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In “Judicious approach: ‘Kelo v. New London’ ” [NLJ, Aug. 3], Richard Tranter makes several incorrect assertions about the Institute for Justice, the Castle Coalition and the history of eminent domain law. First, his statement that the Institute for Justice and the Castle Coalition made “strenuous efforts” to unseat Norwood, Ohio, City Council members is simply untrue. The role of the Institute for Justice and the Castle Coalition is to protect home and business owners-like those we represent in Norwood-threatened by eminent domain abuse, and we do that through public interest litigation and public advocacy-never by supporting or opposing candidates for office. Second, the notion that Kelo v. New London did not represent a fundamental change in the interpretation of “public use” is untenable. The U.S. Supreme Court had never before sanctioned the forced transfer of property from A to B simply because B might be able to make more money with the property. Like his fellow apologists for eminent domain abuse, Mr. Tranter would prefer that nothing be done to prevent the kind of privately driven land-grabs of homes and businesses that occurred in New London, Conn., and Norwood. However, the time has come to stop letting the foxes-politically connected developers and their attorneys-guard the henhouse. Bert Gall Washington The writer is an attorney at the Institute for Justice. False Claims Act cases “Recent False Claims Act prosecutions fall flat” [NLJ, July 4], by Robert Salcido, contains a number of errors that undercut the author’s argument that the health care industry has been the victim of overenforcement of the False Claims Act. In fact, the number and size of civil fraud recoveries reflect both the magnitude of the problem facing the nation’s health care system and the critical importance that effective compliance programs can play in strengthening the integrity of that system. The most glaring error lies in one of the article’s underlying assumptions- that the Department of Health and Human Services’ Office of Inspector General (OIG) uses civil fraud recoveries to expand its budget, staff and authority. This view reflects a fundamental misinterpretation of the OIG’s funding authorities. Pursuant to the Health Insurance Portability and Accountability Act of 1996 (HIPAA), Pub. L. 104-191, the majority of anti-fraud activities of the U.S. Department of Justice and OIG are funded through appropriated funds from the Medicare Trust Fund to a Health Care Fraud and Abuse Control Account. These appropriations are for stipulated amounts, fixed by HIPAA, and have remained unchanged for the past three years. In short, Congress structured the funding of the OIG to preclude any “bounty” system. The funding of health care fraud and abuse activities is not affected by the recoveries generated by the government’s anti-fraud activities. The author also suggests that the dramatic increase in recoveries since the False Claims Act was amended in 1986 results from a “leverage mismatch” that the government possesses based upon its ability to exclude a health care provider from participation in Medicare and Medicaid if the provider is found liable at trial for False Claims Act penalties and damages. This view reflects a misunderstanding of the OIG’s exclusion authorities. While it is true that an individual or entity that is criminally convicted of a health care-related offense is subject to a statutorily prescribed period of exclusion, a finding of civil fraud liability does not automatically trigger exclusion from the federal health care programs. If the OIG exercises its discretion to pursue exclusion in such a civil case, the health care provider is entitled to contest the proposed exclusion in an administrative hearing, and an adverse judgment is subject to judicial review. As an alternative, the provider can agree to adopt a program of internal controls and other measures that promote compliance with program requirements. This alternative allows the company to continue participating in the federal health care programs while safeguarding the Medicare program and its beneficiaries. Finally, the author’s thesis that the government prevails not on the strength of the False Claims Act case but based on its ability to exclude corporations does not find support in two of the cases he cites. (The third case, involving a Tenet Corp. hospital and its chief executive officer, initially resulted in a mistrial and is being retried.) In both the HCA Inc. and TAP Pharmaceutical Products Inc. cases, the companies negotiated the settlement of a number of False Claims Act claims in lieu of civil litigation. By contrast, the government criminally prosecuted individual executives of those companies. Obviously, in a criminal case, the government is subject to a higher standard of proof, as well as the inherent challenge of prosecuting company employees for conduct that benefited the company. It does not follow that an acquittal of individuals on criminal charges means that the government would not prevail in a civil action against their employer. Lewis Morris Washington The writer is chief counsel to the inspector general of the Department of Health and Human Services.

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