Kickback program

Three years later, on March 10, , Tennessee and Louisiana filed a joint Complaint in Intervention , alleging two separate fraud schemes, including the alleged kickback scheme between CSM and the LTCs with which it contracted to provide dental services. The defendants filed numerous motions to dismiss.

On October 20, , the court denied those motions by addressing various procedural issues and questions relating to the alleged kickback scheme. The most important question may have been whether the federal AKS applied to the non-emergency dental services at all. The court began its analysis with the four elements of the AKS:. The court offered two reasons for this conclusion. Employing this rationale, the court found the non-covered dental services were paid for in whole or in part by a federal healthcare program and that Tennessee and Louisiana had sufficiently pled that element of the AKS.

While the court noted that materiality of the false claims is a fact-based inquiry, it also ruled that the states had pled that the alleged violations were material to their payment decision sufficiently to survive at the motion to dismiss stage. The Folse decision allows a state to expressly decline covering a healthcare service under its Medicaid plan yet regulate the provision of that service via enforcement of the federal AKS.

The ruling appears to be unprecedented, and the court cites no other cases to support its conclusion on this issue. The claims in Folse are limited to the dental providers. The LTCs with which they contracted are not named defendants. But there are obvious implications for LTCs seeking uncovered care for their residents. If Folse gains traction, agreements through which LTCs attempt to secure access for their Medicaid residents to non-covered services, like routine dental care, will be subject to federal and state scrutiny under the AKS, the Stark Law, and other statutes.

Providers should also know their medical necessity determinations and billing practices may also be subject to enforcement actions, even for uncovered services. The IME process may only apply to a limited subset of healthcare services, but Folse poses substantial implications for healthcare providers in those industry segments. LTCs, healthcare providers, and their counsel should monitor this case and how other courts may treat this decision.

We continue to monitor developments in the FCA area. Chris Sabis is a healthcare and procurement fraud lawyer specializing in Government Compliance and Investigations, Healthcare , and Litigation. Photo By New Africa from Shutterstock. If you send a lawyer or law firm email through this service, your email will not create an attorney-client relationship and will not necessarily be treated as privileged or confidential.

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