Biotech Whistleblower Case Settles for Approximately $2 million – Unnecessary Services

Biotech Whistleblower Case Settles for Approximately $2 million – Unnecessary Services

GenomeDx Biosciences, a biotechnology company in San Diego, has settled allegations that it improperly billed Medicare and private insurance companies for unapproved genomic testing. As part of the settlement, GenomeDx will pay $1.99 million to the United States. The two whistleblowers who were represented will together receive almost $350 thousand as a whistleblower award (before fees).  

The case was filed under the federal False Claims Act by Whistleblower Law Firm Brown, LLC, a firm led by former FBI Special Agent Jason T. Brown. Attorney Brown commended the hard work his team and the government put in, noting the work of Assistant United States Attorney Joseph Price of the San Diego Division, Doug Rosenthal from Main Justice, and others from the DOJ and US Attorney’s office who worked on the case. Internally, whistleblower lawyers Jason T. Brown, Benjamin Lin and Patrick Almonrode, and staff member Angiee Rosario, contributed to the result, as well as other staff members at the firm.

Whistleblowers are the linchpin of the False Claims Act. Courageous individuals who blow the whistle on fraud stand to benefit, but more importantly help hold accountable institutions and individuals whose fraud make medical care more expensive for all.  

The case against GenomeDx focused on their billing for a genetic test for prostate cancer. The complaint alleged that the company conducted and billed Medicare for unnecessary test, including even tests performed on tissues of people who had already unfortunately passed on.  

“The Department of Justice is committed to ensuring that Medicare reimburses costs for laboratory testing that are reasonable and necessary for the individual patient,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division, in a separate press release. “Medically unnecessary and unproven testing increases costs for federal health care programs.”

 “The message is clear, if you take advantage of programs like Medicare, you will be held accountable,” said John Brown, FBI Special Agent in Charge of the San Diego Field Office.

Jason T. Brown encouraged other individuals who know of Medicare Fraud, Medicaid Fraud, or Insurance Fraud to contact his office to speak with his whistleblower team. According to Brown, “It’s estimated that 10% or more of health care costs are due to fraud, and the more courageous individuals that come forward, the better it is for everyone.” The case is at No. 17-CV-1959 (S.D. Cal.) The Department of Justice press release may be found here: https://www.justice.gov/opa/pr/genetic-testing-company-agrees-pay-199-million-resolve-allegations-false-claims-medicare the claims resolved by the settlement are allegations only, and there has been no determination of liability.

The False Claims Act – An Aggressive Tool to Combat the Opioid Crisis

Two things have taken a toll on our overburdened healthcare system in recent years: Medicare Fraud and the Opioid Epidemic.  The False Claims Act (FCA) may serve as an antidote to both. 

Conceptually, the FCA is a tool that can be used to address the over prescription of opioids since inherently over prescription means it is unneeded and thereby fits squarely into the False Claims fabric to litigate and eliminate unneeded services.  The Federal Government has jurisdiction when the prescription of opioids leaps into the Medicare & Medicaid world then the taxpayers have been defrauded by paying for things that are worse than unneeded as they create a cycle of dependence for the user, and a cycle of billing for the medical provider.

The United States Department of Justice took a super-aggressive step with the their ironically named Prescription Interdiction & Litigation (“PIL”) Task Force, by filing a complaint under seal pursuant to the FCA against pharmacies for allegedly violating the Controlled Substances Act and the False Claims Act.  The violations allegedly are so perverse that at least two people have died as a result of these over prescriptions emanating from these facilities.

But the DOJ and the PIL team went further then usual and also asked for emergent injunctive relief to prevent the Defendants from prescribing any further opiates.  The Court signing off on this pushes the envelope a bit arguably, since the Defendant is not even given notice of the restraining order until after it’s served with it, since the motion to obtain one was under seal and thus, the Defendant did not have an opportunity to challenge the validity of this request.  Presumably, after being served with it, they would have some remedy to address it, albeit if the Defendant is guilty of all the items complained of, they will be hard pressed to upend such an order.

