by Author | Mar 5, 2014 | False Claims Act
Outstanding US DOJ Health Care Fraud Statistics for FY 2013:
On February 26, 2014, Attorney General Eric Holder and HHS Secretary Kathleen Sebelius released the annual Health Care Fraud and Abuse Control (HCFAC) Program report. It showed a remarkable recover of $8.10 for every dollar spent on health care-related fraud and abuse enforcement. The Government said this is the highest three-year average return on investment in the 17-year history of the HCFAC Program.
In terms of monies recovered for the US taxpayers, US DOJ claims its health care fraud prevention and enforcement efforts paid off with a record-breaking recovery of $4.3 billion in Fiscal Year (FY) 2013, up from $4.2 billion in FY 2012. The Government boasts that over the last five years, its enforcement efforts have recovered $19.2 billion, up from $9.4 billion over the prior five-year period. Since the inception of the program in1997, the HCFAC Program has returned more than $25.9 billion to the Medicare Trust Funds and treasury. Read more: http://www.justice.gov/usao/flm/press/2014/Feb/20140225_Chun.html
by Author | Mar 5, 2014 | False Claims Act
Interesting array of Qui Tam Settlements for week ending 2/28/2014.
Diagnostic Imaging Group (DIG), a chain of diagnostic imaging centers, and its subsidiary, Doshi Diagnostic Imaging Services agreed to pay $15.5 million to settle charges it billed Medicare for diagnostic tests that were never performed or were not medically necessary, as well as for paying kickbacks to referring physicians. The settlement resolves three separate False Claims Act cases. The three whistleblower will receive $1.5 million, $1.07 million and $209, 250, respectively. Read more: http://www.justice.gov/opa/pr/2014/February/14-civ-200.html
Omnicare, Inc., the nation’s leading provider of pharmaceutical care for seniors and nursing homes, agreed to pay $4.19 million to settle charges it received kickbacks from pharmaceutical giant Amgen Inc. to get Medicaid beneficiaries to switch to the drug Aranesp. The qui tam relator will receive $397,925. Read more: http://www.justice.gov/opa/pr/2014/February/14-civ-216.html
Florida-based Sarasota Pain Associates and its owner Steven Chun, MD, agreed to pay $750,000 for billing Medicare for office visits that never occurred or for higher levels of care than were rendered. The case was brought by two nurses who worked for Dr. Chun. Read more: http://www.justice.gov/usao/flm/press/2014/Feb/20140225_Chun.html
by Author | Feb 22, 2014 | False Claims Act
4th Cir. tosses Qui Tam Complaint alleging the repackaging and sale of contaminated penicillin for failing to adequately plead “a false claim” under the False Claims Act (FCA). While troubled with defendant Omnicare’s lax manufacturing practices, the U.S. Court of Appeals for the Fourth Circuit nevertheless affirmed dismissal of the case because the relator failed to establish that violating an FDA regulation concerning Current Good Manufacturing Practice (CGMP) regulations, in this case, packaging penicillin and non-penicillin drugs within the same facility, did not, in and of itself, also violate the False Claims Act (FCA).
Practice point 1: It is very difficult to make an FCA case where the Government declines to intervene and the affected agency (here HHS) and/or its regulations do not support the case on the “materiality” element. That is, when the relator gets no support from the Government on the assertion that violating the regulation in question would have affected the agency’s reimbursement decisions.
Practice point 2: One silver lining to this decision is that the Fourth Circuit court continues to adhere to a commonsensical interpretation of the phrase “based upon” in the public disclosure bar, 31 U.S.C. § 3730(4)(e). Unlike most other jurisdiction, the court views “based upon” to mean that the relator actually “based” his allegations “upon” a public disclosure, rather than, to mean the allegations are “substantially similar to” the publicly disclosed information regardless of whether such information ever factored into the formation of the relator’s allegations.
