FCA Suit Stealer Gets Guideline Sentence

March 19th, 2018 by Qui Tam

What Happened?

Jeffrey Wertkin, a former Akin Gump Strauss Hauer & Feld LLP partner who previously had worked at the Department of Justice (“DOJ”), received 30 months’ imprisonment for offenses related to his theft and attempted sale of a sealed government whistleblower complaint to a cyber-security company being investigated by the DOJ. The sentence was at the low end of Wertkin’s 30-37-month range under the U.S. Sentencing Guidelines and far more than the year-and-a-day sentence that his attorney had requested.

The Rundown

In November 2017, Wertkin pleaded guilty in the U.S. District Court for the Northern District of California to two counts of obstruction of justice, in violation of 18 U.S.C. § 1505; and one count of interstate transportation of stolen goods, in violation of 18 U.S.C. § 2314.  As he transitioned from his role as a civil prosecutor at the DOJ to Akin Gump’s Washington D.C. office, Wertkin stole approximately 40 sealed complaints. In November 2016, he cold-called general counsel at a Silicon Valley company and left a voicemail offering to provide information about a complaint that implicated the company for a fee.  The general counsel called the FBI, and, after a series of monitored phone calls with the general counsel, Wertkin – dressed in a wig and sunglasses – was arrested in a Sunnyvale, California hotel, at which he intended to exchange the complaint for more than $300,000 in cash.

In a lengthy and well-crafted sentencing memorandum, Wertkin’s counsel, Cristina Arguedas of Arguenda Cassman & Headley LLP focused on his undiagnosed anxiety and depression, the personal struggles caused by a taxing career, the aberrant nature of his misconduct, and the steps he had taken towards rehabilitation, including his cooperation and his embrace of mental health treatment. Arguedas submitted 85 character letters on Wertkin’s behalf.

In its filing, the government, which requested a mid-guidelines sentence of 34 months, focused its attention on Wertkin’s position of public trust when he stole the complaints and the continuing nature of his course of conduct. At the sentencing hearing, the government keyed in on the number of potential victims, noting that, after being charged, Wertkin had staged his office at Akin Gump to make it look as though the complaints had been mailed to him by the DOJ.  That act of obstruction initiated an investigation into blameless DOJ attorneys.

The Take Away

Though crediting Wertkin’s struggles with mental health issues and his significant support from the community, the Court fashioned a guidelines sentence. Among other factors, the need for general deterrence weighed heavily on the Court. While Wertkin, who had forfeited his law license, would never engage in this kind of activity again, the Court had to send a message that these matters are taken seriously.

A Simple Fix to Preserve the Status Quo in Light of Escobar

March 9th, 2018 by Qui Tam

The Supreme Court’s ruling in Escobar creates a new tension between CMS’s historical “pay and chase” framework and the idea that when the government continues to pay claims when it has information regarding potential fraud, the conduct involved is not material to the payment decision. Admittedly, it would be premature to commence administrative proceedings to debar providers at the inception of an investigation. However, we humbly suggest a relatively simple and straightforward solution that allows both sides (CMS and providers) to maintain the status quo during an investigation.

When facts are brought to light that, if supported, may be material to CMS’s decision to pay, the agency should issue a notice to the entity submitting the claims:

This communication is notice to your organization that we are in possession of information regarding conduct which, if established, may be material to the decision to reimburse your organization and other individuals or organizations impacted by these reimbursement decisions for claims submitted by you or on your behalf. You are on notice that past and future claims for reimbursement are impacted by this information. This notice also applies to any entities contributing to the claims for reimbursement submitted by you or on your behalf to CMS.

Ten Questions That Should be on Every Health Care Lawyer’s Radar in 2018

February 15th, 2018 by Qui Tam

1. How far will the Supreme Court’s materiality ruling in Escobar extend?

2. Will there be any type of legislative “fix” to the Escobar ruling, and its growing progeny, being decided by scores of federal courts?

3. Will CMS more aggressively scrutinize provider submitted claims to avoid the gutting of multiple fraud investigations based on Escobar? If so, how will CMS accomplish this task?

4. Does the Department of Justice’s guidance issued on January 10, 2018, portend its future view of Escobar?

5. How will the intense mergers and acquisitions of health care providers “shake out” in the wake of the erosion and possible demise of the Affordable Care Act?

