Volume 17 | May 2021
NEWSLETTER
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Any time a physician and a hospital enter a long-term relationship, whether through a direct employment arrangement or through a services agreement with a physician group, the discussion around physician compensation can quickly grow complicated. Most healthcare providers are aware of the heavily regulated environment around physician pay, including the need for compliance with the Stark Law and the federal Anti-Kickback Statute. However, in addition to these well-known issues, providers may also see a direct influence from quality-of-care incentive programs on their compensation models. 

The past decade has seen a large number of healthcare programs focused on improving clinical quality through various incentive programs aimed at rewarding hospitals and providers for higher quality of care or penalizing them for failure to meet certain quality requirements. And as hospitals face greater pressure to improve certain measurable quality objectives, they are exploring ways to increase pressure on contracted physicians and physician groups to assist with meeting these objectives. One method hospitals may use is to leverage physician compensation models to align the performance of physician services with value-based care payor initiatives. In other words, compensation owed to the physician or physician group may have a portion carved out for “incentive-based compensation,” to pay certain amounts in exchange for the physician or physician group’s efforts towards meeting certain process measures, quality measures, patient satisfaction, or clinical outcomes (“quality metrics”).  

In many cases, the inclusion of an incentive-based portion in physician compensation is not a negotiable item. However, this does not mean that this portion of compensation is not open to discussion. We have outlined below five points to consider when negotiating incentive-based compensation in physician agreements.

Be sure you understand the terms and goals. 

Even when the terms of an agreement are 100% non-negotiable, it is imperative that both parties understand exactly how the compensation will work, and even more so, the goals to be reached by structuring compensation as laid out in the agreement. One of the best ways to ensure that both parties are getting the most out of the agreement is to be sure they are each performing in a way that can be measured and rewarded by the terms of the agreement. 

Consider the specified quality metrics.

Does the agreement specify exactly which quality metrics the parties will aim to meet? If not, be sure to discuss which metrics may be most applicable to the physician or physician group and build those into the agreement. The physician or physician group should also consider the quality metric selected and whether the goal can practically be met during the term of the agreement, and also consider requesting input on the selection of future quality metrics if the agreement is renewed.

Consider how best to measure performance.

For the quality metrics covered by the agreement, does the arrangement specify how the parties will determine if the physician or physician group achieved the goal? Is the quality measure something that is readily measurable, and what is the best way to show the physician group’s efforts towards the goal? Once both parties understand and agree on how performance is to be measured, the physician or physician group may then properly build into their practice certain steps to help document efforts towards the goal. 

Consider timing of payments.

The frequency of payments can have a large impact on performance. For example, depending on the goal to be met, if a physician or physician group receives payment on a monthly or quarterly basis, this can help the physician or physician group modify activities, if needed, to better meet the goal. Alternatively, for some quality metrics, the impact of a physician group’s activities may be better measured over a longer period and thus an annual payment may make better sense.  

Keeping track of performance.

Does the agreement include a mechanism for the physician or physician group to keep track of their performance during the term? If so, how easy is it for the physician to get the requested feedback, and how quickly does the hospital have to respond in providing the information? One of the best ways for both parties to ensure that they are jointly working towards meeting the quality metric goals is to be sure the physicians are aware of how their current activities are building towards the goals (or not), so they can evaluate any changes needed as the term progresses.
Employing Excluded Individual Costs Home Health Company and its Owner $28K

The U.S. Department of Health and Human Services, Office of the Inspector General (OIG) may exclude individuals and entities from federally funded healthcare programs under 42 U.S.C. §§ 1320a-7 and 1320c-5. By law, the OIG must exclude individuals and entities for convictions of select criminal offenses. The OIG has updated the criteria for exclusion, which CG attorneys previously discussed. Generally, no federal healthcare program payment will be made for items or services furnished, ordered, or prescribed by or at the direction of an excluded individual or entity. Importantly, providers or companies that employ or contract with excluded individuals to provide services payable by federal healthcare programs may be subject to civil monetary penalties. The OIG issued an Updated Special Advisory Bulletin on the effect of exclusion, which contains additional guidance.