The case is captioned: United States ex rel. Barry Rostholder v. Omnicare, Inc., No. 12-2431, (4th Cir. Feb. 21, 2014).
by Author | Feb 21, 2014 | False Claims Act
Ten Step Guide to Whistleblowing. By successful whistleblower Adam Resnick.
1. Shut up and get a good lawyer, fast. You can complain about the fraud internally, but we all know how that usually ends. Once you identify a fraud, immediately contact a lawyer to ask for guidance, including what documents and corroborating evidence that you can take with you. Do NOT ever take originals. You don’t want the real crooks to flex their muscle and convince authorities that your “theft” should negate their fraud. It’s also possible that as soon as you start thinking about the impropriety, people at the company know who you are. That means you could be escorted out of the building before you can grab your kids’ pictures off your desk.
2. Make sure you have a case. FCA, IRS and SEC cases are not based on rumor or hunches, but evidence. You have to prove fraud and the government is not paying awards for generalized tips, but for specific evidence. You are supposed to be doing the government’s work for it. Don’t assume that you will be able to prove your case by having your lawyer or the government subpoena documents from the defendant after the case is filed. Think about what you personally know right now. As the great philosopher Tommy Boy said, “I can get a good look at a T-bone by sticking my head up a bull’s ass, but I’d rather take a butcher’s word for it.” The government wants the butcher, but come prepared with meat in hand.
3. Welcome hard questions and difficult truths. Don’t blame a lawyer for questioning your case – convince them it has the necessary merit. If you have found a good lawyer and you can’t convince them, then maybe you don’t have a case. My first (successful) case involved a novel theory – fraud that was obvious to me but not something that the Department of Justice had pursued before. My attorneys dug deep into the facts of my case and did a lot of legal research before they felt comfortable it was viable. Initial skepticism can save years of wasted time if the facts and/or law don’t work in your favor.
4. Get an honest lawyer who’s had some success in the whistleblower arena. Before divulging any specific details to a prospective lawyer, make sure they run a conflict’s check first to ensure they don’t have an ulterior agenda. For example, they could already represent a client that has a similar case and could be trying to suck information out of you. If a lawyer purports to have recovered billions of dollars in whistleblower claims, ask them how much their relators’ shares have been. There are some great lawyers who represent whistleblowers, including some who are less well known but nonetheless very capable. Asking other whistleblowers who they recommend and then talking to the lawyers is always a good way to approach a potential attorney-client relationship. The key, however, is to find an attorney with good judgment quickly.
Also, don’t pay someone an hourly fee to represent you on a whistleblower case (unless they are only representing you in an employment case). The real whistleblower lawyers all work on a contingency fee basis — meaning you pay nothing unless you win. The only lawyers I ever heard of who charge an hourly rate are ones who don’t know what they are doing — or ones who think you don’t have a case but are happy to take your money.
5. Prepare for the long haul. Most defendants don’t settle easily, and they never fear press as much as you think they will. Many lawyers have told me that every whistleblower they talk to says “the company will settle this quickly to avoid the press.” They never do.
6. Be prepared to be “outed.” If any lawyer tells you that your anonymity is guaranteed, seek another counsel. Whistleblower cases are filed under seal, and there are ways to potentially mitigate the risk of being revealed as a whistleblower, like filing a case under the name of an LLC, but anonymity can never be assured. Once a district court clerk inadvertently lifted a seal in my case for ten hours and my co-relator and I were exposed. It shouldn’t have happened but it did. And similar things have happened to others. Once you file your case, you should assume you will get outed eventually. Stock up on Imodium.
7. Get another job. Cases, like anything in life, have ebbs and flows. Working while your case is on-going keeps you sane, stable, and protects your family’s welfare in the event your case crumbles. Cases can take years from start to finish. Sitting around waiting for a recovery can be counter-productive. And, sadly, if and when you are revealed as a whistleblower, it will make finding a new job harder, not easier.
