The global legal practice of Squire Sanders announced today that its legal investigations team, which included lawyers from the white collar, healthcare and litigation groups, secured a qui tam victory for client American Kidney Stone Management, Ltd. (AKSM), a leading provider of lithotripsy services throughout the US. On August 23, the Department of Justice (DOJ) and the Office of Inspector General (OIG) of the Department of Health and Human Services dismissed a complaint filed by a "whistleblower" against AKSM that alleged violations of the False Claims Act.
Prior to this dismissal, the Squire Sanders team persuasively argued that AKSM was abiding by federal healthcare and False Claims Act laws and employing industry best practices in the operation of its business.
"The dismissal of this qui tam is truly a testament to the strategy and skill of our team-work, in methodically managing this matter while embracing state-of-the-art document search technology to best present our client’s case," said Thomas E. Zeno, lead counsel of the investigations team and former federal prosecutor of nearly 30 years with DOJ in Washington, DC. "We appreciate the government's willingness to allow us to fully explain and present the facts about AKSM’s business structure, procedures and services and thus demonstrate the company's full compliance with the law."
This dismissal occurs less than one year after the government informed AKSM of its investigation. The full complaint was under seal until its dismissal to allow the government time to complete its investigation.
"We have been steadfast in our belief that our business model, operations and procedures are all in full compliance with the law," said Dr. Henry A. Wise, II, chairman and CEO of AKSM. "Although no company wants to be the subject of a government investigation, and while it was challenging to provide the government the extensive amount of documentation required, we support the government's efforts to eliminate fraud in the healthcare system. We are grateful to Squire Sanders' team that provided the guidance, strategy and expert legal counsel that secured this dismissal."
The Squire Sanders legal team included Thomas E. Zeno (white collar) from the Washington DC office, and John M. Kirsner (healthcare), Aneca E. Lasley (litigation) and Elizabeth E. Trende (healthcare) from the Columbus office.
Squire Sanders cross-practice team, with lawyers from the healthcare, white collar and litigation practices, works with clients, including boards of directors of publicly listed and privately held companies and their audit committees, across the globe and across all industries to aggressively address the complex legal and regulatory challenges, investigations and derivative claims brought by government regulators and enforcement agencies, such as the DOJ and OIG of the Department of Health and Human Services, Food and Drug Administration, among others.
Among its other businesses, AKSM is a management company that oversees the day-to-day operations of physician-owned lithotripsy companies. Lithotripsy is a medical procedure that eliminates kidney stones by smashing them with non-invasive shock waves instead of removing them through surgery. Founded in 1984 in Columbus, AKSM currently manages companies throughout the U.S.
In October 2011, the DOJ served a Civil Investigative Demand (CID) on a physician-owned lithotripsy service provider managed by AKSM. Subsequent to this CID, the government partially unsealed a complaint that revealed that AKSM and hundreds of other defendants were under investigation and alleged, among others things, that AKSM's business model was flawed and beyond the bounds of the law.
This complaint resembled other OIG investigations, one recently completed in 2010 against another provider of lithotripsy services. The result of that investigation required that company to pay US$7.3 million in Civil Monetary Penalties and enter into a five-year Corporate Integrity Agreement. That agreement settled OIG allegations that that company violated the federal Anti-Kickback laws and the Physician Self-Referral Law, known as the Stark law.
Unlike the 2010 case, the August 23 dismissal involves no payments by or Corporate Integrity Agreement with AKSM. The full complaint had been under seal until it moved to dismiss the action against AKSM and all defendants in its entirety on August 23.
The Squire Sanders investigations team responded to the complaint by distinguishing AKSM’s business management model. The team extolled AKSM’s superior, technologically advanced equipment and stringent medical quality standards, which are overseen by a corporate Medical Director. AKSM also has substantial compliance measures in place including a corporate compliance officer who establishes and maintains a Code of Conduct and develops compliance programs for the managed companies. The compliance officer also monitors, identifies and implements plans to correct problems related to these standards.
The case is United States of America ex rel. Anne E. Mitchell v. United Medical Systems, No. 2:11-cv-10090-VAR-MKM (E.D. MICH.).