6. Will due diligence take on a new dimension in light of breakneck health care consolidation?

7. Will corporate health care compliance efforts keep up with a rapidly changing health care landscape, which includes for-profit entities, non-profit entities, and public agencies – many of which are consolidating?

8. What is the scope and appetite of State Attorneys General for robust health care investigations?

9. Will kickback investigations increase in light of the Escobar ruling?

10. Will Congress finally fix the massive Medicare Part D Prescription Drug Program to allow the United States government to negotiate the best possible prices for all Medicare beneficiaries?

When Is a Kickback Not a Kickback? Third Circuit Says It Must Be Linked to Specific False Claim

February 1st, 2018 by Qui Tam

What Happened?

In affirming the district court’s entry of summary judgment in favor of Accredo Health Group, Inc., and its co-defendants, the U.S. Court of Appeals for the Third Circuit held that a plaintiff alleging a False Claims Act (“FCA”) violation based on an anti-kickback theory must show that (1) a particular patient was exposed to a kickback-tainted referral, and (2) a provider submitted a claim for reimbursement pertaining to that patient.

The Rundown

In United States ex rel. Greenfield v. Medco Health Solutions, Inc., et al., the relator sued Accredo Health Group, a specialty pharmacy that provides home health care for hemophilia patients, and its affiliates (collectively, “Accredo”). Accredo made donations to numerous hemophilia-related charities, two of which, according to the relator’s allegations, recommended Accredo as a provider for hemophilia patients. Relator Greenfield moved for summary judgment before the district court, arguing that Accredo’s donations-for-referrals scheme violated the Anti-Kickback Statute (“AKS)), 42 U.S.C. § 1320a-7b(b), and that the scheme ran afoul of the FCA, 31 U.S.C. § 3729 et seq., because (1) some of the referrals were directed towards Medicare patients, and (2) when submitting Medicare claims for payment, Accredo falsely certified that it had complied with the AKS. Accredo cross-moved for summary judgment on the ground that the record lacked evidence that any Medicare patient had purchased prescriptions because of Accredo’s donations to specific charities.

Without reaching the question whether Greenfield had established a kickback scheme, the district court granted Accredo’s motion for summary judgment, while denying the relator’s motion for the same relief.  It held that an FCA claim based on an anti-kickback theory requires the plaintiff to show that, as a result of the AKS violation, the defendant received payment from the federal government in violation of the FCA. Greenfield could not do that, in the Court’s view, because there was no evidence that any Medicare patient chose Accredo due to its charitable donations.

Greenfield appealed, and the U.S. Court of Appeals for the Third Circuit affirmed the district court’s grant of summary judgment in favor of Accredo. But it rejected the district court’s imposition of a “but-for” causation requirement. The Court analyzed the language of the AKS, amended in 2010 to provide that “a claim that includes items or services resulting from a violation of [the statute] constitutes a false of fraudulent claim for the purposes of [the FCA].”  According to the Court, the “resulting from” language was too broad to require proof that the Medicare patient would not have chosen the provider but for the kickback. Were the district court’s interpretation correct, the both AKS drafters’ intention to strengthen the government’s ability to punish fraudulent activities, and its revisers’ intention to bolster whistleblower actions based on medical care kickbacks would have been thwarted.

However, the Court held that a plaintiff must still provide evidence of the actual submission of a false claim to prevail at trial.  Demonstrating that a kickback scheme exists is not enough; a plaintiff must establish that the underlying medical care is connected to the breach of the AKS.  Because Greenfield could point to no “record evidence that shows a link between the alleged kickbacks and the medical care received by at least one of Accredo’s . . . federally insured patients,” the district court correctly entered summary judgment for Accredo.

The Take Away

The Court rejected both (1) Greenfield’s position that that taint of a kickback scheme is enough to infect all referrals to Medicare patients, and (2) Accredo’s argument – adopted by the district court – that a plaintiff must prove that federal beneficiaries would not have used the relevant services absent the kickback scheme. Its middle-ground position, requiring evidence that shows a “link” between kickbacks and care, is sure to spawn future litigation regarding how strong and of what character that connection must be.

4th Circuit Finds Misrepresentations about Medical Necessity for Urinalysis Testing are Material

November 3rd, 2017 by Qui Tam

The United States Court of Appeals for the Fourth Circuit has affirmed a District Court’s judgment on a husband and wife’s health care fraud convictions.  The Appellate Court found that medical necessity was a “critical prerequisite to payment” and insurers would not have knowingly paid for medically unnecessary urine drug tests.