On April 12, 2021, the U.S. Department of Justice issued a press release regarding a settlement agreement entered into by CareCo Medical, a home health organization, and CareCo’s owner (collectively, “CareCo”). The settlement agreement was reached after CareCo employed an individual excluded from federally funded healthcare programs. Between November 2018 and March 2019, CareCo employed Todd Roberts in a management position. In 2012, Roberts pled guilty to obstructing a federal audit. As part of the plea, Roberts agreed to pay approximately $328k and entered into a six-year Integrity Agreement. Roberts was excluded from all federal healthcare programs in 2015 after he breached the Integrity Agreement. Despite employing Roberts for less than six months, CareCo Medical and its owner agreed to collectively pay $28,246.00 to resolve their potential liability for hiring Roberts while he was excluded. 

The CareCo settlement is a reminder for employers and individuals that employ or contract with providers to routinely check the names of current and would-be employees/contractors against the OIG exclusion database. Moreover, Roberts’ exclusion demonstrates the long-term implications of enforcement actions against individuals. Companies and individuals subject to government investigations or that are contemplating any agreement with the government should carefully consider the long-term impact of the agreement and should seek legal counsel with experience in government investigations.  


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New Publication

Chilivis Grubman associate Andrew D. Mason latest article, entitled "How the Insider Trading Prohibition Act Would Change Enforcement," was published in March in Daily Report. You can read the article here.
This month, Chilivis Grubman partner Scott Grubman spoke at two live conferences -- the Georgia EMS Association's Leadership Conference and the Tennessee Pain Society's Annual Meeting in Nashville. Next month, Scott will speak at the annual meeting of the American Society of Interventional Pain Physicians (ASIPP) in New Orleans.
DOJ Charges 5 Healthcare Suppliers and Marketing Company Owners in $65 Million Health Care Fraud Scheme


In 2019, the U.S. Department of Justice (“DOJ”) announced “Operation Brace Yourself,” which resulted in charges against 24 criminal defendants and adverse administrative actions against 130 DME companies. Operation Brace Yourself was a nationwide scheme related to the dispensing of orthotic braces using telehealth companies and providers that resulted in an estimated $1.5 billion in cost avoidance, according to the DOJ.  

Following Operation Brace Yourself, the DOJ continued enforcement efforts against fraudulent schemes related to telehealth, orthotic devices, and lab testing, which CG attorneys have discussed in client alerts and presentations. As the government has explained, these fraudulent schemes often involve medical providers, DME suppliers, labs, pharmacies, telemarketing companies, and telehealth companies. Hallmarks of government enforcement actions related to these types of schemes include cross-agency collaborations, nationwide enforcement, and pursuing all actors, companies, and individuals involved in the schemes (i.e., the entire “supply chain”). These hallmarks were evident in a recent enforcement action.

On April 22, 2021, the DOJ announced charging Christopher Cirri, Thomas Farese, Domenic Gatto, Nicholas DeFonte, and Pat Truglia for their roles in a $65 million nationwide scheme to defraud federal healthcare programs. The individuals were owners of orthotic brace supply companies and marketing companies. All individuals were charged with conspiracy to commit health care fraud and three counts of health care fraud in connection with paying and receiving health care kickbacks and bribes.
  
According to the press release, between October 2017 and April 2019, Truglia, Cirri, and DeFonte allegedly operated or controlled telemarketing call centers that solicited and enticed beneficiaries to accept orthotic braces regardless of need. Truglia, Cirri, and DeFonte also contracted with telemedicine companies and invoiced the companies for “marketing” and “business process outsourcing.” The government alleges that the contracts were a sham used to conceal kickbacks and bribes paid to the telemedicine companies in exchange for orders for braces. The government also outlined how some individuals allegedly conspired to purchase brace orders through other suppliers, while other individuals conspired to sell brace orders to orthotic brace suppliers. Despite how the schemes were executed, they involved kickbacks, bribes, sham invoicing, submission of false information to the government, and using shell companies, according to the government. 

