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Primary Care Providers Win Challenge of CMS Interpretation of Enhanced Payment Law

With the help and support of the Tennessee Medical Association, 21 Tennessee physicians of underserved communities joined together and retained Bass, Berry & Sims to file suit against the Centers for Medicare & Medicaid Services to stop improper collection efforts. Our team, led by David King, was successful in halting efforts to recoup TennCare payments that were used legitimately to expand services in communities that needed them. Read more

Tennessee Medical Association & Bass, Berry & Sims

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Download the Healthcare Fraud & Abuse Review 2017, authored by Bass, Berry & Sims

The Healthcare Fraud & Abuse Review 2017 details all healthcare-related False Claims Act settlements from last year, organized by particular sectors of the healthcare industry. In addition to reviewing all healthcare fraud-related settlements, the Review includes updates on enforcement-related litigation involving the Stark Law and Anti-Kickback Statute, and looks at the continued implications from the government's focus on enforcement efforts involving individual actors in connection with civil and criminal healthcare fraud investigations.

Click here to download the Review.

SCOTUS Limits SEC Disgorgement Remedies

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June 6, 2017

On June 5, 2017, the U.S. Supreme Court unanimously held that SEC disgorgement remedies used as punitive sanctions for violating federal securities laws constitute civil penalties and are subject to the five-year statute of limitations of 28 U.S.C. § 2462. Kokesh v. S.E.C., No. 16-529, 2017 WL 2407471 (U.S. June 5, 2017).

Section 2462's five-year limitations period applies to any "action, suit or proceeding for the enforcement of any civil fine, penalty, or forfeiture, pecuniary or otherwise." 28 U.S.C. § 2462. In 2013, the Supreme Court in Gabelli v. S.E.C., 568 U.S. 442, held that the five-year statute of limitations applies when the Commission seeks statutory monetary penalties. To avoid the implications of the five-year statute of limitations, the SEC sought a disgorgement claim of $34.9 million ($29.9 million of which resulted from violations outside the limitations period). The district court, in a decision upheld by the Tenth Circuit, held the disgorgement claim was not a penalty within the meaning of Section 2462. As a result, the SEC was awarded its full disgorgement request after a five-day trial wherein the jury found the defendant had violated the federal securities laws.

In now reversing the decision of the Tenth Circuit and resolving a circuit split on this issue, the Supreme Court held that "SEC disgorgement constitutes a penalty within the meaning of § 2462." Kokesh, 2017 WL 2407471, at *7. The Supreme Court relied on the Court's 2013 Gabelli decision and prior precedent dating back as far as 1899 to hold that SEC disgorgement goes "'beyond compensation'" and is "'intended to punish, and label defendants wrongdoers.'" Id. at *6 (quoting Gabelli, 568 U.S. at 451-52).

Justice Sotomayor wrote the opinion and included an important footnote inviting further litigation on the applicability of SEC disgorgement remedies with a caution that the opinion should not be "interpreted as an opinion on whether courts possess authority to order disgorgement in SEC enforcement proceedings or on whether courts have properly applied disgorgement principles in this context." Id. at *5 n.3. It, therefore, remains to be seen how the SEC will approach disgorgement requests in future SEC proceedings after this decision but it is now clear that any such requests must be brought within five years of when the alleged fraud occurs.

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