Grassley presses CMS on anti-kickback enforcement

Sen. Charles Grassley (R-IA) is investigating reports from qui tam attorneys who claim the U.S. Department of Justice (DOJ) is putting health care fraud prosecutions on the back burner. Grassley, the ranking Republican on the Senate Finance Committee and author of the amendments that essentially resurrected the False Claims Act in the mid-1980s, is specifically targeting the Centers for Medicare & Medicaid Services (CMS) Administrator Tom Scully and the DOJ for lax enforcement of False Claims Act anti-kickback cases.

In a June 25 letter to Health and Human Services Secretary Tommy Thompson and the DOJ, Grassley wrote that recent comments by Scully raise concerns about efforts to change or modify enforcement policy that could undermine the False Claims Act. He pointed to a recent Senate hearing in which Scully said DOJ’s prosecution decisions regarding a specific False Claims Act case were "beyond comprehension." It was learned later that Scully was referring to the massive HCA settlement, Grassley claimed.

However, several seasoned observers say Grassley’s investigation largely is a function of his protective instincts concerning the False Claims Act. "Grassley takes great ownership interest in the False Claims Act," says Marie Infante, a health care attorney with Mintz Levin in Washington, DC.

Infante says she sees no relaxation in health care anti-fraud efforts. She says the real question is whether the government is prosecuting less fraud or if there is just less fraud to prosecute.

"I certainly don’t see DOJ being at all lackadaisical in its enforcement of the False Claims Act in the context of health care," says Bill Sarraile, a health care attorney with Arent Fox in Washington, DC. "From the provider perspective, there are still ongoing concerns about providers being too aggressive."

Sarraile argues that CMS generally has been supportive of DOJ’s efforts. For example, he notes that in the final Stark II rules, CMS articulated that a violation of Stark can be a violation of the False Claims Act. "That gave the Department of Justice a better basis to proceed with those kind of cases," he says.

Grassley maintains that his concerns go beyond the case against HCA to general policy matters regarding kickback schemes and the False Claims Act. "My primary concern is that there be no policy changes at DOJ or HHS that could weaken or undermine efforts to police and punish kickbacks under the FCA," he asserts.

Grassley’s memo concludes with a number of questions to be investigated:

  • "What meetings has Tom Scully had with DOJ officials to discuss Anti-kickback Act or Stark Act cases?"
  • "With whom and when did he meet?"
  • "Are there memos or background information regarding these discussions?"
  • "Why has DOJ requested an inventory of all Kickback and Stark Act civil cases?"
  • "In US ex rel Thompson v. Columbia HCA, the Department of Justice filed an amicus brief supporting the principle that these violations could and should be subject to False Claims Act prosecutions. Has this position changed at all?"
  • "In the Thompson case, HCFA [now CMS] provided a declaration, which said that a hospital’s certification that it is not offering kickbacks or other financial inducements is serious and is material to the hospital’s continued participation as a Medicare provider. Is this no longer CMS’ position?"
  • "If it still is CMS’ position, does CMS continue to support use of the False Claims Act as a vehicle to prosecute kickback and Stark Act violations?"
  • "What, if any, qualms does CMS have about this kind of approach?"