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Data, Databases and Disclosure – How Whistleblowers Can Use Public Data To Prove Health Care Fraud

July 28, 2017

Federal Law increasingly requires that health care companies make data that can reveal fraud available to the public.  Above all, understanding these sources and the public disclosure rules are key to maintaining successful health care fraud cases.

Sunshine Act and Open Payments Data

A little known provision of the Affordable Care Act, called the Sunshine Act, requires pharmaceutical companies and device manufacturers to report the payments they have made directly to physicians.  42 U.S.C. § 1320a-7h. The law also requires CMS to publish these payments.  It also must release annual reports detailing the data, which they do annually a year behind the submission date. As a result, CMS recently released its 2016 data on payments to doctors by pharmaceutical and device manufacturers. Notably, industry paid more than $8.2 billion to physicians last year, slightly up from $8.1 billion in 2015.

As Biopharmadive reported, giants like Roche and Novartis spent hundreds of millions on physicians, with around half going to research projects and the rest to benefits like travel and consulting fees. Some, like GlaxoSmithKline, claimed they have cut back on payments for speaking engagements.  However, the data still shows the company paying $901,917 to doctors for such payments.

CMS warns that inclusion of particular payments in the database does not indicate “any wrongdoing or illegal conduct.” 78 Fed. Reg. 9457, 9460 (Feb. 8. 2013). Manufacturers have many legitimate reasons to pay doctors.  For example for running a research project while being compensated at fair market value. Despite this, some of the largest False Claims Act cases in history have been based on companies paying kickbacks to physicians and fraudulently misrepresenting them as legitimate payments. For example, in 2016 Forest Laboratories and Forest Pharmaceuticals paid $38 million to resolve allegations that they had paid doctors kickbacks as part of speaker programs, and earlier this year Shire PLC Subsidiaries paid $350 to settle allegations that it had paid physicians kickbacks for bogus case studies and speaking engagements.

Medicare Part D Utilization Data

CMS data makes it increasingly easy to scrutinize these payment relationships by looking up the physician recipients of pharmaceutical payments in other databases, such as CMS’s Medicare Part D utilization datasets. Such data show what doctors are prescribing (and billing to the government). Some entities have created tools such as Propublica’s Prescriber Checkup, which links data from these and other sources to provide a more fulsome picture of physician and industry activity. Looking up companies of interest in these databases can provide additional evidence to supplement a whistleblower’s personal knowledge.

The use of Public Data to Support Health Care Fraud Cases

The extent to which such public data can support a False Claims Act health care fraud case alone is more questionable. The FCA has a public disclosure bar that requires courts to dismiss actions based on certain public disclosures unless the whistleblower has information that “is independent of and materially adds to the publicly disclosed allegations or transactions.” 31 U.S.C. § 3730(e)(4). Those public disclosures include federal hearings, congressional, Government Accountability Office or other federal reports, or the news media. Case law has established that allegations released by government agencies through the U.S. Freedom of Information Act fall under the public disclosure bar. Schindler Elevator Corp. v. United States ex rel. Kirk, 563 U.S. 401, 410-11 (2011).