The charges (health care fraud and conspiracy to commit health care fraud) imposed on the individuals are punishable by up to 10 years in prison. Financially, the charges may include the greater of a $250,000 fine or twice the gross profit or loss caused by the offense, according to the press release.   

The DOJ’s announcement is another example of the government’s use of cross-agency collaborations, as the case was investigated by HHS-OIG, FBI, VA-OIG, and the Defense Criminal Investigative Service (DCIS). The press release also demonstrates the government’s pursuit of individuals as part of the healthcare supply chain who may not be physicians. Healthcare industry participants (licensed medical providers, DME suppliers, marketing and business support, and other non-medical providers) must remain vigilant and consistent in compliance efforts.
DOJ Reaches Settlement with Pharma Company Accused of Covering Patient Copays


In a March 4 press release, the Department of Justice announced it had reached a settlement with Incyte Corporation resolving allegations that Incyte had violated the False Claims Act and Anti-Kickback Statute. DOJ alleged that, over a 3-year period, Incyte had used a foundation to unlawfully cover copays for patients prescribed its drug Jakafi. DOJ alleged that Incyte was the sole donor to a fund that was opened to assist only myleofibrosis patients. Incyte is alleged to have pressured the foundation to approve payments to cover copays for patients that were prescribed Jakafi to treat non-approved health conditions. Incyte is also alleged to have used a contractor to assist the ineligible patients in completing applications to the fund. 

Under the Anti-Kickback Statute, companies are prohibited from providing anything of value to induce the use of drugs by beneficiaries of government-funded health plans. Copays were required by Congress in order to prevent drug and medical device companies from overpricing drugs and devices paid for by government-funded health plans. By covering copays, companies are potentially able to circumvent that check on the prices charged to the government.

This settlement is notable for two reasons. First, there was significant involvement from the Defense Criminal Investigative Service (CDIS). This lesser-known organization investigates allegations of fraud against the Department of Defense’s TRICARE program. There is no shortage of government agencies capable of investigating and bringing enforcement actions based on false claims submitted to the government. CDIS is part of a list that includes the DOJ, individual U.S. Attorney’s Offices, Offices of Inspectors General for Health and Human Services, the Department of Defense, and the United State Postal Service, and state attorneys general. And if all of those eyes do not adequately deter that fraud, this case includes another enforcement tool at the government’s disposal – a former executive at Incyte is slated to receive $3.59 million of the $12.6 million recovery as a reward for bringing the original qui tam complaint against Incyte. Health care fraud has been, and will continue to be, a focus of law enforcement agencies. This is one more example of that continued focus.

HHS-OIG Updates Workplan to Include Audits of CARES Act Provider Relief Fund Payments

Chilivis Grubman attorneys have cautioned providers on government enforcement efforts related to the CARES Act Provider Relief Fund and the likely audits that would follow the disbursement of the funds. And Providers Relief Fund compliance is more important now than ever, as the government has announced PRF-related audits.

The U.S. Department of Health and Human Services (“HHS”) Office of Inspector General (“OIG”) publishes projects (current and planned) for the fiscal year through its “Work Plan.” Project types vary and may include studies and audits. The OIG’s Work Plan is adjusted based on various factors, such as priorities, needs, resources, legislation, and to avoid duplicative efforts. The Work Plan is updated monthly, which is far more frequently than the previous annual and biannual updates that occurred before 2017. 

Although the OIG provides only a synopsis of planned and current Work Plan projects, the OIG does provide reports for completed projects. Continuous monitoring of the Work Plan platform allows interested parties to better understand government studies, audits, and areas that may face heightened government scrutiny.  

In May 2021, The OIG updated its Work Plan to include seven new projects, which includes PRF-related audits.

