Government Enforcement Actions

February 1, 2024

One of the nation’s largest healthcare systems, Providence, has agreed to forgive more than $137 million in medical debt and refund more than $20 million to patients following a lawsuit by Washington State.  According to the Attorney General’s Office, between 2018 and 2023, Providence trained staff to demand payments from low income patients who were eligible for financial assistance, then sent some of those same patients to debt collectors even if they were Medicaid beneficiaries.  Almost 99,500 patients will receive relief as a result of this settlement, with the average refund amounting to about $478.  WA AG

February 1, 2024

Marketing firm Publicis Health, which was agency of record for all of Purdue Pharma’s branded opioid drugs as well as for other opioid manufacturers, has agreed to a $350 million national settlement for helping to fuel the prescription opioid crisis.  A government investigation found that the multinational company farmed data from recordings of conversations between patients and providers and used that data to develop Purdue’s sales tactics.  As part of this settlement, Publicis has also agreed to disclose thousands of internal documents detailing its work for opioid companies, such as Purdue, on a public website.  CA AG; NC AG; PA AG

February 1, 2024

Hikma Pharmaceauticals has reached a settlement in principle with multiple states for $150 million following allegations that the opioid manufacturer failed to monitor and report suspicious orders.  From the settlement proceeds, $115 million will be paid in cash, while the remaining $35 million will be allocated toward opioid addiction treatment medications.  CA AG; NC AG; VA AG

January 31, 2024

In the fourth-largest Controlled Substances Act (CSA) settlement in history, e-commerce company eBay has agreed to pay $59 million for its failure to properly regulate the sales of pill presses and encapsulating machines on its website.  Such devices can be used to produce pills that mimic pills produced by legitimate pharmaceutical companies.  To combat this, the CSA requires that purchasers of such devices have their identities verified, recorded, and reported to the DEA; however, eBay failed to do so.  DOJ

January 24, 2024

Johnson & Johnson has agreed to pay $149.5 million to Washington State for its role in fueling the opioid epidemic after the Attorney General Bob Ferguson rejected a 2021 settlement and chose to continue litigation.  The company was a top supplier of ingredients used to make opioid drugs, and marketed the drugs for chronic pain conditions that studies showed were not effectively treated by opioids.  This is the fifth national settlement that Washington State has rejected, and the third so far that has netted the state more than it would have received under the national settlement.  WA AG

January 16, 2024

Silver Lake Hospital, a long-term care hospital in New Jersey, will pay $18.6 million, and its principal investors Dr. Richard Lipsky and Columbus Management South LLC will pay another $12 million, to resolve allegations of violating the False Claims Act and Federal Debt Collection Procedures Act (FDCPA).  The hospital allegedly claimed excessive cost outlier payments from Medicare, well in excess of its needs or ability to repay, and transferred millions of dollars to investors without receiving equivalent value in return.  DOJ

January 16, 2024

J.P. Morgan Securities LLC (JPMS) has agreed to pay $18 million to settle charges of violating the whistleblower protection rule of the Securities Exchange Act of 1934.  According to the SEC, JPMS asked hundreds of clients who received credits or settlements over $1,000 to sign confidentiality agreements that allowed them to answer SEC inquiries, but not voluntarily contact the SEC.  SEC

January 10, 2024

Clinical laboratory RDx Bioscience Inc. and its owner and CEO Eric Leykin have agreed to pay over $10 million to the federal government and about $3 million to the State of New Jersey for violating the Anti-Kickback Statute and federal and state False Claims Acts.  From 2018 to 2022, RDx and Leykin were allegedly involved with five types of kickback schemes in order to induce referrals to RDx for laboratory testing, then submitted or caused false claims to be submitted to Medicare and Medicaid that were unnecessary or uncovered.  DOJ

January 10, 2024

National auto title lending company Community Loans of America (CLA) has agreed to pay $2.2 million in restitution and cancel $3.7 million in outstanding debt after an investigation by the Pennsylvania Attorney General’s Office found it subjected Pennsylvanian borrowers to unlawful lending practices and exorbitant interest rates.  Title loans are effectively prohibited in Pennsylvania because they are high-cost loans and lenders typically charge interest rates that are far above the state’s 25% annual interest limit.  CLA still managed to collect money and repossess vehicles from Pennsylvanian consumers by claiming to have offices in the state but redirecting consumers to locations in Delaware.  PA AG

January 10, 2024

In the largest civil penalty ever for a Clean Air Act case, engine manufacturer Cummins, Inc. of Indiana has agreed to pay $1.675 billion in penalties to the EPA, $164 million in penalties and $175 million in mitigation efforts to the California Air Resources Board (CARB), and $33 million in penalties to the California Attorney General’s Office to resolve charges of deliberately circumventing vehicle emissions control equipment in their engines.  Cummins allegedly installed illegal defeat devices in the engines of more than 600,000 pickup trucks nationwide.  Now, the company must recall those engines and update the control software within three years, and fully offset the excess NOx emissions from those trucks by funding certain mitigation efforts.  DOJ; CA AG