A casual review of the docket does not reveal whether there’s an opioid whistleblower, but under the Federal False Claims Act a whistleblower stands to receive up to 30% of what the government’s economic recovery is in the fraud as whistleblower award for revelations regarding the over prescription of opioids under the Medicare program or Medicaid Program.   Similarly, the State of California has the California Insurance Claims Fraud Prevention Act which may permit up to 50% of the governments recovery for a California state whistleblower laws or under the State of Illinois, Illinois Insurance Claims Fraud Prevention Act the Illinois whistleblower can receive up to 40% of the amount recovered.  While the False Claims Act addressed the federal programs, California and Illinois state allow a whistleblower to bring an action to recoup for private insurance.

Opioid whistleblowers can come in different shapes and fashions.  Generally, a whistleblower is thought of as an insider, and the strongest cases are brought by people from within the scheme since they may have the detailed information needed to properly file the False Claims Act lawsuit.  However, there’s all sorts of scams that are run with opioid drug pushing that include the use of illegal runners, and even the unfortunate drug dependent user may be eligible to file an action if he or she knows enough of the plan. 

If you have information regarding the illegal prescription of opioids or the over-prescription of opioids, you should call our whistleblower law firm at (877) 561-0000 to discuss what your rights are. With the Federal Government aggressively tackling this problem, if you are on the inside and you’re not part of the solution the government may think you’re part of the problem, so the sooner you call, the sooner you can educate yourself about your rights. We offer free whistleblower consultations and can advice you confidentially of your options.

Why Potential Whistleblowers Should Speak with A Lawyer Right Away

Big companies bury themselves with accountants and lawyers to defend and justify their conduct, so if you’re in the midst of a fraudulent scheme, you need to speak with a whistleblower lawyer as soon as possible to understand your rights and make sure you don’t become the scapegoat for the conduct.

Whistleblowers are protected through various programs and statutes, but only if they are navigated properly. There’s an SEC Whistleblower Program to report when companies who are subject to SEC regulations are corrupt and with an SEC whistleblower lawyer you can potentially remain anonymous from start to finish.  Similarly, with commodities, the CFTC whistleblower program which had a record year with hundreds of millions of dollars of recoveries has mechanisms to protect the whistleblower.  There’s also the IRS whistleblower program which requires a very detailed and specific case designed to catch tax cheats who did over $2 million of fraud, but generally much more.  Also, many states have their own respective whistleblower programs with states like the California Whistleblower Laws and Illinois Whistleblower Laws allowing one to bring a case when private insurance companies are defrauded and New York Whistleblower Laws having teeth to combat tax cheats.

However, by far the most expansive use of whistleblower protections and recoveries comes from the False Claims Act (FCA), which has had billions upon billions of recoveries year after year.  People who speak with False Claims Act attorneys must have cases in which the government is defrauded. Generally, the most abuse is found with Medicare Fraud and Medicaid Fraud and it can be elegant with structuring where certain locations of facilities are and whether they’re on campus or off campus, timing of submissions of claims or altering locations of claims to ensure larger recoveries, upcoding in many different ways such as the billing a higher code for more Medicare reimbursement and false diagnosis.  In some egregious cases, not only do health care providers bill for services not rendered, but even worse they bill for services rendered but not needed!  Imagine being subjected to an unnecessary surgery just so the doctor can receive a bonus or make a yacht payment.  Also popular are illegal kickbacks in which the medical provider pays for Medicare or Medicaid patients and Stark Act issues where the medical provider restricts the patient’s choices and compels them to go to a pharmacist or facility such as physical therapy where the provider has an undisclosed interest.

Whistleblowers should do the right thing and candidly discuss with their whistleblower lawyer the facts of their case to see what type of rights you have.  The longer you silently sit by while you witness the Medicare Fraud or Medicaid Fraud, the more compromised you are.  Don’t fall for calling their whistleblower hotline which is oftentimes a hotline that will lead to the whistleblower’s firing.  Once you become aware of the fraud or once you’ve decided you want to do something about it you should speak with a professional who focuses their practice on whistleblower rights.   In the medical field, you wouldn’t expect to show up to work without any training and know how to perform surgery, similarly the right whistleblower law firm will have the right tools and advise to counsel you about how to perform the qui tam operation to allow the greatest chance of success.

With success there is also a tremendous possible upside. With billions recovered last year alone, whistleblower awards could amount to up to 30% of the recovery, which means last year courageous individuals received hundreds of millions of dollars for doing the right thing.