  1. NIH Oversight of Foreign Grant Recipients’ Compliance with Audit Requirements;
  2. Medicare-Related Capital Costs Reported by New Hospitals;
  3. Audits of Medicare Payments for Spinal Pain Management Services;
  4. Meeting the Challenges Presented by COVID-19: Nursing Homes;
  5. Impact of Expanding the Hospital Transfer Payment Policy for Early Discharges to Post-acute Care;
  6. Impact of the COVID-19 Pandemic on State Child Support Enforcement Programs; and

  • Audit of CARES Act Provider Relief Funds—Payments to Health Care Providers That Applied for General Distribution Under Phases 1, 2, and 3.

Audits of CARES Act Provider Relief Funds

Regarding the Audits of CARES Act Provider Relief Funds project, the OIG noted it will perform audits related to PRF distribution, which were disbursed in three phases. Medicare providers received funds in the first phase. Medicaid, dental, Children’s Health Insurance Program, assisted living facilities, and certain Medicare providers received funds in the second phase. And certain behavioral health providers received funds in the third phase. According to the OIG, the audits are “to determine whether payments were: (1) correctly calculated for providers that applied for these payments, (2) supported by appropriate and reasonable documentation, and (3) made to eligible providers.” The Work Plan does not provide additional information related to audits, except that the completion report is expected in 2022.
 
Providers should review reporting instructions and note the reporting deadlines. Providers should also ensure proper documentation is maintained and readily accessible. Importantly, Providers should review the terms and conditions that were accepted as a condition of receiving the funds from the PRF. To assist recipients with compliance, HHS maintains a webpage dedicated to frequently asked questions (“FAQs”) on various compliance-related issues, which was recently updated. While the HHS FAQ webpage provides valuable insight on HHS’ interpretation of PRF requirements, HHS also modifies its responses to FAQs, so frequent monitoring is key. 

Second EHR Vendor Settles False Claims Act Allegations for $3.8 Million

In February 2021, CG attorneys wrote about an electronic health record (“EHR”) vendor, Athenahealth, Inc., agreeing to pay $18.25 million to resolve False Claims Act (“FCA”) allegations related to its marketing programs and alleged kickbacks. CG attorneys cautioned readers about the government’s continued focus on EHR companies and marketing programs. Approximately three months later, the U.S. Department of Justice (“DOJ”) announced a second multi-million-dollar settlement with an EHR company regarding allegations of FCA violations involving alleged kickbacks.  
 
On April 30, 2021, the DOJ announced that CareCloud Health, Inc. agreed to pay $3,806,96.70 to settle allegations that it paid illegal kickbacks in exchange for sales of its electronic health record products in violation of the federal Anti-Kickback Statute and the FCA. 

According to the DOJ’s press release, CareCloud operated a referral program called the “Champions Program” between January 1, 2012, and March 31, 2017. Through the Champions Program, CareCloud offered and paid clients to recommend CareCloud’s products. Participants in the Champions Program were prohibited from providing negative information about CareCloud’s products to prospective CareCloud clients. CareCloud also paid Champions Program participants cash equivalent credits, cash bonuses, and percentage success payments for recommendations that participants made. Neither CareCloud nor Champions Program participants informed prospective CareCloud clients of the kickback arrangement between CareCloud and Champions Program participants. 

According to the press release, the underlying alleged kickbacks rendered false or tainted the claims submitted to the federal government for payment under Medicare and Medicaid Electronic Health Records Incentive Programs.

CareCloud’s settlement resolves a federal lawsuit filed in Florida under the qui tam provisions of the FCA. The FCA’s qui tam provisions provide financial incentives and a procedural structure to whistleblowers – known as relators – so that individuals may bring FCA cases on behalf of the government.  If successful, whistleblowers are entitled to 15% to 30% of the money the government recovers based on various factors, such as government intervention. In this case, the whistleblower stands to earn $803,269.97.

CMS Releases Proposed Rule Making Changes to the Promoting Interoperability Program

On April 27, 2021, the Centers for Medicare & Medicaid Services issued a new proposed rule that, along with increasing hospital payments, proposes changes to the Medicare Promoting Interoperability Program (formerly known as the Medicare and Medicaid EHR Incentive Program or “meaningful use”).  

