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Testing Federal Healthcare Laws: Risks In Genetic Testing Programs

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This article was written by Adam Braverman, Nathan Mendell, Katherine Driscoll, and Megan Baffaro and discusses the risks...

We are Morrison Foerster — a global firm of exceptional credentials. Our clients include some of the largest financial institutions, investment banks, and Fortune 100, technology, and life sciences companies. Our lawyers are committed to achieving innovative and business-minded results for our clients, while preserving the differences that make us stronger.Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Prior results do not guarantee a similar outcome.

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This article was written by Adam Braverman, Nathan Mendell, Katherine Driscoll, and Megan Baffaro and discusses the risks associated with genetic testing programs under federal healthcare laws, particularly focusing on the False Claims Act (FCA) and the Anti-Kickback Statute (AKS). It highlights the Department of Justice's increased scrutiny on healthcare companies, especially those involved in genetic testing, due to potential AKS liability. The authors examine recent advisory opinions and enforcement actions, providing guidance on structuring genetic-testing programs to mitigate risks of fraud and improper inducements. The article emphasizes the importance of designing programs that comply with regulatory requirements to avoid government intervention.Read the <a href="https://www.lifescienceleader.com/doc/testing-federal-healthcare-laws-risks-in-genetic-testing-programs-0001" target="_blank">full article</a>.

Testing Federal Healthcare Laws: Risks In Genetic Testing Programs

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Adam L. Braverman is a partner in Morrison Foerster’s Investigations + White Collar Defense practice. Adam formerly served as an Associate Deputy Attorney General for the U.S. Department of Justice (DOJ) and as the U.S. Attorney for the Southern District of California. Adam has represented public and private companies and their executives in complex government-facing probes, which have resulted in favorable outcomes and declinations by the government. He also represents boards of directors and companies in conducting complex internal investigations and compliance reviews. He has particular experience representing clients in investigations related to the False Claims Act (FCA) and Anti-Kickback Statute (AKS), procurement fraud, bribery, and national security, among other issues. He has successfully represented public companies and their boards of directors and officers in SEC enforcement actions and securities class actions. Adam also designs compliance policies on behalf of corporate clients and conducts trainings to ensure best practices in light of recent revisions to DOJ’s Evaluation of Corporate Compliance Programs and Corporate Criminal Enforcement Policies.Additionally, Adam advises clients on all aspects of complex commercial litigation in federal and state trial and appellate courts and in arbitration. He has represented clients in actions involving breaches of contracts and a wide array of complex commercial disputes.Before joining MoFo, Adam spent 13 years at DOJ, where he served in senior-level leadership positions in multiple administrations. As an Associate Deputy Attorney General, he advised the Deputy Attorney General on litigation and policy matters and was designated to coordinate DOJ’s efforts to investigate and prosecute fraud in connection with COVID-19 and CARES Act relief funds. During his tenure, he worked closely with all of DOJ’s law enforcement agencies, other federal agencies, INTERPOL, and state and local law enforcement agencies and associations.Adam also served as U.S. Attorney for the Southern District of California, where he managed one of the largest and busiest U.S. Attorney’s Offices in the country, comprised of nearly 300 employees. In this role, Adam was responsible for enforcing all violations of federal law in the district and defending the nation in all civil lawsuits. Prior to becoming U.S. Attorney, Adam was an Assistant U.S. Attorney and Deputy Chief, leading complex investigations and prosecutions of large-scale international criminal organizations. Prior to joining the government, Adam was an associate at a leading global law firm, where he dedicated his practice to civil litigation, white collar criminal cases, and internal investigations.Adam received his J.D. from the George Washington University School of Law and his B.A., cum laude, from the George Washington University.<h4>Representative Experience</h4><ul><li>A major U.S. defense contractor in an FCA matter involving allegations of fraudulent billing and workplace misconduct by a former employee in which the government declined to intervene and the relator dismissed the matter.</li><li>A small U.S. defense contractor in an FCA matter involving allegations of fraudulent billing and misrepresentations on grant applications in which the government closed its investigation.</li><li>A major U.S. defense contractor in an FCA matter involving allegations of fraudulent billing in which the court granted a motion to dismiss the matter.</li><li>An international defense contractor in a DOJ criminal investigation of allegations of bribery, wire fraud, and money laundering in which the government closed its investigation.</li><li>A major U.S. defense contractor in an investigation involving allegations of U.S. sanctions violations in which the government took no action.</li><li>A large for-profit college in multiple investigations involving allegations that the company improperly received and used federal funds in which the government closed its investigation.</li><li>An individual investigated by DOJ for alleged criminal violations of International Traffic in Arms Regulations in which the government closed its investigation.</li><li>A public company in a Securities Exchange Act Section 14(a) challenge to a proxy statement alleging material omissions in which the court denied a preliminary injunction and granted a motion to dismiss the case.</li><li>Healthcare organizations and private equity firms in FCA matters involving fraudulent billing and kickback allegations. </li><li>A professional sports team in a government investigation in which the government closed its investigation.</li><li>An entity in connection with the sale of a portion of a professional sports team.</li></ul>