Joseph Webb and Beth Palin, husband and wife, had been convicted of billing Medicare and private insurers for unnecessary urine drug tests.  Palin owned Mountain Empire Medical Care, an addiction medicine clinic. Palin also owned Bristol Laboratories, which processed urine drug tests ordered by physicians at her addiction medicine clinic and elsewhere.  Webb assisted his wife in the operation of both of these facilities.  Bristol Laboratories performed two types of urine tests: a basic, inexpensive “quick-cup” tests and a more sophisticated and expensive “analyzer” test.   Most referring physicians did not designate a specific type of test.  Webb and Palin decided for them.  While uninsured patients received the “quick-cup” test, insured patients routinely received both the “quick-cup” and the “analyzer” test.  Bristol Laboratories billed both government payors and private insurers for the more expensive “analyzer” test.  After a bench trial, they were found guilty of health care fraud.  Once the Supreme Court issued their ruling in Escobar, however, the couple moved for an acquittal or a new trial.

The couple attempted to overturn their convictions by arguing that Escobar has established a new materiality standard that applies to all criminal fraud statutes.  They further argued that under the new standard, their misrepresentations were not material.  The 4th Circuit Court disagreed that a new materiality standard has been established: “We do not believe the Supreme Court intended to broadly ‘overrule’ materiality standards that had previously applied in the context of criminal fraud. And we doubt the Court’s examination of how materiality applies under ‘implied false certification’ FCA cases transfers to all cases charging fraud, or even all cases charging health care fraud.”

Despite noting that they doubt that a new materiality standard applies, the 4th Circuit panel considered the argument that a new standard had been established.  The Court found that there was ample evidence to show that the insurers would not have knowingly paid for medically unnecessary tests.  The Court then applied the Escobar materiality standard, stating, “If materiality ‘looks to the effect on the likely or actual behavior of the recipient of the alleged misrepresentation,’ as provided in Universal Health, the misrepresentations here were material: insurers would not have paid for the sophisticated tests had they known those tests were unnecessary.”  The Court found that even if the Escobar standard applied, the couple’s misrepresentations were material.  Additionally, the Court found that any error on the part of the District Court was harmless because the verdict would have been the same absent the error.

All of Webb and Palin’s arguments fell short, and the 4th Circuit affirmed their convictions for health care fraud.

PBMs – Goliaths of Healthcare Operating in the Shadows

July 7th, 2017 by Qui Tam

The Pharmacy Benefit Management (PBM) industry is the Goliath of healthcare. PBMs have a huge impact on prescription healthcare that is little understood outside of the pharmacy industry. According to a November 2016 report, PBMs in the United States have revenues of $423 billion, they experienced 11-16% growth between 2011 and 2016, and they employ a workforce of at least 30,000. Additionally, Congressional testimony revealed that the top PBMs nearly doubled their profits over the past five years. The breadth and depth of the role that PBMs play in the lifecycle of a prescription drug is unequaled in healthcare. PBMs touch, in one aspect or another, nearly every drug dispensed nationally.  But if you ask the average consumer who their particular PBM is, or even what a PBM does, few could answer those questions.

PBMs are middle men, “third-party administrators” that act as on behalf of private insurers to provide all of the services needed to manage a prescription benefit. PBMs provide drug plan design services, meaning that they assist insurers in designing and maintaining the formulary, which determines what medications are covered under a particular plan. PBMs also negotiate with drug manufacturers to obtain favorable drug prices and related manufacturer rebates. Once a drug program is implemented, PBMs are supposed to assist in controlling these drug costs. Through their mail order and retail pharmacy networks, PBMs determine the drug costs and dispensing fees paid by insurance companies and by beneficiaries through copays. PBMs also process and pay claims for virtually every prescription dispensed across the country every day. Companies that operate some of the largest PBMs (i.e., CVS Health and EnvisionRx), through related entities, also control huge swaths of the specialty, mail order, and retail pharmacy industry. These wholly-integrated PBMs control the entire prescription benefit process – from designing the drug programs to dispensing prescriptions.

Due to their historical involvement in commercial prescription benefit plans, PBMs play a central role in Medicare Part D, Medicaid, and other government-sponsored prescription drug programs. However, PBMs significantly impact both commercial and government-funded prescription programs, including Medicare Part D, Medicaid, prescription programs for state and federal employees, and healthcare benefits for our military, including Tricare.