CMS highlighted the following changes to the program:

  • The minimum score required for the objectives and measures under the program to be considered a meaningful EHR user would be increased from 50 points to 60 points (out of 100). 

  • The current minimum of a continuous 90-day EHR reporting period for new and returning eligible hospitals and CAHs would continue through 2023 but would be extended to a minimum of a continuous 180-day period starting in 2024.

  • The “Electronic Prescribing Objective’s Query of Prescription Drug Monitoring Program” measure would still be optional, but its bonus points would increase from 5 points to 10 points.

  • The “Provide Patients Electronic Access to their Health Information” measure would be updated to require hospitals and CAHS to maintain electronic health information from encounters on or after January 1, 2016.

  • A new “Health Information Exchange Bi-Directional Exchange” measure would be added as an alternative to the two existing measures.

  • Reporting on four of the Public Health and Clinical Data Exchange Objective measures would be required (Syndromic Surveillance Reporting; Immunization Registry Reporting; Electronic Case Reporting; and Electronic Reportable Laboratory Result Reporting), but the Public Health Registry Reporting and Clinical Data Registry Reporting measures would remain optional.

  • Beginning on January 1, 2022, eligible hospitals and CAHs would be required to attest to having completed an annual assessment via a SAFER Guides measure, as part of the Protect Patient Health Information objective.

  • Under the prevention of information blocking requirement, attestation statements 2 and 3 would be removed. 

  • Two new electronic clinical quality measures (eCQMs) would be added with the reporting period in 2023 and four eCQMs would be removed in 2024.
Georgia Court of Appeals Rejects Apex Doctrine, Refusing to Shield Executives From Depositions


In a recent opinion, the Georgia Court of Appeals upheld a trial court’s refusal to shield General Motor’s (“GM”) chief executive from a deposition in a wrongful death case. 

In November 2014 a woman died when her Chevy Trailblazer veered off the roadway and landed in a ditch. Her husband filed suit against GM alleging it was liable for his wife’s death because of a defect in the vehicle and GM’s failure to warn. Specifically, he alleged that the vehicle’s steering wheel angle sensor (“SWAS”) failed, which prevented the vehicle’s Stabilitrack system from preventing the vehicle from losing control and leaving the road.

During discovery, the plaintiff sought to depose GM’s CEO, Mary Barra, arguing that her involvement in GM’s efforts to improve safety practices meant she had knowledge relevant to the lawsuit. GM moved for a protective order, arguing that the request to depose GM’s highest-ranking officer “is the very type of harassment, oppression, embarrassment, and undue burden and expense” that Georgia’s discovery rules were designed to prevent. In support of the motion for protective order, Barra provided an affidavit stating she lacked knowledge of the specific SWAS defect at issue in the complaint and her involvement in other safety investigations were unrelated to SWAS. GM also argued that the apex doctrine precluded the taking of Barra’s deposition. 

Under the apex doctrine, a high ranking corporate official can be shielded from having to be deposed unless there are extraordinary circumstances that justify deposing the official such as “(1) the deponent has unique, first-hand knowledge of the facts at issues in the case; and (2) whether the party seeking the deposition has exhausted other less intrusive discovery methods.”  

The trial court refused to enter a protective order or apply the apex doctrine and GM appealed. The Court of Appeals found that the trial court did not abuse its discretion in denying the protective order because there was some evidence that Barra had information that was reasonably calculated to lead to the discovery of admissible evidence. 

Perhaps more importantly, however, the Court of Appeals refused to adopt the apex doctrine. Recognizing that other states and event federal district courts in the Eleventh Circuit have adopted the doctrine, the court found the apex doctrine to be “inconsistent with Georgia’s discovery provisions that require a liberal construction in favor of supplying a party with facts.”

