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Recent DOJ Settlement Shows Potential for Whistleblower Cases against Health Care Businesses that Employ “Excluded” Individuals

On February 23, 2022, the United States Attorney’s Office in Connecticut announced that it had entered into a $310,874 False Claims Act settlement with a psychiatry practice and its owner for knowingly employing an “excluded” physician as the practice’s clinical director. Although the settlement appears to be the result of an investigation the government initiated itself, the settlement also highlights the potential for whistleblowers to initiate similar actions under the False Claims Act’s “qui tam” provision when a whistleblower becomes aware of a health care business that is employing an excluded individual or doing business with an excluded entity.

The exclusion statute requires mandatory exclusion “from participation in any Federal health care program [e.g., Medicare, Medicaid, TRICARE, etc.]” for any individual or entity convicted of a health care fraud offense. 42 U.S.C. § 1320a–7(a)(3). According to the government’s press release, the physician, Eric Ressner, had been convicted in 2006 of conspiracy to commit health care fraud. As a result of the conviction, Dr. Ressner was excluded. The Department of Health & Human Services Office of Inspector General (HHS-OIG) maintains a searchable database of excluded individuals and entities. The database includes thousands of entries, and a search for Dr. Ressner’s name confirms his excluded status.

HHS can bring an administrative action to recover civil penalties from a provider that employs an excluded individual, see 42 U.S.C. 1320a–7a(a)(1), but HHS regulations further ban payment by Federal health care programs for services or goods furnished by an excluded individual or entity. See 42 C.F.R. § 1001.1901(b). This ban on payment creates the potential for False Claims Act actions such as the one the government announced involving Dr. Ressner.

If you become aware of a health care business – whether it be a physician practice, hospital, or pharmacy – that is employing an individual who has been excluded from participation in Federal health care programs, you may be in a position to file a False Claims Act qui tam case against that business. Under the law, all claims resulting from items or services provided, directed by, or prescribed by the excluded individual are false. When a whistleblower brings an action against such a business, the False Claims Act entitles the whistleblower to at least 15 percent of any amounts recovered from the business for false claims it submitted or caused others to submit to Federal health care programs.