8. Plan for success. At the point at which you sense your case might be successful (for instance, the government intervenes), contact an estate planner so you don’t end up like so many lottery winners. Of course, a whistleblower is the antithesis of a lottery winner. You must possess a tremendous work ethic, courage, and perseverance. Do your due diligence and find a great estate attorney and money manager so that success will last.
7. Don’t count your eggs before they hatch. The big print giveth, and the little print taketh away. Never assume your case will settle for the maximum amount. In a Medicaid case, assume you will not get any award for 25 percent of the case and that some portion of penalties will be allocated to criminal sanctions for which you will not get a share. Assume you are not the only relator — there could be other whistleblowers who you will come to learn are going to split the award. And don’t think the gross penalty is your share. You have to pay lawyers’ fees and taxes still.
8. Find a friend. There is nobody better to meet who will understand your circumstance more than another whistleblower. They will have empathy and be able to give you guidance. I have had several contact me before they even decided to approach an attorney. It’s a lonely line of work because the court mandated seal requires that the only people you can discuss your case with are your lawyers.
9. Be grateful. This will not be easy, because at the end of the day, the liars, cheats and thieves who stole from the American people and got you fired will probably keep their jobs, receive bonuses, and may even get promoted. Anger and resentment are termites for the soul, however. Gratitude is the cure, and it is something you need to cultivate. If you cannot find gratitude, find help.
10. Pay it forward. There are other whistleblowers behind you, and they need the law that helped you in your hour of need. That law is under constant attack by powerful and well-funded pack lobbyists and lawyers. Support groups like Taxpayers Against Fraud that seek to ensure that whistleblowers are both protected and compensated
Published at: http://www.huffingtonpost.com/adam-resnick/a-10-step-guide-to-whistl_b_4810485.html
by Author | Feb 21, 2014 | False Claims Act
$192.7 million settlement in an Off-label Marketing Fraud case brought by whistleblowers against a major pharmaceutical company under the qui tam provisions of the False Claims Act, was announced by the US DOJ on February 21, 2014. Endo Health Solutions Inc. and its subsidiary Endo Pharmaceuticals Inc. (Endo) have agreed to pay $192.7 million to resolve both criminal and civil liability arising from their off-label marketing practices. Endo Pharmaceuticals Inc. has also agreed to implement and maintain a number of enhanced compliance measures.
The drug at issue in the case is Lidoderm, which was approved by the FDA for only the relief of pain associated with post-herpetic neuralgia (PHN), a complication of shingles. The False Claims Act complaint charges that during the period of 2002 to 2006, Endo Pharmaceuticals marketed Lidoderm for the treatment of non-PHN related pain, including low back pain, diabetic neuropathy and carpal tunnel syndrome.
Off-label marketing cases are usually challenging cases to make because the relator has to first show that the FDA’s marketing rules were violated and then must show that in doing so the pharmaceutical company violated the False Clams Act. Typically, proof of something more the just off-label marketing is required to help such cases succeed for whistleblowers.
Read More: http://www.justice.gov/opa/pr/2014/February/14-civ-187.html
by Author | Feb 21, 2014 | False Claims Act
Tenn. Atty Gen. announced $800,000 settlement on February 20, 2014, resolving Medicaid Upcoding Fraud against Chattanooga-based mental health facility AIM Center Inc. In addition to paying $800,000 to Tennessee’s Medicaid Program, AIM Center Inc. is to enter into a five-year corporate integrity agreement (CIA) with the U.S. Department of Health and Human Services Office of Inspector General to make sure it stays compliant with federal healthcare benefit program requirements.
The principal allegation against Aim Center Inc. is that it overcharged Medicaid by submitting claims for psychosocial rehabilitation services that were more lengthy and expensive than the services actually provided.
This appears to be a case where the government also relied on the provision in the False Claims Act that penalizes healthcare providers for not returning overpayments, 31 U.S.C. § 3729(a)(1)(G), in this instance as a result of double filling.