Although the Court refused to adopt the doctrine, it did note that the exception to the discovery rules was best left to the legislature. In a concurring opinion, Judge Dillard “sympathize[d] with the concerns expressed by General Motors about the potential for litigants to use Georgia’s forgiving discovery standards to unduly burden high ranking executives and negatively impact business in [the] state,” but concluded that the apex doctrine is one that will have to be adopted by the General Assembly or the Supreme Court. 
QUOTE OF THE MONTH

"As we express our gratitude, we must never forget that the highest appreciation is not to utter words but to live by them."

John F. Kennedy
SEC Awards Whistleblower $18 Million

The Securities and Exchange Commission (SEC) recently announced that it had awarded $22 million to two whistleblowers, with one of those individuals receiving an $18 million award. The two individuals provided the SEC with information concerning the same investigation; however, the individual receiving the larger award provided the information that led the SEC to initiate the investigation in the first place. The press release does not disclose the investigation that led to the award, but given the size of the award, the SEC likely obtained over $100 million from the entity that was the target of the investigation. Similarly, the SEC’s order does not disclose the identities of the two individual whistleblowers, shielding them from retaliation and public scrutiny.  

This demonstrates the SEC’s commitment to protecting whistleblowers, and the mechanisms by which it does so. The SEC relies heavily on whistleblowers to reveal potential fraud to the SEC. Fraud, by its nature, is concealed from the prying eyes of curious investors and the SEC. According to government agencies like the SEC, whistleblowers are crucial in pealing back the shades and revealing fraud. As both an incentive and a reward, the SEC provides whistleblowers with a portion of any recovery against individuals and entities that the whistleblower has reported on. Since its inception in 2012, the SEC’s whistleblower program has awarded whistleblowers nearly $1 billion. Awards can range from 10 to 30 percent of the money collected when the SEC’s recovery exceeds $1 million. Further, there are protections in place to prevent retaliation and ensure that previous employees are not hampered in bringing fraud to the attention of the government.  
House Passes Dedicated Insider Trading Bill

On May 18, the U.S. House of Representatives passed H.R.2655, the Insider Trading Prohibition Act. If passed by the Senate, the legislation would be the first dedicated legislation to combat insider trading. For decades, the Department of Justice and Securities and Exchange Commission have enforced insider trading prohibitions under § 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5. However, this was never a perfect marriage as § 10(b) is, at its core, an anti-fraud statute, and not all insider trading cases present the elements of fraud necessary to bring enforcement actions under § 10(b) and Rule 10b-5. As the government stretched the language of the statute and rule to curtail problematic conduct, the conduct being investigated drifted further and further from the purpose and language of § 10(b). Enforcement attorneys and academics have long argued that Congress needed to act to codify the prohibition on insider trading, and it looks like they may finally get their wish.

The bill passed by the House does not merely codify existing case law on insider trading, although some elected officials say that is all the statute does. The language of the bill outlaws trading that is clearly problematic but is just outside the language of § 10(b). For example, trading based on information that has been obtained from a hack of a company has sometimes been outside the reach of DOJ and SEC. That is because § 10(b) prohibits manipulation or deception, and Rule 10b-5 prohibits fraud, deceit, or false or misleading statements or omissions. Hacking occasionally employs deception, but sometimes simply exploits vulnerabilities in software or overwhelms the victim’s system. Those did not fall squarely within the language of the statute or the rule. The government also had difficulty proving the connection between the hacking and the trading. Under the bill passed by the house, trading is prohibited if done while aware of material non-public information and with the knowledge that the information was obtained in “violation of any Federal law protecting computer data or the intellectual property or privacy of computer users.” This language opens up a whole new frontier for insider trading enforcement.

The bill broadens the enforcement landscape for insider trading and brings new types of information under its purview. The bill also simplifies tipper-tippee liability by effectively eliminating the personal benefit requirement. It is enough that the trader knows that the information was wrongfully obtained, used, or communicated. Tipper liability does not require a breach of a fiduciary duty or a relationship of trust and confidence under the bill. It is enough that the information was provided in violation of a contract, confidentiality agreement, or code of conduct or ethics, and almost any benefit to the tipper will satisfy the requirements of the bill. If passed by the Senate, the bill would greatly expand the universe of potential targets of insider trading investigations and would likely precipitate an immediate uptick in DOJ and SEC enforcement.
A New Georgia Option for Business Disputes: State-Wide Business Court

When business ventures are first starting out, the parties involved are usually on good terms in an amicable relationship. But what happens when the relationship breaks down? Hopefully the parties had a detailed contract that outlined the appropriate actions for each party and next steps to either terminate or modify the relationship so they can move on to their next business opportunity.