Adam Braverman

Partner

Nathaniel (Nate) Mendell is a partner in Morrison Foerster’s Investigations + White Collar Defense and Privacy + Data Security practice groups and was the former Acting U.S. Attorney for the United States Attorney’s Office for the District of Massachusetts. He represents companies, financial institutions, boards, and executives through all phases of investigation and litigation involving allegations of corporate healthcare fraud, securities and other financial fraud, public corruption, criminal intellectual property theft, data breach or disclosure, and international money laundering. Nate leverages his two decades of service in the U.S. Department of Justice to offer clients an invaluable insider perspective on white collar defense, internal investigations, cyber breaches, and government enforcement actions.Prior to joining Morrison Foerster, Nate served as First Assistant U.S. Attorney and Senior Litigation Counsel advising the U.S. Attorney. As Acting U.S. Attorney, Nate led over 135 prosecutors and reported directly to the Attorney General. Before serving as First Assistant, Nate was Chief of the Narcotics and Money Laundering Unit, where he led more than a dozen prosecutors investigating and prosecuting money laundering cases across the United States, Colombia, Europe, and the Middle East. He also contributed to the creation of the District Court’s RISE Program and was an Assistant U.S. Attorney in the Southern District of Florida.Nate earned his B.A., cum laude, from Amherst College and earned his J.D. from Harvard Law School where he served as the Editor in Chief of the Harvard Latino Law Review.<h4>Representative Experience</h4><h5>Defense Experience</h5><ul><li>Representation of a multinational holding company in a DOJ investigation arising from the client’s investment into a telehealth company under investigation for the unlawful prescription of controlled substances involving potential violations of the Controlled Substances Act (CSA) and the False Claims Act (FCA).</li><li>Advising a pharmaceutical company seeking to mitigate Anti-Kickback Statute (AKS) risk in supporting commercially insured patients in the transition to a new biosimilar therapy. While providing support to commercially insured patients and carving out federally insured patients is not prohibited, such arrangements can draw government scrutiny if they are intended to induce or “pull through” federally insured patients to use medical services or products. We are helping formulate practical parameters for a program that will assist commercially insured patients, meet business goals, and comply with applicable laws and regulations. </li><li>Advising pharmaceutical company whose trade secrets and confidential information were used as the basis for a patent application filed by a competitor and former employees.</li><li>Advising a commercial bank on the acquisition of a medical records company under investigation by DOJ for alleged violations of the FCA.</li><li>Advising an investment management company on the acquisition of a medical device manufacturer under investigation by the DOJ for alleged violations of the FCA.</li><li>Provided training to an online market place regarding the legal framework of the AKS, recent enforcement trends, and compliance best practices.</li></ul><h5>Government Experience</h5><ul><li>Violations of the AKS against a variety of major pharmaceutical companies, which culminated in settlements involving nearly $1,000,000,000 in fines and restitution to resolve the improper use of “patient assistance programs” to subsidize patient co-pays.</li><li>Violations of the CSA against the founder and chief executive officer of a publicly‑traded pharmaceutical company related to the opioids epidemic.</li><li>FCA matters involving improper inducements, insurance pull-through schemes, and improper billing and coding practices.</li><li>Fraud and tax fraud charges against a professor suspected of stealing trade secrets and intellectual property from U.S. interests for a foreign government.</li><li>Conspiracy to obtain unauthorized access to computers and to commit wire fraud and securities fraud charges against a Russian businessman.</li><li>Charges of mail fraud, money laundering, bribery, conspiracy to commit mail and wire fraud, and racketeering conspiracy against coaches, administrators, and parents who fraudulently obtained test scores and college admissions for students related to the Varsity Blues scandal.</li><li>Six-week mail and wire fraud trial against an American businessman involved in a multi-million dollar Ponzi scheme.</li></ul>

