Marcella Auerbach

Explaining Medicare fraud on television in July 2009, Marcella Auerbach offered a hypothetical patient with a cough or cold. The doctor spent ten minutes with the patient, who then went home. The bill, in her example, told a different story: severe bronchitis, an hour-long visit, and a nebulizer.

She also made an argument for the investigators and prosecutors who could examine such claims. Speaking about the federal enforcement efforts then underway, she put their return at fifteen dollars for every dollar spent. The interview aired on Nightly Business Report on July 29, 2009.

Before representing whistleblowers in private practice, Auerbach had spent more than twenty-five years at the Justice Department. In South Florida she served as a Special Attorney in the Organized Crime and Racketeering Section, Chief of Narcotics, Special Counsel to the United States Attorney, and First Assistant United States Attorney. In the last role, she managed 210 lawyers across the Southern District of Florida’s criminal and civil divisions. She received the department’s John Marshall Award for litigation, one of its principal attorney honors, and was named Law Enforcement Woman of the Year.

Eight years in the Civil Division brought her into health-care-fraud qui tam cases as counsel for the United States. She evaluated whistleblower evidence, determined what an investigation needed, and learned how the government chose cases for intervention. Her preparation included an undergraduate degree from the University of Miami, where she belonged to several honor societies, a law degree from Samford University’s Cumberland School of Law, and an LL.M. from New York University.

Auerbach has lectured at the Justice Department’s Advocacy Institute and the University of Miami’s law school. She serves on advisory boards for Cumberland School of Law and Bloomberg BNA’s Health Care Fraud Report. In 2020, she chaired the Hospitals and TeleMedicare Fraud subcommittee of the Taxpayers Against Fraud Education Fund’s COVID-19 Anti-Fraud Task Force, helping organize the whistleblower bar’s response to fraud as pandemic relief expanded public spending.

Taking the Other Chair

Auerbach joined Nolan, Auerbach & White as a partner and now serves as managing partner of the Fort Lauderdale firm, which devotes its practice exclusively to health-care whistleblower cases. Prospective clients speak directly with her or Ken Nolan. Before accepting a matter, the firm considers the alleged fraud, the company involved, the client’s position, and whether pursuing the case would serve the client as well as justify the investigation.

Her screening work connects a company’s complicated history to a claim the government can investigate. That requires distinguishing a regulatory lapse from fraud, identifying documents that corroborate the client, and assessing whether the alleged falsehood mattered to a public program’s payment decision. A theory needs evidence; a damages calculation needs a basis that can withstand an economist’s scrutiny. The firm assembles clinical and reimbursement experts, investigators, and additional counsel as the case requires. Government intervention remains selective, and the work of developing the evidence begins before a complaint is filed.

Kathleen Hawkins brought knowledge of how a hospital system reviewed admissions. A nurse and former director of medical management at Catholic Healthcare West, later Dignity Health, she had spent about six years raising concerns within the organization. She believed its admission-review practices allowed patients to be hospitalized without medical necessity. Auerbach and her firm represented her in a suit filed in Northern California that challenged the resulting bills to public health programs.

Five years after the filing, Dignity agreed in October 2014 to pay $37 million. The settlement resolved allegations that thirteen hospitals in California, Nevada, and Arizona billed Medicare and TRICARE for inpatient care that should have been provided on a less costly outpatient basis. The claims included scheduled cardiovascular procedures, certain spinal procedures, and admissions for common diagnoses. Dignity also undertook five years of compliance obligations, including independent review of the accuracy of its claims. Hawkins’s concern about admission decisions had produced both a recovery and a requirement to examine future billing.

Auerbach also represented whistleblowers whose evidence concerned the incentives behind treatment. In the St. Jude Medical matter, the firm’s client was former sales representative Charles Donigian. The company paid $16 million in 2011 to settle allegations that it used post-market studies and a device registry to pay physicians to choose its pacemakers and defibrillators. The government alleged that data collection had become a means of retaining doctors’ business or drawing it away from competitors.

The Odyssey Healthcare matter concerned the level of hospice care billed. Auerbach’s firm represented former executive director Bryan Dingus in one of three whistleblower suits resolved by the company’s $25 million settlement in 2012. The allegations involved claims for continuous home care that was unnecessary or did not meet Medicare requirements. That level of care carried a higher payment than routine hospice services.

What the Drug Company Told the Doctor

In the Allergan Botox litigation, Auerbach represented relators whose case contributed to the company’s $600 million criminal and civil resolution in 2010. Her firm represented two of the whistleblowers across three related suits. Allergan pleaded guilty to misdemeanor misbranding in connection with promoting Botox Therapeutic for unapproved uses. The resolution comprised $375 million in criminal fine and forfeiture and $225 million to settle civil claims, including allegations that the company instructed doctors to use inappropriate diagnosis codes to obtain payment for uncovered uses.

Taxpayers Against Fraud named Auerbach and Nolan its Lawyers of the Year in 2011. Their pharmaceutical work later included Brian Shields, a former Genentech product manager, whose case challenged representations about the lung-cancer drug Tarceva. Genentech and OSI Pharmaceuticals agreed in June 2016 to pay $67 million to resolve allegations that they had misled health-care providers about the drug’s effectiveness for certain patients with non-small cell lung cancer.

The government’s claims concerned patients for whom there was little evidence of benefit unless they had never smoked or had a particular mutation in the epidermal growth factor receptor. Auerbach distinguished Shields’s allegations from earlier cases about marketing drugs for unapproved uses. The disputed evidence concerned what doctors had been told about patients’ chances of survival. In this case, she said, “the manufacturers allegedly marketed their lung cancer drug with knowingly inflated survival data.”