Read More: http://legalnewsline.com/news/247359-chattanooga-mental-health-facility-resolves-false-claims-act-allegations
by Author | Feb 20, 2014 | False Claims Act
Qui Tam Whistleblower rewarded $1.28 million in a successful False Claims Act (FCA) case charging Defense Contracting Fraud that was settled by the Department of Justice on February 18, 2014, with IT firm Vector Planning and Services Inc. (VPSI), of Chantilly, Va., agreeing to pay $6.5 million to the government. The settlement resolves whistleblower allegations that VSPI inflated claims for payments under several contracts with the Navy, in violation of the FCA. Specifically, the complaint charged VPSI with overcharging the Navy for indirect costs.
The case is captioned United States ex rel. Hai Ba Trung v. Vector Planning and Services Inc., et al., 3:12-cv-02353-LAB-BGS (S.D. Calif.). Since the case was filed in 2012, this early 2014 settlement represents a fairly quick resolution by FCA standards.
Read more here: http://www.justice.gov/opa/pr/2014/February/14-civ-167.html
by Author | Feb 20, 2014 | False Claims Act
A former employee of EndoGastric Solutions stands to receive up $945,000 from a successful qui tam False Claims Act case charging durable medical equipment fraud (DME Fraud) that was settled by the Department of Justice on February 19, 2014, with EndoGastric Solutions agreeing to pay $5.25 million to the government. The settlement resolves whistleblower allegations that EndoGastric caused prescribing physicians to submit up-coded bills to Medicare and also that the DME Manufacturer paid kickbacks to healthcare providers to induce sales, in violation of the Federal Anti-Kickback Statute.
It is good to see the government continuing to pursue violations of the Anti-Kickback Statute (AKBS). That has not always been the case.
Read more here: http://www.justice.gov/opa/pr/2014/February/14-civ-173.html
by Author | Feb 15, 2014 | False Claims Act
This ruling by a federal appellate court involves their interpretation of the Alternate Remedy provision in the False Claims Act, 31 U.S.C. § 3730(c)(5). In a case of first impression, the United States Court of Appeals for the Fifth Circuit denied two relators, who had alerted the government to a multi-million Medicare and Medicaid fraud scheme, any reward for disclosing their information to the authorities because they had waited to file their whistleblower lawsuit until after the government had already indicted the defendants, rather than filing it before the criminal proceedings had begun. With the relators’ information and agreement to testify at trial, the government was able to secure guilty pleas from the defendants on fraud charges, as well as, a $43 million award for criminal restitution. Still, because they filed their qui tam complaint too late, the relators received no financial compensation.
Although the three judges were unanimous in ruling against the two relators, one of the judges wrote a concurring opinion which stated that, while the court’s conclusion was the correct one, the result was “arguably inequitable and illogical.”
The case is captioned United States of America, ex rel. Samuel Babalola; Kayode Samuel Adetunmbi v. Arun Sharma, doing business as Allergy Asthma Arthritis & Pain Center; Kiran Sharma, doing business as Allergy Asthma Arthritis & Pain Center, 2014 U.S. App. LEXIS 2823 (5th Cir. Feb 14, 2014).
by Author | Feb 14, 2014 | False Claims Act
Settlement announced in Defense Contracting Fraud false claims act qui tam case. Virginia-based defense contractor MPRI Inc. has agreed to pay $3.2 million to resolve allegations that it submitted false labor charges on a contract to support the Army in Afghanistan, the Justice Department announced on February 12, 2014. The government had alleged MPRI billed for employees who had not worked because they had been granted leave and were out of the country.
Under its contract with the Army, MPRI was supposed to provide support to the Army in its efforts to re-design and build from scratch a new Afghan Defense Sector that would establish an Afghan national security system suitable for a modern Western military, according to the government.
The qui tam whistleblower reportedly will receive $576,000 as his share of the settlement amount.
Read more: http://www.justice.gov/opa/pr/2014/February/14-civ-155.html
