(212) 292-4573 tmcinnis@mcinnis-law.com

Healthcare Provider False Claims Act Violation

by | Jul 13, 2018 | Our Cases

NEW YORK, July 10, 2018

McInnis Law announces the resolution
of three whistleblower lawsuits against Health Quest Systems, Inc., a hospital
system and network of healthcare providers headquartered in Lagrangeville, NY.

According to settlement agreements released on July 9, 2018, Health Quest will
pay the US $14.7 million and New York $880,000 to resolve allegations that it
violated the federal and state False Claims Acts by submitting inflated and
otherwise ineligible claims for Medicare and Medicaid reimbursement payments.
The settlements stem from three separate qui tam whistleblower lawsuits filed in
the federal district court in the Albany. They are: US, ex rel. F. v. Health Quest
Systems, Inc., No. 1:15-cv-396; US, ex rel. Cleary v. Health Quest Systems, Inc., No. 16-
cv-76; and US, ex rel. Betaudier and Carroll v. Health Quest Medical, Practice, P.C.,
et al., No. 1:16-cv-1344.

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The settlements cover allegations, which Health Quest admitted, that:
From April 1, 2009 through June 23, 2015, Health Quest submitted claims
for evaluation and management services but did not sufficiently document
the services and billed two levels higher than supported by the medical
records.
From April 1, 2011 through August 2014, Health Quest submitted claims for
home health services that lacked sufficient medical records to support the
claim, including documentation of a face-to-face encounter with a
physician.


From March 1, 2014 through December 31, 2014, Health Quest subsidiary
hospital, PHC, submitted allegedly false claims for inpatient and outpatient
services referred to PHC by two orthopedic physicians, in alleged violation
of the Physician Self-Referral Law and in violation of the Anti-Kickback
Statute.


McInnis Law represented whistleblower G. F., who filed the first of the three
whistleblower lawsuits against Health Quest. G. F. will immediately receive
$967,651, representing 15% of the total recovered from his case by the US and
New York. He has reserved the right to seek up to 25% of the proceeds he helped
recover, according to his attorney Timothy J. McInnis, of NYC-based McInnis Law.
“This case is remarkable because three unrelated whistleblowers filed separate
lawsuits using different lawyers and alleging different violations against the same
hospital system,” McInnis observed. “It really shows that the whistleblower


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procedures are working well, but it also shows something is grossly amiss with
some hospitals and healthcare providers,” noted McInnis.
CONTACT: Timothy J. McInnis, Esq., 1-212-292-4573, tmcinnis@mcinnis-law.com
SOURCE McInnis Law

My Pillow Inc. settlement

by | Mar 6, 2013 | Our Cases

Aug. 15, 2016 Following the recent unsealing of their lawsuit, whistleblower attorneys Stephen B. Diamond of Chicago’s Stephen B. Diamond, P.C. and Timothy J. McInnis of NYC’s McInnis Law announce a $1.109 million settlement of a qui tam lawsuit against My Pillow, Inc. in State of New York ex rel. Stephen B. Diamond, P.C. v. My Pillow, Inc., 100337/14 (Sup Ct, NY County). The settlement resolves allegations that My Pillow, a Minnesota company, knowingly failed to collect and remit New York use taxes on Internet and telephone sales to New York customers, thereby violating the New York False Claims Act, N.Y. Fin. Law § 187. This is the first New York False Claims Act settlement for unpaid taxes on Internet and telephone sales since the Act was amended in 2010 to explicitly include tax claims.

This action followed on the heels of Relator Stephen B. Diamond, P.C.’s 2012 investigation of My Pillow in Illinois, which revealed My Pillow sold merchandise at craft shows and through the Internet and telephone to New York customers. My Pillow also broadcast infomercials to New York residents. In July, 2016, the New York State Attorney General and Relator, Stephen B. Diamond, P.C. entered into a settlement agreement with My Pillow requiring My Pillow to pay $1.109 million in lost taxes and penalties for 2011-2015 and also collect and remit use taxes on all future Internet and telephone sales to New York customers.

In bringing this case as the whistleblower, Stephen B. Diamond, P.C. pointed out “Actions for unpaid taxes pursuant to the False Claims Act give the State a means to recover substantial amounts of lost revenue, including treble damages and penalties.” Attorney McInnis noted that, “New York is one of only a few states that have false claims acts ‘with qui tam provisions’ permitting private individuals to sue state sales and income tax fraud evaders on behalf of the government. Illinois is another such state. Typically a whistleblower can receive between 15% and 30% of recovered funds if the suit is successful.” In this case, under the settlement agreement Stephen Diamond, P.C. received $221,000 (20%), plus the right to seek reasonable statutory fees, which have not yet been determined.

SOURCE McInnis Law