Government agencies and private insurers are David to the PBM Goliaths. Identifying, quantifying, and controlling fraud, waste, and abuse in government-funded prescription drug programs, particularly as it relates to the PBM industry, is difficult at best. One of the greatest hurdles to prescription benefit oversight is the lack of transparency between the government agencies that fund drug benefits and PBMs that manage them.

Government agencies lack access to the PBM’s relationships with both drug manufacturers and their pharmacy networks, and significant related hidden income streams. One such income stream is related to the PBMs’ negotiations with drug manufactures to set drug prices paid by the PBM, as well as related volume-based rebates that are earned on specific drugs. PBMs share these rebates with drug benefit sponsors. A second income stream for PBMs results from the role PBMs play in setting drug costs and dispensing fees paid to the PBM’s network of retail, mail order and specialty pharmacies. When prescriptions are dispensed to beneficiaries, the PBM profits from the difference or “spread” between the price the PBM negotiates with drug manufactures and the price the PBM charges its network pharmacies.

The government also lacks access to the pharmacy claims data received by the PBM. It is unable to compare the pharmacy data to claims data that PBMs submit to insurance companies. In the Part D program, this same claims data is submitted to the Centers for Medicare and Medicaid Services, (“CMS”). This lack of transparency in PBM operations is an impediment to both identify and control pharmacy benefit overpayments, particularly in Medicare Part D.[1]

Although there is a recognized need for transparency between the government and the public, on one side, and the PBM industry on the other, these efforts have yet to bear fruit. For example, even before the Part D program was added to Medicare in 2006, the General Accounting Office (GAO) highlighted the need for transparency and fairness should the Medicare drug benefit be outsourced to private insurers and PBMs. Ten years later, in January of 2013, the Office of Inspector General (OIG) called for CMS to amend Part D regulations to provide its auditors with direct access to information from pharmacies and PBMs. During September of 2015 hearings before the House Judiciary Committee on the State of Competition in the Pharmacy Benefits Manager and Pharmacy Marketplaces, witnesses addressed the concentration in the PBM industry, the ownership relationships between PBMs and retail pharmacies, and the lack of transparency in PBM operations negatively impacts competition and inures to the detriment of both health insurance plans and the ultimate consumer. One witness highlighted the lack of transparency in both rebates earned by PBMs and in prices that pharmacies were paying PBMs for drugs. Representatives of the PBM industry argued that transparency with regard to drug prices would result in price fixing.

In March of 2017, Senator Ron Wyden (D-Oregon) introduced S-637, “Creating Transparency to Have Drug Rebates Unlocked (C-THRU) Act.” The bill is focused on just one aspect of PBM secrecy – the rebates paid by drug makers to PBMs. In response, the PBM industry has again argued that secrecy in rebate negotiations is essential to allow PBMs to obtain the best prices and to prevent manufacturers and pharmacies from colluding with competitors. Whether the C-THRU Act even makes it out of the Senate Finance Committee is yet to be determined.

The process to create legislation or regulations that require transparency in the PBM industry is a very long and uncertain one.  In the near term, only an industry insider can identify conduct that results in overpayments in Part D and other government-funded prescription programs. Meanwhile, PBMs continue to control the pharmacy industry, operating unchallenged and largely in secret, to create gigantic profits.


[1] See The American Consumer Institute’s “Pharmacy Benefit Managers: Market Power and Lack of Transparency.” http://www.theamericanconsumer.org/wp-content/uploads/2017/03/ACI-PBM-CG-Final.pdf

Whistleblowers’ Should Seek Counsel – Not Line the Pockets of Short Sellers

June 29th, 2017 by Qui Tam

A recent news article in the New York Times, “The Bounty Hunter of Wall Street,” featured Andrew Left, an “activist” short seller who receives leaked documents and other intelligence about publicly-traded companies from confidential sources. Armed with this information, short sellers leak negative information to the press. When the information negatively impacts the target company’s stock price, the short sellers make millions.

As the article states, short sellers use inside information related to potential wrongdoing by publicly-traded health care companies, including pharmacy benefit managers (PBMs). PBMs are involved in literally every prescription that is dispensed, nationwide, every day. They play a critical role in the Medicare prescription drug program, Medicare Part D. The PBM industry is also one of the most opaque segments of the healthcare arena. It will take someone with access to drug data received by the PBM and drug data generated by the PBM to shed light on the inner workings of this multi-billion dollar industry.