If you know of Medicare Fraud, Medicaid Fraud or many other types of fraud,  the company already has a head start on covering it up, you need to speak with a whistleblower lawyer like former FBI Special Agent Jason T. Brown of Brown, LLC, who can educate you about your rights and help navigate the best path to success.

Making Millions in Malaysia, Must the Money be Metered?

Goldman Sachs was a leading wealth investor in Malaysia until just a few years ago before migrating out of the country, evidently with a lot of money, if you believe Malaysia. Investigations by the new finance minister of Malaysia now suggests that Goldman Sachs might have been involved in illicit activities while it was raking in money during its presence in the country, and the government is now demanding that Goldman Sachs pay up for the “scheme” that they were seemingly implementing.  With the globalization of financial whistleblower cases, issues that have a United States nexus may be able to be litigated either under an SEC Whistleblower framework, Customs fraud or sometimes under the False Claims Act (FCA) itself as classical qui tam lawsuits.

Malaysian Government Demands Reimbursement from Goldman Sachs

Earlier this year, Lim Guan Eng, the new finance minister of Malaysia, announced that the local government is now seeking reimbursement from Goldman Sachs after they were found to have possibly been conducting an illicit scheme within the country.

Recently, a governmental scandal has unfolded within the Malaysian region, after billions of dollars disappeared with no apparent evidence where the funds went. No, this wasn’t a cryptocurrency pump and dump scheme, it was believed by Malaysia to be tied in with Goldman Sachs.  The scandal caused the Malaysian government to suffer a significant loss and become larger in debt, which had a significantly adverse effect on the country’s local economy.

After researching the loss, the new finance minister of Malaysia, Lim Guan Eng, mentioned that they have been investigating the activities of financial powerhouse Goldman Sachs, who was a leading investor in the area. The investigation found evidence that the company might have been implementing illicit actions during their time in Malaysia, and some of these actions could potentially be linked to the current debt that the country finds themselves in. Several connections between the actions of Goldman Sachs and the recent scandal in the country has also been noted, according to Lim Guan Eng.   Allegations however, are merely allegations, and the more definitive allegations of what the conduct was have yet to emerge.

While no definite statements have been published yet, the government is seeking reimbursement from Goldman Sachs in order to recover from the economic damage sthat they had suffered through the actions that they believe were caused by Goldman Sachs.

Several parties have already been interviewed in order to gain more insight into the matter, but parties have thus far denied their knowledge of any illicit activities. The bank that was used by Goldman Sachs made several millions of dollars from the transactions performed by the company, but also advised several media publications that they had no knowledge of any particular illicit activity by the client.

Conclusion

Goldman Sachs made millions, if not billions, of dollars in Malaysia, and recent investigations have led to allegations against Goldman Sachs in which Malaysia is demanding compensation. Is this another example of corporate corruption or perhaps government mismanagement or both?  It’s too early to tell.  Perhaps this is an example of violations of the FCPA Foreign Corrupt Practice Act that could dovetail into an SEC whistleblower complaint or perhaps it’s something else.  Individuals with information about the events are encouraged to call a whistleblower law firm to share their information to see if it’s actionable.

New York Catches Tax Cheats under its Tax Fraud Whistleblower Provisions

Whistleblower laws have wide range of powers and affects, but one of the most potent is New York’s Qui Tam provisions which enable an insider to turn in tax cheats and receive a whistleblower award.

Many Qui tam lawsuits are filed under the False Claims Act provide a way for the government to retrieve funds that they have been cheated of. These cases are usually filed by employees who work at a company that is conducting healthcare fraud, like Medicare Fraud or Medicaid Fraud. When the employee notices such activity, they can get in touch with a whistleblower lawyer to file an official report and initiate a secretive lawsuit against the employer. Different types of qui tam cases can be filed, and recent developments in New York are setting an example of how tax-related whistleblower lawsuits can be beneficial for the state government and to the whistleblower.  There are also IRS Whistleblower actions, but those cases must be incredibly detailed and show over $2 million in fraud (underpayments or no payments) and generally significantly higher amounts.

