False Claims Act Defense
O’Melveny’s False Claims Act (FCA) specialists understand the unique litigation threats and compliance challenges that clients who do business with the government face.
Led by a team that includes former senior fraud prosecutors and career white collar defense attorneys, O’Melveny has deep expertise defending clients from a diverse array of industries at every stage of FCA investigation, enforcement, and litigation.
Our work has led DOJ to decline and, in some cases, dismiss relators’ FCA cases. We have also resolved state and federal government investigations with favorable outcomes before they became public. And in cases that have gone to court, we’ve won significant victories for FCA defendants. Equally important, our compliance advice and risk-mitigation strategies have prevented statutory and regulatory violations from occurring. These measures also provide crucial evidence for our clients when facing government inquiries or qui tam suits. O’Melveny’s white collar defense and litigation teams are also particularly well-suited to assist clients in defending the shareholder actions and congressional investigations that often follow on the heels of FCA matters.
The FCA is the federal government’s chief civil enforcement tool for investigating and pursuing alleged fraud against the government. Each year, the US Department of Justice (DOJ) seeks and obtains billions of dollars in FCA settlements and judgments. Over the last decade, it took in more than US$37 billion from FCA defendants.
A significant portion of FCA actions originate as sealed qui tam complaints brought by “relators”—private litigants with knowledge of the alleged fraud. Hundreds are filed every year, triggering DOJ investigations. As DOJ and relators’ counsel continue their aggressive pursuit of potential fraud claims, any entity or person that does business, directly or indirectly, with the U.S. government—or invests in companies that do government business—must understand and protect against FCA liability risk.
- Government Investigations and Enforcement. We advise companies, individual officers and directors, and other executives in investigations by DOJ, various federal Offices of Inspector General, State Attorneys General, and other regulators concerning alleged FCA violations. We also litigate actions in which DOJ is our clients’ direct adversary, including DOJ-initiated FCA suits and qui tam suits in which DOJ has intervened.
- Civil Qui Tam Litigation. In cases where the government declines to intervene and a qui tam relator pursues an FCA action to litigation, we have a long record of securing dismissals and successful settlements.
- Compliance and Risk Management. We work with clients to evaluate, develop, and enhance FCA compliance programs that meet their unique business objectives. For instance, we advise our health care clients on the requirements of the Anti-Kickback Statute, Medicare Secondary Payer Act, Medicare Advantage regulations, and other applicable regulations and certifications that may give rise to FCA risk. And we have a sophisticated data privacy and cybersecurity practice that advises on evolving government cybersecurity requirements that are emerging as a key priority for FCA enforcement going forward.
- Internal Investigations. When concerns about potential violations arise, our interdisciplinary team guides companies, boards, and audit committees through highly sensitive internal investigations, which we conduct to help clients assess FCA allegations and implement preventative measures. When regulators are involved, we actively advance the company’s interests while managing potential risk areas in related ancillary litigation.
- Parallel Proceedings. FCA suits are often accompanied by other litigation or government investigations, particularly where the allegations relate to newsworthy or controversial topics. Our team has extensive experience coordinating complex FCA matters alongside parallel proceedings such as shareholder suits, SEC enforcement matters, class actions, and congressional investigations, and we routinely counsel clients about navigating their defenses in parallel proceedings. And because many FCA actions originate through complaints by employee insiders, we regularly coordinate with our colleagues in O’Melveny’s Labor and Employment Group to defend our clients against related retaliation claims.
Ares of Expertise
- Anti-Kickback Statute
- Defective Pricing
- Pharmaceutical and Medical Device Marketing
- Cybersecurity and Data Privacy
- Medicare Advantage
- Medicare Secondary Payer
- SBA/CARES Act
- Stark Law
- Customs Duties
- Defense Contracts
- Federally-Insured Mortgages
Our experience includes:
- Defending a major national insurance company in connection with an FCA investigation by DOJ and HHS-OIG and subsequent litigation of an unsealed qui tam complaint alleging that the company failed to comply with Medicare Advantage diagnosis data submission requirements. O’Melveny won dismissal of several of the relator’s claims, leading to a successful settlement on the remaining claims. U.S. ex rel. Graves v. Plaza Medical Centers, No. 1:10-cv-23382 (S.D. Fla.).