Like PBMs, virtually every healthcare company earns significant revenues from billings to government funded programs, most notably Medicare and Medicaid.  There are significant federal dollars spent on the federal employees health benefits program (FEHBP), and the healthcare programs for our military, including Tricare. A major portion of state budgets are also dedicated to funding healthcare for state and county employees.

However, there is a more appropriate use for inside information related to potential wrongdoing by publicly-traded or privately held healthcare companies, including PBMs. When the inside information is related to potential healthcare fraud (or other government contractor fraud), the taxpayers who contribute their hard-earned money to federal and state treasuries, and the person who assists in that endeavor by providing needed information, should be benefitting from that information – not wealthy short sellers.

There are programs that reward insiders who assist in ferreting out wrongdoing and returning fraudulent profits to federal and state governments. Those with knowledge of potential wrongdoing by any company that profits from federal or state government funds would do well to seek competent counsel who specializes in bringing cases under the federal False Claims Act, analogous state false claims acts, or the private insurance whistleblower statutes of California and Illinois. All of these statutes provide the relator, a person who is the source of such information, with share of the recovery (from 15 to 30%, and in the case of the California statute, potentially higher), in recognition of the whistleblower’s efforts.

Attention Clinical Laboratories: You Can’t Make the Doctor the Fall Guy Anymore

June 16th, 2017 by Qui Tam

On June 9, 2017, U.S. District Judge Reggie B. Walton (D.C.) denied a clinical laboratory defendant’s motion to dismiss a whistleblower’s False Claims Act case. The Court flatly rejected the lab’s attempt to avoid liability by arguing the doctor, not the lab, determines the medical necessity of a particular test. The court found, instead, that the lab has an independent duty to ensure that the tests it performs and seeks payment for are medically necessary. The Court’s ruling was based, in large part, on the certification of medical necessity submitted by the lab on claims forms such as the CMS-1500.

In United States of America, et al. ex rel. Tina D. Groat v. Boston Heart Diagnostics Corp., Dr. Groat, National Medical Director of Women’s Health and Genetics at United Healthcare, alleged that Boston Heart Diagnostics Corporation (“Boston Heart”) performed various genetic and non-genetic tests that were not medically necessary for particular patients.  Dr. Groat alleged that Boston Heart’s marketing of tests that screened for cardiac-related issues and predicted future cardiac risk resulted in the submission of false claims for tests performed on patients with no history or current known risk or symptoms of having a cardiac problem.  Despite the lack of medical necessity, Boston Heart completed and submitted CMS-1500 forms and sought Government reimbursement for the tests performed.

As part of their marketing efforts, labs frequently supply doctors with pre-printed test requisition forms. Doctors then fill out the forms and send them to a lab with the patient’s sample (i.e., blood) to be tested. Lab providers (such as Boston Heart) must complete and submit a CMS-1500 form to get reimbursed for the services provided. This form requires the entity submitting the claim, whether a “physician or supplier,” to certify the medical necessity of the services. CMS-1500, p.2 (Emphasis added).

In finding that Boston Heart, the lab submitting the claim, was responsible for certifying the medical necessity of the tests at issue, the Court focused on the plain language of the Medicare claim form. The CMS-1500 requires the submitting physician or supplier (i.e. the lab) to complete the required data fields and certification. The Court rejected the defendant’s attempt to argue that Medicare regulations related to maintenance of documentation regarding medical necessity, 42 C.F.R. §410.32(d)(2), shifts responsibility to the patient’s physician, finding instead that the regulation requires both the doctor and lab to maintain records. The Court also noted that the lab’s independent obligation to determine medical necessity is particularly appropriate where the lab created the requisition forms as part of its marketing activities, and the lab – not the physician – was billing the Government for the tests at issue.

This important ruling will have a real-life impact on healthcare fraud enforcement efforts in the laboratory arena. Service providers are on notice that they will be held accountable for the certifications they submit to the Government in order to receive payment. Labs can no longer dodge FCA liability by pointing to medical necessity determinations which appear to have been made by or in the name of a patient’s treating physician. The lab bears primary responsibility for the truthfulness of medical necessity certifications that are made on the face of the CMS-1500 form. The Government relies on the truthfulness of these certifications in making over $7 billion in Medicare Part B payments to clinical labs annually (FYE 2015).