Tax Fraud Whistleblower Cases In New York

New York State is one of the few states in the country that provides appropriate laws that ensure citizens in the state can file for a qui tam case if they know of tax fraud. When such a case is filed with a tax fraud attorney, state authorities are notified of the case and given the opportunity to intervene before the case becomes public.

The False Claims Act laws in New York State was modified in 2010 to allow the citizens to come forward with information that suggests different types of tax-related fraudulent activities are being conducted at their employer. Additionally, the law also ensures that the individual who blows the whistle is appropriately awarded for the fact that they filed the qui tam lawsuit. The reward provided to the whistleblower is granted only after the state has recovered the lost funds from the accused party. Rewards provided to the whistleblower for tax fraud qui tam generally range from 15% to 30% of the amount that the state recovers.

Since the initiation of these laws in the New York State, the government has already been able to retrieve over $56 million in lost funds thanks to whistleblowers speaking up about fraudulent activity that is conducted oftentimes by their employers.     Some common schemes employers use to cheat on taxes is paying workers off the books, falsely designating workers as independent contractors instead of employees and outright not reporting income.

The state is setting an example for other states, as very few states currently have such laws implemented. Others states in the country are advised to consider looking at how New York has already benefited and in turn recouping money from tax cheats helps everyone with their taxes.

Conclusion

When tax fraud is detected, it is important to report the New York Tax Fraud the relevant authorities in the right manner utilizing a tax whistleblower lawyer. Citizens of the New York State are able to file qui tam cases under the False Claims Act, which then allows the whistleblower who filed the case to receive a reward if the case turns out to be successful. Contacting an experienced whistleblower attorney can ensure you have the foundation for at a case that may succeed, such as speaking with former FBI Special Agent and whistleblower lawyer Jason T. Brown of Brown, LLC.

$260+ Million Settlement False Claims Act (FCA) False Billing Whistleblower Case

Health Management Associates plead guilty to false billing as well as other violations of the False Claims Act as a result of a whistleblower action that was commenced looking into its billing practices. The hospital chain that has facilities throughout the United States was pressuring physicians into admitting patients to their hospitals, even when outpatient services would have been adequate to provide treatment to the patient. Physicians were incentivized for complying with the requests made by the management staff at HMA. After a full investigation, which started in 2013, the hospital chain agreed to pay a settlement fee of more than $260 million.

Whistleblower Case Against Health Management Associates

On the 25th of September 2018, the U.S. Department of Justice issued a press release stating that Health Management Associates was found guilty and agreed to pay a settlement fee that reached over $260 million in total.

The settlement was agreed by the major hospital chain after a whistleblower case was filed against them by two former employees. The whistleblower case accused HMA of defrauding the government by false billing. False billing allegations are core to actions under the False Claims Act and inherently involve allegations of Medicare Fraud and/or Medicaid Fraud.

The investigation found that the company had enforced rules that awarded physicians for admitting patients who came to the emergency room when an outpatient treatment would have been sufficient. Physicians did explain that they were forced into these actions by the management of HMA. This type of practice is comparable to upcoding, since billing for the in patient treatment generated significantly greater amounts of revenue for the hospitals and a burden to the taxpayers.

According to whistleblower attorney Jason T. Brown, “This is an excellent qui tam settlement as a case this extensive its challenging to show the individualized course of treatment did not warrant hospitalization especially when Doctors should err on the side of caution when patient health is at issue.  However, when a medical institution makes it a pattern and practice to admit patients upon self-reporting of issues that ostensibly don’t require hospitalization it does a disservice to everyone including the patient and the taxpayer who foots the bill for Medicare Fraud.  Great work by the government, the law firms involved, and to the courage of the whistleblowers who blew the whistle on this unlawful practice.”

Not only will the two employees who came forward be showered with praise for doing the right thing, but under the settlement mechanism of the False Claims Act, they will receive a whistleblower award of approximately $27 million dollars, no small sum for doing the right thing.  While the FCA calls for awards up to 30% of the sums recovered, it is based on the sums recovered based on the information provided by the whistleblower, also known as the relator, so it’s critical to articulate the case in a prompt and correct manner.

In addition to admitting patients to the hospital when admission was not necessary in terms of their medical condition, the investigation also discovered that the chain of hospitals overbilled government health care agencies for services that were provided to the patients during their admission.

Governmental health care agencies affected included Medicare and Medicaid, both of which are federally funded.