But sometimes even a detailed contract may not be enough to help the parties resolve their differences. In this case, it’s time to review the contract’s dispute resolution process. Many agreements may include language selecting a specific venue for traditional litigation or (as we are seeing more often these days) electing to arbitrate disputes. As of last fall, Georgia businesses have a new option to consider for dispute resolution. 

Georgia’s State-Wide Business Court (the “GA Business Court”) officially began accepting filings on August 1, 2020. Here are a few points to consider, if you are dealing with a potential business dispute in Georgia:

  • What kind of cases can be handled by the GA Business Court?

Briefly and broadly, the Georgia Business Court has jurisdiction over the following types of cases, if the parties are looking for more than $500,000 in damages or equitable relief:

  • Cases where the parties have agreed in writing to arbitration;
  • Cases under Georgia’s Trade Secrets Act;
  • Cases involving securities, including those covered by the Georgia Uniform Securities Act of 2008;
  • Cases covered under the Uniform Commercial Code (everything under Title 11 of Georgia’s code);
  • Claims under Georgia’s corporate code, including issues involving corporations, partnerships, limited partnerships, and limited liability companies;
  • Broadly, any claims that deal with internal affairs of businesses, including rights or obligations between business participants, like liability or indemnification concerns (“business participants” includes but is not limited to officers, directors, managers trustees or partners);
  • Cases under federal law where Georgia courts have concurrent jurisdiction;
  • Tort claims between two or more businesses or individuals involving their investment or business activities, like contracts, transactions, or business relationships;
  • Claims for breach of contract, fraud, or misrepresentation between businesses or coming from a business transaction or relationship;
  • Cases involving e-commerce agreements (licensing agreements, software and biotech agreements, or licensing of intellectual property rights right patent rights);
  • Cases involving commercial real property (but only if the parties are seeking more than $1 Million in damages or equitable relief)

The Georgia Business Court specifically may not handle cases for personal injury or death, mental or emotional injury, physical contact, threat of physical violence, domestic disputes, residential landlord and tenant disputes, foreclosures, individual consumer claims involving retail goods or services, or collections from family owned farms or individual farmers.

Further details on which cases can be handled by the Georgia Business Court can be found at OCGA § 15-5A-3.

  • Do Businesses Have to Use the GA Business Court?

No. Unless both parties to a dispute are both businesses that agreed in a contract to handle disputes in the GA Business Court, then both parties in the dispute must agree to use the GA Business Court. If one party initially files with the GA Business Court and a defendant properly objects, the claim will be moved to the superior court or state court. 

  • What benefits could the GA Business Court offer?

The GA Business Court may offer businesses a faster option for resolving disputes, with a court that is highly knowledgeable and has expertise in the area of Georgia law as applied to businesses. So, even though parties may be feeling a little “sticker shock” with the initial $3,000 filing fee for the GA Business Court, the parties may ultimately save legal fees and businesses expenses simply as a result of getting the dispute handled faster.

  • Should businesses revise contract “venue” language to push the parties to the GA Business Court? 

Perhaps, but Georgia businesses may want to give the GA Business Court some time before making the GA Business Court the default option in their business agreements. The court is still very new (its first opinion was released only last week). And even if an agreement does not include the GA Business Court as the elected venue in a disputed agreement, the businesses may mutually agree to move to the GA Business Court at a later time. 
Task Force Dedicated to COVID-19 Fraud Created

On May 17, 2021, Attorney General Merrick B. Garland released a memo announcing the establishment of a COVID-19 Fraud Enforcement Task Force (“COVID-19 Task Force”). Continuing the government’s collaboration with interagency partners, the COVID-19 Task Force invited at least ten agencies, including the Department of Labor, Department of the Treasury, Small Business Administration, and the U.S. Secret Service. Within the U.S. Department of Justice (“DOJ”), the COVID-19 Task Force will also include heads of litigating components United States Attorneys, the Federal Bureau of Investigation, and other related departments and agencies. Interagency coordination is not new nor uncommon.  

