temporary policy pronouncements that bypassed traditional notice and comment procedures.

In this fast-changing ad hoc environment, the vast majority of health care and life sciences companies sought to serve the public health and to comply with regulators and the shifting regulatory landscape as best they could.

The uncertainty and fear caused by the COVID-19 pandemic however, created an environment vulnerable to fraud and unamenable to routine oversight. Now regulators, investigators and prosecutors have been working hard ' and, in some eyes, overzealously ' to uncover and punish such conduct.

As we enter the end of the third year of the COVID-19 pandemic, a few fraud-related enforcement trends and risks have emerged. These trends and risks include:

• Limited prosecutorial leniency despite new and sometimes unclear COVID-19-related regulatory requirements and guidance;
• Creative enforcement strategies to implement COVID-19-related enforcement goals and priorities;
• Continued and potentially increased enforcement of fraud surrounding products that are important in fighting COVID-19 and
• Increased scrutiny of telecare reimbursement claims.

Limited Prosecutorial Leniency Despite New and Sometimes Unclear COVID-19- Related Regulatory Requirements and Guidance

We have already seen evidence in ongoing criminal and civil actions that the government often does not view the lack of clarity from regulators and policymakers as a bar to relying on pre-pandemic enforcement norms.

Thus, we predict that the private sector may have limited success arguing to the government that it made decisions contravening pre-pandemic norms to meet clinical needs in a shifting regulatory environment during an unprecedented pandemic. The government, whether it be the U.S. Department of Justice, FDA, U.S. Department of Health and Human Services or state attorneys general, may well bring charges regardless.

Additionally, health care fraud statutes have long statutes of limitations. In particular, the Federal Food, Drug and Cosmetic Act, False Claims Act, Medicare Fraud Statute and related laws generally have statutes of limitations ranging from five to 10 years.

While the compliance bar often observes that enforcement trails conduct by three to five years, the pandemic could extend this trail.

For example, undetected overbilling when hospitals and other providers were short-staffed during the pandemic or continued billing for certain types telehealth services after the expiration of insurer policy changes could create latent liability that may not be discovered by billing or compliance personnel ' or CMS or private insurance auditors, for that matter ' until years later.

In short, the window of time for health care and life sciences companies to evaluate compliance issues is starting to close, as motivated prosecutors or disaffected employees start reviewing companies' activities and conduct with fraud enforcement in mind.

Creative Enforcement Strategies to Implement COVID-19-Related Enforcement Goals and Priorities

Prosecutors are going to get more creative. With government leadership prioritizing COVID19 fraud, line civil and criminal assistant U.S. attorneys and agency chief counsel's offices are continually evaluating ways to build cases they believe...