Advice-of-Counsel Defense Vitiates Attorney-Client Privilege, Work Product Protection

April 21st, 2017 by Qui Tam

In United States ex rel. Lutz v. Berkeley Heartlab, Inc., et al., 2017 WL 51691 (D.S.C. Apr. 5, 2017), the United States District Court for the District of South Carolina confirmed that the advice-of-counsel defense cannot be used as a sword and shield.  In this action arising under the False Claims Act, the United States alleges that laboratories (HDL and Singulex) and their marketing agents (BlueWave and its principles) violated and conspired to violate the FCA in multiple ways, including (1) offering physicians kickbacks in the form of sham processing and handling fees to order expensive tests for federal healthcare beneficiaries from the labs, and (2) waiving co-pays for federal healthcare beneficiaries.

In their amended answer to the government’s complaint, the BlueWave defendants asserted as an affirmative defense their good-faith reliance on the advice of counsel. The government sought discovery related to the legal advice and opinions rendered by the attorneys in question.  The BlueWave defendants declined to produce the requested documents, citing attorney-client privilege and work product protection, and the government moved to compel.

Earlier this month, the Court ruled in the government’s favor.  It held that the BlueWave defendants had waived the attorney-client privilege as to the entire subject matter of the advice of counsel received by asserting it as an affirmative defense in its answer.

For the same reason, it held that the BlueWave defendants had held the work product protection.  Moreover, the Court extended the waiver to attorney work product that was never communicated to the BlueWave defendants. In applying the waiver broadly to “uncommunicated work product,” as well as work product disclosed to the BlueWave defendants, the Court cited the government’s need to obtain discovery into the research conducted and considered by counsel, as well as whether any aspects of the advice was selectively ignored.

As such, the BlueWave defendants will have to produce all documents in their possession, custody, and control – including all relevant documents in the possession of their former attorneys – regarding their advice-of-counsel defense.

Fourth Circuit Allows Writs of Attachment against Defendants’ Property in False Claims Act Case

April 3rd, 2017 by Qui Tam

The United States Court of Appeals for the Fourth Circuit recently published a decision involving the government’s ability to execute writs of attachment against real and personal property as well as writs of garnishment against banks accounts. (See BlueWave Healthcare v. United States of America.)

In the underlying fraud case, Relators Lutz and Webster filed a qui tam action against a number of defendants including Robert Bradford Johnson, Floyd Calhoun Dent, and BlueWave HealthCare Consultants.  In April 2015, the United States government intervened in the case.  The relators and the government alleged that the defendants violated the Anti-Kickback Statute (42 U.S.C. 1320a-7b) and the False Claims Act (31 U.S.C. 3729 et seq.).

In 2016, the United States filed an application for prejudgment remedies under the Federal Debt Collection Procedure Act (FDCPA) before the trial court.  Specifically, the government pursued writs of attachment against personal and real property and writs of garnishment against bank accounts totaling approximately $16.7 million dollars.  This property is owned by a number of BlueWave entities, Dent and Johnson personally, and related nonparties.  The government argued that, because Defendants violated the Anti-Kickback Statute and the False Claims Act, Defendants owed the United States and the relators at least $298 million.  The government also alleged that prejudgment seizure was necessary because the defendants were actively concealing and disposing of assets.

In February 2016, the district court granted all but one of the government’s requested writs.  Defendants each filed motions to quash the writs.   In May 2016, the District Court found that the government had satisfied all of the FDCPA’s statutory requirements and denied the motions.  The defendants filed a notice of appeal to the 4th Circuit Court of Appeals.

Appellants (the defendants in the underlying case) challenged the District Court’s denial of their motions to quash.   The appellants asserted that the order was reviewable as either a collateral order or an injunction.  The Court of Appeals rejected both arguments.  First, the Court looked to the three conditions required to apply the collateral order: “The order must (1) conclusively determine the disputed question, (2) resolve an important issue separate from the merits of the action and (3) be effectively unreviewable on appeal from a final judgment.” The Court focused on the second condition that requires that the order must resolve an important issue separate from the merits of the action.  The Court found that the order was so intertwined with the merits of the qui tam action, that the collateral order doctrine could not be applied.

Next, the Court turned to the argument that the order could be reviewed as an injunction.  The Court ruled that the order denying the motion to quash could not be reviewed as such because it did not meet the basic requirements of an injunction.  The Court concluded that the denial was an unreviewable interlocutory order and dismissed for lack of jurisdiction.

The ruling allows the government to keep the writs of attachment active and preserve the defendants’ funds until a final judgment is reached in the qui tam case.