The COVID-19 Task Force will join the Pandemic Response Accountability Committee (“PRAC”) in performing oversight functions related to COVID-19 relief funds. Specifically, the COVID-19 Task Force will help the DOJ:   

  1. to identify cross-governmental resources, investigative techniques, and information for uncovering fraud schemes and the actors who perpetrate them; 
  2. to harness what we have learned about COVID-19 related and other types of fraud from past efforts; and
  3. to deter, detect, and disrupt future fraud wherever it occurs
 
According to the press release announcing the COVID-19 Task Force, the COVID-19 Task Force must share information and “bolster efforts to investigate and prosecute the most culpable domestic and international criminals, prevent the exploitation of government assistance for personal and financial gain, and recover stolen funds.” The COVID-19 Task Force is also expected to increase public awareness of COVID-19 related fraud, including how whistleblowers can report fraud.  

As the government bolsters its enforcement efforts with tools and resources, recipients of COVID-19 relief funds should ensure continued compliance with the COVID-19 relief program from which the recipient received funds. Recipients should also ensure necessary records and documentation are maintained and readily accessible. The government’s message and warnings are clear. According to Attorney General Garland, “[t]he Department of Justice will use every available federal tool – including criminal, civil, and administrative actions – to combat and prevent COVID-19 related fraud.”
SavaSeniorCare Settles Alleged False Claims Act Violations for $11.2 Million

On May 21, 2021, the Department of Justice issued a press release announcing that Georgia-based SavaSeniorCare, LLC and related entities (Sava) agreed to pay at least $11.2 million to resolve allegations of False Claims Act violations. Between 2011 and 2015, multiple qui tam actions were filed against Sava. In 2015, the government consolidated the lawsuits against Sava.

The lawsuits alleged that Sava submitted false claims for rehabilitation therapy services between October 2008 and September 2012. The government noted that Sava’s corporate-wide policies and practices pressured Sava skilled nursing facilities and staff to meet unreachable goals. The pressure exerted by Sava resulted in “medically unreasonable, unnecessary or unskilled services” provided to Medicare patients, according to the government. The government also alleges that Sava also set high targets for services with high Medicare reimbursement rates without considering the clinical needs of the patients. Sava is also alleged to have delayed the discharge of patients to increase Medicare payments, despite the patients being fit for discharge.  

Sava’s settlement agreement will also resolve allegations that for approximately ten years, between January 2008 and December 31, 2018, Sava submitted claims for “grossly and materially substandard and/or worthless skilled nursing services.” The press release noted that some of Sava’s facilities did not meet federal standards of care. For example, the government alleged that some of Sava’s facilities did not follow pressure ulcer protocols, fall protocols, and proper medication disbursements.  

Although Sava agreed to pay $11.2 million to resolve the false claim allegations, Sava also agreed that the government has a total “undisputed, noncontingent, and liquidated allowed claim against Sava in the amount of Seventy-Four Million Dollars, less any settlement payments …,” according to the settlement agreement. The settlement terms require Sava to pay $11.2 million, plus additional amounts if certain financial contingencies occur. Additionally, Sava entered into a five-year Corporate Integrity Agreement that requires annual reviews of patient stays and paid claims by an independent review agency. The quality of Sava’s resident care will also undergo independent monitoring. 

The investigation against Sava was the result of government interagency collaboration, which includes U.S. Attorneys’ Offices for various districts, the U.S. Department of Health and Human Services, the National Association of Medicaid Fraud Control Units, and the Justice Department’s Elder Justice Initiative. 
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