- Defending a major bank and a large mortgage servicing company against FCA lawsuits alleging that they falsely certified compliance with Home Affordable Modification Program requirements. O’Melveny successfully negotiated settlements of each of these suits at a small fraction of the alleged damages. U.S. ex rel. Fisher v. JPMorgan Chase Bank NA, No. 4:16-cv-00395 (E.D. Tex.); U.S. ex rel. Fisher v. Ocwen Loan Servicing, LLC, No. 4:12-cv-543 (E.D. Tex.).
- Winning a significant victory on behalf of Humana in a relator’s appeal to the Eleventh Circuit, which affirmed the district court’s dismissal of the lawsuit with prejudice. The case represents an important holding for defendants in the FCA’s public disclosure bar jurisprudence. U.S. ex rel. Osheroff v. Humana, 776 F.3d 805 (11th Cir. 2015).
- Defending a health plan against FCA allegations that a vendor failed to comply with Medicare Advantage diagnosis data submission standards, causing the defendant to submit incorrect data to the government. O’Melveny helped the defendant reach a favorable settlement with DOJ. U.S. es rel. Ross v. Group Health Cooperative, No. 12-cv-0299S (W.D.N.Y).
- Defending major national managed care organizations against FCA allegations relating to compliance with Medicare Advantage regulations, including allegations related to inflated premiums resulting from chart review practices of contracted providers and in-home assessment vendors. O’Melveny has achieved dismissals of two clients from such matters, and secured a favorable settlement with DOJ in another matter. U.S. ex rel. Swoben v. SCAN Health Plan, No. 2:09-cv-05013 (C.D. Cal.); U.S. ex rel. Ramsey-Ledesma v. Censeo Health, LLC, No. 3:14:000118 (N.D. Tex.); U.S. ex rel. Silingo v. Mobile Medical Examination Servs., Inc., No. 8:13-cv-01348 (C.D. Cal.).
- Representing Humana in ongoing litigation defending against FCA allegations related to the Medicare Part D bid process. U.S. ex rel. Scott v. Humana, No. 3:18-cv-00061 (W.D. Ky.).
- Defending Anthem in an FCA investigation and subsequent litigation involving allegations that its Medicare Advantage business improperly retained payments based on potentially invalid diagnosis data in connection with its chart review practices. United States v. Anthem, Inc., No. 20-cv-02593 (S.D.N.Y.).
- Defending Kaiser Permanente entities against FCA allegations related to medical record documentation and coding standards in the Medicare Advantage program. U.S. ex rel. Osinek et al v. Kaiser Permanente, No. 13-cv-03891 (N.D. Cal.).
Investigations and Strategic Counseling
Our experience includes:
- Representing a large medical device manufacturer in connection with a DOJ investigation into two FCA complaints predicated on alleged violations of the Anti-Kickback Statute.
- Representing a large transportation industry client in an FCA investigation into allegedly inflated rates charged to a government agency.
- Representing a major defense contractor in connection with a DOJ investigation into FCA allegations related to alleged labor mischarging under government contracts.
- Representing a Pharmacy Benefits Manager (PBM) in a DOJ investigation of a qui tam complaint alleging industry-wide inflation of pharmaceutical prices as a result of PBM pressure on pharmaceutical companies to keep prices high in exchange for rebates and increase fees at the government’s expense. O’Melveny’s advocacy in this matter resulted in a declination for our client.
- Representing a vitamin and supplement manufacturer and distributor in response to allegations that false claims were submitted in filings with Customs and Border Protection related to the import of goods into the United States.
- Counseling a leading medical device manufacturer through parallel DOJ civil and criminal investigations of a qui tam complaint alleging a kickback scheme for reimbursement of defective devices in violation of the FCA.
- Representing numerous Medicare Advantage Organizations in responding to Civil Investigative Demands issued by DOJ in FCA investigations related to Medicare risk adjustment, Medicare Part D, the Anti-Kickback Statute, and other federal health care laws and regulations.
- Counseling numerous health care, life sciences, and defense contractor clients about the FCA risk implications of proposed business practices.
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