Nathaniel R. Mendell

Katherine (Kate) Driscoll is a partner in Morrison Foerster’s Investigations + White Collar Defense Practice Group. Kate focuses her practice on investigations, enforcement actions, and compliance, representing companies and senior business executives. Kate has extensive experience in a wide range of criminal and civil cases, with an emphasis on pharmaceutical and life sciences clients, related to healthcare fraud, the Anti-Kickback Statute (AKS), the False Claims Act (FCA), and the Foreign Corrupt Practices Act. Kate routinely consults with clients on all manner of compliance matters, including providing risk assessments, gap analyses, and maturity evaluations. Kate also recently completed a secondment with a global consulting firm, leading government-facing investigations relating to healthcare matters.Prior to joining Morrison Foerster, Kate served as an Assistant United States Attorney in the U.S. Attorney’s Office for the Eastern District of Pennsylvania. Kate has significant trial experience, obtaining multiple jury and bench trial verdicts. As a federal prosecutor, Kate ran large-scale white-collar investigations, including complex wiretap and forensic financial investigations, involving healthcare fraud, illegal distribution of prescription drugs, money laundering, wire fraud, bank fraud, and tax fraud. Kate conducted parallel investigations with the Civil Division related to potential False Claims Act violations, and the SEC for potential violations of securities laws. Among her experience, Kate led the criminal prosecution of one of the largest theft of trade secrets cases in United States history, involving a leading multinational pharmaceutical company, and also led COVID-19-related government fraud investigations, involving the CARES Act and the Paycheck Protection Program.Kate received the 2019 Inspector General’s Award for Excellence in Fighting Fraud, Waste, and Abuse for the successful prosecution and conviction of healthcare professionals who illegally distributed millions of dollars in prescription drugs. She was also part of the prosecution team that was awarded the Prosecutor of the Year Award for 2021 from the Coalition Against Insurance Fraud regarding work on a significant arson, healthcare fraud, and tax fraud prosecution that impacted hundreds of victims and caused significant damage to the City of Philadelphia. Kate has advised and worked closely with a variety of federal and local law enforcement agencies.Kate is a lecturer at Yale University, teaching a course on white-collar investigations and prosecutions. Earlier in her career, Kate clerked for the Honorable Pamela K. Chen of the U.S. District Court Eastern District of New York. Kate earned her J.D. from the University of Pennsylvania Law School and her A.B. summa cum laude from Bryn Mawr College.<h4 dir="ltr">Representative Experience</h4>Defense Experience<ul><li dir="ltr">Represented McKinsey & Company in negotiating a $650 million five-year deferred prosecution agreement and civil False Claims Act settlement with DOJ and Corporate Integrity Agreement with HHS-OIG arising from McKinsey’s past work for opioid manufacturers, including Purdue Pharma.</li><li dir="ltr">Representation of Anthony Ornato, a former senior career civil servant who recently served as White House Deputy Chief of Staff of Operations, in the January 6 Select Committee investigation and related government investigations.</li><li dir="ltr">Representation of a multinational pharmaceutical and medical device manufacturer in various internal investigations relating to employees’ alleged kickback violations, submission of false claims, bribery, collusion with business partners, and corporate governance issues across North America.</li><li dir="ltr">Representation of a multinational holding company in a DOJ investigation arising from the client’s investment into a telehealth company under investigation for the unlawful prescription of controlled substances involving potential violations of the Controlled Substances Act (CSA) and the FCA.</li><li dir="ltr">Advising a pharmaceutical company seeking to mitigate AKS risk in supporting commercially insured patients in the transition to a new biosimilar therapy.</li><li dir="ltr">Representation of a global manufacturing company in reviewing and enhancing their anti-corruption and bribery codes of conduct, third-party due diligence protocols, and procurement policies.</li><li dir="ltr">Internal investigation in the U.S., Europe, and Latin America on behalf of a financial institution, which involved over US$1.3 billion in potential liabilities.</li></ul>Government Experience<ul><li dir="ltr">Matter involving scientists employed by a multinational pharmaceutical company who were criminally charged for conspiracy, theft of trade secrets, wire fraud, and money laundering, all relating to theft of cancer research platforms, valued at more than US$550 million.</li><li dir="ltr">Matter involving a scientist who was extradited from Switzerland after indictment for conspiracy to steal trade secrets related to the theft of research and other confidential information from several multinational pharmaceutical companies.</li><li dir="ltr">Matter involving physicians criminally charged for prescribing more than US$5 million in prescription drugs used to treat opioid addiction outside the course of professional practice and not for legitimate medical purposes.</li><li dir="ltr">Matter involving a financial advisor who was criminally charged for diversion of client funds through bank, mail, and wire fraud, and aggravated identity theft.</li><li dir="ltr">Matter involving arson that displaced hundreds of victims and injured several firefighters. Obtained convictions for all defendants and US$22 million in restitution for the victims. Brought related indictments charging additional criminal conduct, including healthcare fraud, tax fraud, and federal benefits fraud.</li></ul><h4 dir="ltr">Memberships</h4><ul><li dir="ltr">National LGBTQ+ Bar Association</li><li dir="ltr">Philadelphia LGBTQ Bar Association</li><li dir="ltr">Pennsylvania Association Criminal Defense Lawyers (Planning Committee)</li><li dir="ltr">Federal Criminal Law Committee in the Eastern District of Pennsylvania (Executive Committee)</li><li dir="ltr">University of Pennsylvania Inn of Court</li><li dir="ltr">Women’s White Collar Defense Association</li></ul>

Kate Driscoll

Megan Baffaro is an associate in Morrison Foerster’s Boston office and a member of the firm’s Litigation Group.Before joining Morrison Foerster, Megan served as a judicial extern for the U.S. District Court for the Western District of Washington and as a litigation assistant at Boston University School of Law. She also worked as a summer associate at the firm, where she conducted legal research, assisted in editing and drafting legal briefs, and performed document reviews.Megan earned her J.D. magna cum laude from Boston University School of Law, where she was honored as a G. Joseph Tauro Distinguished Scholar and served as note editor for the Public Interest Law Journal. She earned her B.A. magna cum laude in political science and law, societies, and justice from the University of Washington, receiving the Robert Dahl Award for Outstanding Senior and the Mary Gates Achievement Award for her exceptional academic contributions.