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Health Care Law Section of the State Bar of Michigan

November 2009

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Chair’s Letter from Joanne Lax

Welcome to the 2009-2010 Bar year. The Health Care Law Section is planning educational programs, substantive law publications, practice aids, a community service opportunity, and a recreational event for the membership. We have something to benefit all health lawyers, and we hope that you will take advantage of our offerings.

Educational Programs:
The Substantive Law Committee is pleased to announce three upcoming teleconference events, which are free to our membership. In addition to the live teleconference, the SLC is working on storing audio recordings of all teleconferences, which we hope to be able to make available to members who are unable to participate in the live telecast. Teleconferences in November and December include:

  • November 12, 2009-Noon teleconference on Negotiating and Drafting IT Contracts, featuring Linda Ross of Honigman Miller Schwartz and Cohn, LLP, and Margaret Marchak of Hall, Render, Killian, Heath and Lyman, P.C.
  • November 19, 2009-Noon teleconference on Recent Amendments to the Federal False Claims Act, featuring Seth Lloyd and Howard O'Leary of Dykema Gossett PLLC.
  • December 17, 2009-Noon teleconference on Health Professional Licensing, featuring Melanie Brim of the Michigan Department of Community Health, Bureau of Health Professions.

Registration for the November programs have been distributed by e-mail to the membership, and registration for the December program will be coming soon.

Please send suggestions for new programs to the Committee Chair, Tom McGraw at

The Publications Committee is pleased to announce the completion of a comprehensive update of our Fraud and Abuse Manual. The updated manual combines information about Michigan and federal fraud and abuse laws. It is located on our website at

Coming soon: a comprehensive update of our Records Retention Manual. Watch for an announcement of the posting of this updated Manual to our website.

Don’t forget our Health Law Index, located on our website at This index provides current information about Michigan regulations and Attorney General Opinions pertinent to the practice of health law.

Please send suggestions for new publications to the Committee co-Chairs, Donna O’Connor at or Monica Navarro at



Practice Aids:
We are working on a member directory to aid our membership in locating colleagues. We are also beginning a substantial project to revamp the look, feel, and content of our website. We want the website to be a valuable practice tool for our membership. Please forward suggestions for improving our website to Richard Bouma at

In addition, we are now including short substantive articles in our monthly e-newsletter. If you would like to submit an article, please respond to our call for authors, which will be e-blasted to our membership shortly and available on our website. Articles should be approximately 250 to 500 words in length, and must be original to the submitter and previously unpublished except for firm newsletters. Selected articles will be distributed via our e-Newsletter and posted on our website.

Community Service:
We are pleased to announce the formation of a Health Care Law Section team to participate in the 2010 Susan B. Koeman Race for the Cure, held on May 22, 2010, at Comerica Park. Please watch for an e-blast announcing a contest to name our team, and for participation and registration information in the upcoming months. Walkers, runners, babies in strollers, and even those of us who would rather sit are welcome to join us in this community-wide fundraiser to cure breast cancer. For more information, contact Robert Iwrey at or Monica Navarro at

Finally, we are investigating a summer recreational event for our membership and families. We want our membership to play together as well as work together. Please send suggestions for events to John Anderson at

Other EventsSection Events

  • November 19 Noon teleconference on Recent Amendments to the Federal False Claims Act, featuring Seth Lloyd and Howard O’Leary of Dykema Gossett PLLC.

  • December 17, 2009 Noon teleconference on Health Professional Licensing, featuring Melanie Brim of the Michigan Department of Community Health, Bureau of Health Professions.

Point of Substantive LawPoint of Substantive Law

Current legal information:
The article that follows represents the views of the author, and not the views of the Health Care Law Section. Many thanks to Howard E. O’Leary of Dykema Gossett PLLC for providing this informational article for publication.

Congress Expands the Civil False Claims Act’s Scope, Makes the Knowing Concealment of Overpayments Subject to Treble Damages and Civil Penalties

On May 20, 2009, the Fraud Enforcement and Recovery Act (FERA) was enacted to address concerns about fraud by mortgage companies and other recipients of TARP funds. FERA also expanded the Civil False Claims Act’s (CFCA) scope to cover false claims submitted to grantees, contractors, and other recipients of federal funds and to subject healthcare providers and others to treble damage liability and civil penalties for the knowing and improper retention of federal healthcare program overpayments.

In addition to the U.S. Department of Justice (DOJ), whistleblowers will now be able to sue a provider on behalf of the Government for a provider’s knowing and improper retention of Medicare, Medicaid, and TRICARE overpayments under the CFCA’s qui tam provisions. The successful qui tam Plaintiff or “relator” will receive between 15-30% of the Government’s recovery plus an award of reasonable attorneys fees and expenses.

The FERA amendments make several other technical revisions to the CFCA which will make recoveries under the statute easier. But, the most significant change for health care providers is the potential for increased qui tam actions based on the knowing and improper failure to repay federally funded overpayments. Under both federal law and Michigan law, the knowing and willful retention of Medicare and Medicaid overpayments is also a crime. The CFCA’s expanded scope provides whistleblowers with a financial incentive to bring such conduct to the DOJ’s attention by filing a qui tam.

Qui tam actions breed criminal and civil healthcare fraud investigations because the CFCA requires the Government to investigate the allegations in each qui tam complaint to decide whether to intervene and take over the action. The qui tam complaint is filed with the court under seal to enable the Government to conduct its investigation before the defendant knows that the action is pending. Thus, any statutory change that increases the number of qui tam actions will also increase the number of fraud investigations.

Qui tam actions, for example, generated the investigation leading to the September 2, 2009, announcement of Pfizer, Inc.’s agreement to pay $2.3 billion to resolve its criminal and civil liability arising from the off label promotion of certain drug products. Under the $2.3 billion settlement, the largest healthcare fraud settlement in history, Pfizer’s Pharmacia and Upjohn subsidiary will plead guilty to a Food, Drug, and Cosmetics Act felony and pay $1.3 billion in fines and forfeitures to resolve its criminal liability.

Pfizer will pay an additional $1 billion to resolve its CFCA liability. As part of the CFCA settlement, six relators will receive roughly $102 million out of the Government's $1 billion recovery plus the award of reasonable attorneys fees. One relator, John Kopchinski, a former Pfizer salesman in Florida, is set to collect more than $51 million.

Responding to fraud investigation and qui tam actions is expensive and disruptive. Given the CFCA’s expanded application and the possible criminal ramifications of a violation, healthcare providers should review and upgrade their compliance program’s ability to detect and repay Medicare and Medicaid overpayments on a timely basis to avoid criminal exposure and treble damage and civil penalty liability.