Texas Alleges That Eli Lilly Patient Assistance Programs Violates AKS

Texas Alleges That Eli Lilly Patient Assistance Programs Violates AKS

The state of Texas and Health Choice Alliance, LLC filed a complaint alleging that pharmaceutical manufacturer Eli Lilly & Company, Inc. violated the Anti-Kickback Statute (AKS) by providing free patient-care and reimbursement support services to induce healthcare providers to recommend or prescribe certain Lilly drugs to their patients.

The plaintiffs allege that Lilly devised a “Free Nurse Program” that offered healthcare providers “the time, service and expertise of nursing staff and other individuals who were trained to offer patient support to help manage these [p]roviders’ patients and engage directly with patients to ensure that they were looked after — without burdening the prescribing [p]roviders.” Per the plaintiffs, Lilly utilized this program to induce healthcare providers to prescribe the company’s drug products.

The plaintiffs additionally allege that, as part of a “Support Services Program” scheme, the company offered free reimbursement support services for healthcare providers through its reimbursement support services to induce recommendations and prescriptions of Lilly drugs over competing or alternative drugs.

In a press release available here, Texas Attorney General Ken Paxton asserted that “Big Pharma compromised medical decision-making by engaging in an illegal kickback scheme,” and “Eli Lilly fraudulently sought to maximize profits at taxpayer expense and put corporate greed over people’s health.”

Notably, Health Choice previously brought False Claims Act (FCA) claims against Lilly through a qui tam action filed in the Eastern District of Texas in 2017. In that matter, Health Choice alleged that Lilly illegally provided patient-education services to providers before a prescription had been written, in violation of the AKS and certain state law. After declining to intervene, the federal government filed a motion to dismiss, which was ultimately granted in September 2019. Following an appeal, in 2021 the Fifth Circuit Court of Appeals affirmed the dismissal.

The case is The State of Texas ex. rel. Health Choice Alliance, LLC vs. Eli Lilly & Co Inc., No. 25-0720 (71st District Court of Harrison County, Texas). The complaint is available here.

DC Circuit Addresses Specificity Required for Pleading FCA Retaliation Claims

Last week, the DC Circuit Court of Appeals found that Tata Consultancy Services Ltd. (TCS) must face a retaliation claim brought by relator Anil Kini, who alleges that the company took adverse employment actions in response to his protected whistleblower activity.

Kini alleged that TCS engaged in fraudulent visa practices with respect to its employees by requiring Kini to “fabricate employee roles and reporting structures” to align with “the information contained in the employees’ L-1A visa petitions.” Per Kini, these actions allegedly allowed TCS to fraudulently obtain less expensive visas for foreign workers who should have instead been sponsored utilizing H-1B visas, which cost far more to secure.

Kini alleged that he first submitted an internal report raising these issues in May 2017. Kini then submitted a follow-up report detailing additional illegal practices in June 2017, after which TCS informed him that the company had hired an independent investigator to review the matter. Kini exchanged communications and information with the independent investigator and, in November 2017, filed a qui tam action under seal, alleging a reverse false claim and a retaliation claim for adverse employment actions under the FCA.

Kini further alleged that, following his submission of a follow-up report to the independent investigator in January 2018, TCS began imposing unrealistic performance goals on him. Kini then submitted a follow-up report to TCS, after which TCS removed him from his project role and stated that if he did not find a new role within two weeks, he would be terminated. Approximately eight months later, TCS terminated Kini.

In August 2022, the government filed a notice of election to decline to intervene, and the District Court then unsealed the complaint. On October 14, 2022, Kini amended his complaint, and TCS moved to dismiss the first amended complaint.

In February 2024, the District Court for the District of Columbia dismissed Kini’s first amended complaint, finding that (1) Kini failed to state a reverse false claim because TCS “was not obligated, within the meaning of the FCA, to pay higher payroll taxes for its employees or pay application fees for applications it never sought” and (2) Kini’s was not entitled to relief on his retaliation claim because he had not engaged in FCA-protected activity.

