Despite the unprecedented challenges of the COVID-19 pandemic, mergers and acquisitions in the health care industry have continued apace and show no signs of slowing. According to a recent PricewaterhouseCoopers report, these types of transactions surged by 56% in the 12-month period ending November 15, 2021, as compared to 2020, with particularly high growth among physician medical groups. Amidst all this activity, the government's False Claims Act (FCA) enforcement efforts are starting to focus with increasing regularity not only on private equity-owned health care companies, but also on private equity investors themselves. In fact, 2021 saw multiple developments that are likely to give the Department of Justice (DOJ) and whistleblowers the impetus for FCA lawsuits targeting private equity firms.
For example, in July 2021, national electroencephalography (EEG) testing company Alliance Family of Companies LLC (Alliance) agreed to pay $13.5 million and enter into a five-year Corporate Integrity Agreement with the U.S. Department of Health and Human Services' Office of Inspector General (OIG) to resolve allegations of kickbacks and other misconduct, including the submission of false claims to Medicare, Medicaid, TRICARE and the Federal Employees Health Benefits Program.1 The government claimed that Alliance provided free EEG test interpretation reports to primary care physicians, resulting in those physicians profiting from billing federal health care programs as though they had personally performed the professional component of the service...
