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Last month we were pleased to welcome former DOJ prosecutor Michael Podberesky to McGuireWoods. Michael comes to McGuireWoods after a five and a half year stint as a fraud prosecutor focused mainly on healthcare enforcement under the guise of the False Claims Act. Below is a short Q&A with Michael discussing his background and recent move as well as current law enforcement priorities.
Tell me a little bit about your practice and experience prior to joining McGuireWoods.
My experience has been predominantly focused on fraud and False Claims Act (“FCA”) matters, primarily in the healthcare and defense procurement sectors. Prior to joining McGuireWoods, I worked at the Department of Justice’s Civil Fraud Section in Washington, D.C., which is the lead office responsible for prosecuting False Claims Act cases, usually in coordination with local U.S. Attorneys’ Offices. There, I lead teams of prosecutors and agents in investigating and litigating FCA cases and worked on approximately 50 False Claims Act matters. I was able to attain settlements and judgments in numerous cases, resulting in recoveries for the federal fisc well into the 9-figures. Healthcare-related cases consisted of about 70% of my caseload while the remaining 30% of cases were related mainly to defense procurement matters. In the healthcare industry, I worked on a broad range of cases involving several sectors including pharmaceuticals, imagery, home health care, hospice, skilled nursing homes, Medicare Part C, and cardiac devices. I also handled several kickback cases. On the procurement side, I tended to handle matters involving aerospace products given my background flying aircraft in the Navy. Prior to the Department of Justice, I spent 7 years at a large international law firm where I was a general litigator. A third of my practice there was white-collar defense and investigation, and the other two thirds was general commercial litigation, with a heavy emphasis on defense and aerospace matters. Prior to law school, I served in the Navy for 8 years flying surveillance aircraft, including over Afghanistan and throughout the Persian Gulf region as part of Operation Enduring Freedom.
What is an interesting or representative case that you worked on at the Department of Justice?
I worked on a series of qui tam (whistleblower) cases filed against a chain of pain management clinics alleged to have violated numerous laws. The main allegation was that they were over ordering urine drug tests for patients who were prescribed opioids to maximize the number of samples sent to a company-owned testing facility where they would run an extensive battery of costly tests on each specimen. Whistleblowers alleged that the company, which had dozens of locations and probably more than a hundred clinicians, prioritized collecting urine samples from patients and then running dozens of unnecessary tests on them. So much so that some employees took to calling the urine samples “liquid gold” because they provided such a large revenue boost. The government intervened and has reached civil settlements with several of the defendants. The CEO was also arrested and convicted for a kickback scheme uncovered as part of our investigation.
These cases demonstrate how the opioid crisis has had significant costs beyond the tragic loss of life to include tremendous financial burdens on federal healthcare programs that paid for the allegedly unnecessary tests. They also demonstrate how Medicare program and payment rules can unintentionally incentivize fraud. Previously, Medicare used to pay per substance tested because of older technology that required an additional test run of the sample to check for each substance. With the advancement of mass spectrometry and introduction of more sophisticated analyzers, laboratory techs can now examine a sample for multiple substances with one test run. The reimbursement rules, however, lagged behind these advancements, creating an over-testing incentive the defendants allegedly tried to take advantage of.
What are you looking forward to in your return to private practice?
I am excited to join one of the premier white collar teams in the world at a firm which also has one of the strongest healthcare practices. I hope to help bridge those strengths and grow an already strong healthcare enforcement practice that takes advantage of the existing litigation, regulatory and industry experience and tremendous client base here.
I am glad that I can put to work the knowledge and experience gained while prosecuting fraud cases on behalf of clients who are often trying to do the right thing while building a profitable business and serving their customers, but who also transact in a heavily regulated space under complex legal regimes (and are not infallible). I am also looking forward to providing proactive advice to help solve problems quickly before they become major concerns.
What are some of the hot bed areas of enforcement for healthcare fraud and abuse cases?
There are a few enforcement areas that DOJ leadership across administrations has consistently identified as top priorities. Opioid abuse and related-fraud continues to be a top DOJ priority. Opioid-related overdose deaths continue to climb and take a tremendous toll on society. DOJ continues to pursue entities involved in the sales, marketing and distribution of opioids, but in 2020, their focus widened to include entities outside of the normal supply chain. For example, in 2020, the Department of Justice settled for $145 million with an electronic medical record company alleged to have violated kickback laws by incorporating prompts in their software meant to encourage physicians to prescribe certain opioids. Recently, a consulting company settled for around $600 million with 49 states regarding claims related to sales advice the company provided to opioid manufacturers.
Another area of focus will be elder care and nursing homes. Nursing home operators are currently under a lot of scrutiny because of the large number of people who have died in their facilities from COVID-19 while nursing homes owners are simultaneously collectively receiving hundreds of millions of dollars from the government for forgivable PPP loans and other COVID-19 related relief programs. This will undoubtedly cause continued scrutiny of the nursing home industry.
A final area I want to address is Medicare Part C cases. Medicare spends around $250 billion every year on Medicare Part C (managed care) causing a shift away from traditional fee-for-service Medicare and a corresponding shift in enforcement activity. The Part C managed plans are attractive for seniors and account for about one-third of enrolled Medicare beneficiaries, a percentage that continues to grow. Medicare Part C is relatively new and the fraud looks very different than it does on the traditional fee-for-service side. Part C fraud usually involves more exaggerated diagnosing of patients’ condition in order to get the government to pay higher risk adjusted capitated payments per patient. Enforcement in the Medicare Part C sector will continue to grow as more beneficiaries choose to enroll in managed care plans and insurers and providers become more sophisticated in operating under its risk adjusted capitated-payment regime.
Just a few weeks ago, the Acting Assistant Attorney General provided the first clues about enforcement priorities for the Biden administration in a brief speech to the Federal Bar Association. In his remarks, Acting Assistant Attorney General Boynton reiterated that opioids and elder-care would remain priority enforcement areas and also discussed focusing on pandemic-related fraud and fraud related to telehealth, electronic medical records and cyber security as additional Civil Division enforcement priorities.
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