On appeal, the DC Circuit affirmed dismissal of Kini’s reverse false claim[1] and reversed the District Court’s dismissal of Kini’s retaliation claim.[2] The DC Circuit found that Kini sufficiently pled that (1) he engaged in protected conduct (2) about which TCS was aware and because of which TCS retaliated against him.

First, the majority found that Kini sufficiently alleged that he engaged in protected conduct, citing Kini’s reporting of FCA violations to TCS in 2017 and 2018. The FCA covers two forms of protected activity: (1) steps taken antecedent to an FCA proceeding and (2) lawful acts done in furtherance of other efforts to stop a violation of the FCA. To be engaged in protected activity, “it is sufficient that a plaintiff be investigating matters that could reasonably lead to a viable FCA case.” Here, Kini submitted communications to TCS to “express concerns regarding the existence of government fraud regarding visas and TCS’s violation of the FCA through its failure to address it,” and the DC Circuit found that Kini sufficiently alleged that he engaged in protected conduct.

Judge Katsas partially dissented because he found that Kini did not sufficiently plead that he was engaged in FCA-protected conduct because, while Kini submitted reports to TCS to elevate his concerns regarding potential violations of federal law, “the complaint nowhere suggest[ed] that Kini raised the further possibility that any such abuses might have created FCA liability for avoiding visa application fees or payroll taxes owed to the government.” Judge Katsas found that Kini was required to allege that he specifically raised the issue of an FCA violation to TCS to be engaged in FCA-protected conduct.

Next, the DC Circuit found that Kini satisfactorily pled “that TCS took multiple retaliatory actions against him because the company was aware of his protected actions,” relying on Kini’s allegations regarding his submission of multiple reports to TCS regarding his concerns, as well as Kini’s allegations that TCS reduced his pay, denied his promotion, stripped him of his leadership role, removed him from his client account, and ultimately fired him.

This opinion raises interesting questions of how explicit relators must be when alleging an FCA retaliation claim, including whether a relator must alert their employer to a potential violation of federal law, or specifically to an FCA violation.

The case is United States ex rel. Kini v. Tata Consultancy Servs., Ltd, No. 24-7032 (D.C. Cir.).

Government Obtains $1.4 Million Judgment in Latest P-Stim FCA Case

The US Department of Justice (DOJ) announced that it obtained a $1.4 million judgment against a family medical doctor and his practice for FCA violations.

Per the government, Dr. Richard Akoto used a P-Stim device to treat patients for pain. A P-Stim device uses electrical acupuncture to treat pain symptoms, but the treatment is not reimbursable by Medicare. The government alleges that from approximately January 2019 to May 2019, Dr. Akoto billed Medicare using a code for an implantable neurostimulator device so that he could obtain reimbursement for otherwise non-reimbursable procedures.

This case is the latest in a string of enforcement actions against other entities for similar allegations. According to an October 2021 press release, the government had settled more than 15 FCA cases — worth approximately $15 million — as part of its national P‑Stim initiative. Since that time, the government has settled or obtained judgments in at least 10 additional P-Stim FCA cases, amounting to more than $26 million in recovery.

DOJ’s press release is available here.

Social Worker to Pay Nearly $500,000 to Settle Healthcare Fraud Claims

A Virginia Licensed Clinical Social Worker agreed to pay $449,014.93 to settle civil fraud claims, following his criminal conviction for healthcare fraud in October 2024.

Per the DOJ, Daniel Jacobsen submitted more than $300,000 in fraudulent claims for reimbursement to Virginia Medicare and Medicaid between January 2017 and December 2022 for services that were not rendered. Jacobsen allegedly submitted claims that billed for over 16 hours in a single day, used billing codes for more complex services with higher rates than the services provided, and utilized false psychotherapy records to support that the services had been rendered.

As part of his criminal case, Jacobsen was sentenced to three months in prison, paid $316,338.31 in restitution, and was ordered to pay $335,821.31 in forfeiture and a $100,000 fine. Between the criminal and civil cases, the government will recover $1,201,174.55.

The claims resolved by the settlement are allegations only and there has been no determination of liability.

DOJ’s press release is available here.