Conclusion

This is only one example of the many cases related to fraud in the healthcare industry, brought forward by whistleblowers. Employees who blow the whistle and report such fraud play an important part in reducing health care fraud and damage done to the United States governmental health plans, including Medicaid and Medicare. If you have noticed such misconduct in the workplace, it is important to contact an experienced whistleblower attorney, such as former FBI Special Agent Jason T. Brown at Brown, LLC, who can investigate your case and determine if it is worth filing. You may be eligible for a reward of up to 30% the amount claimed in a settlement, should your case be successful.

DEA Investigates Tennessee County for High Number of Opioid Prescriptions

Consistent with the current’s administration directive to try to file more opioid whistleblower lawsuits under the False Claims Act (FCA) and other statutes, the Drug Enforcement Administration (DEA) announced that they had initiated an official investigation into a high rate of prescription opioids being ordered by pharmacies in a certain Tennessee County. According to data collected by the DEA, painkiller prescriptions in the county reached a level that would provide every person in the county, including children, a total of 270 tablets during the year 2017. That may be a heckuva party for some, but one needs to see the wake of broken lives in the hangover.

Tennessee County Under Investigation

Clay County, forming part of the Tennessee County, is a very small area with only one single city, known as Celina. The county has a population of only 7,800 citizens. Celina is home to only four pharmacies in total, as well as a couple of churches, a few diners, and a number of antique shops. Everything in this rustic town echoes shadows of the past where it really is located in walking distance.

What triggered an investigation by the Drug Enforcement Administration is the fact that 1.5 million painkillers were purchased in 2017 by the four pharmacies that are found in Celina. According to the DEA investigators, this is an alarmingly high number of prescription painkillers purchased by the four pharmacies, especially considering the fact that the population of the city is so low. After some calculation, they found that the 1.5 million prescription pills would equal 270 pills for every single person who is part of the city – including the youth and children.

Anderson Hometown Pharmacy was investigated on the 27th of August. The other pharmacies that are part of the city are also being investigated at the moment, as well as the doctors in town that are prescribing these drugs to patients.

The owner of the pharmacy explained to federal agents who led the investigation that the aging population and workforce of the town was what led to the increased need for pain medication. This, however, still doesn’t explain why 1.5 million prescription-level painkillers were bought in just one year.

Further investigations are still ongoing to help federal agents find more information in regards to the case and to help them point down parties that might be involved in possibly illicit activities.

Conclusion

The investigation that is currently in an ongoing in Tennessee County will continue until the DEA can make a more definite determination on why prescriptions have reached such a high level. Employees at doctors and pharmacies may come forward in the meantime and blow the whistle, which would allow the DEA to obtain data on why prescription numbers are so high. If you find yourself in a situation where a doctor, specialist, or a pharmacy you are employed at conducts itself  in an unlawful manner, you should get in touch with  whistleblower lawyer such as Jason T. Brown at Brown, LLC, who is a Former FBI Special Agent and whose qui tam law firm is experienced in dealing with whistleblower cases.

$102 Million in Whistleblower Awards Rewarded to Pharmaceutical Whistleblowers

Pfizer, a giant global pharmaceutical company that produces some of the world’s most commonly used drugs, agreed to a settlement amount of $2.3 billion and pled guilty after in a whistleblower case that lasted for six years. After the settlement from Pfizer was finalized, $102 million in whistleblower awards were paid out to the whistleblowers who initiated the case and brought forward the evidence that advanced the case against Pfizer.

Pfizer’s $2.3 Billion Settlement

The majority of whistleblower cases reported under the False Claims Act (FCA) occur within the healthcare industry. Each year hundreds of millions of dollars and sometimes billions, are often recovered by the government after a successful qui tam case. In the history of these cases, the Qui Tam lawsuit filed against Pfizer marked the largest whistleblower settlement to date.

In 2003 six employees at Pfizer, came forward with evidence that suggested the pharmaceutical company was conducting fraud.  It was alleged that the company created an internal culture that suggested the organization’s purpose is to drive sales above all and the promotion of the drugs had to be done in manners that were not necessarily approved by the FDA, otherwise he would not be considered a “team player.”

They were advised to promote a pain medication known as Bextra for purposes other than what it was approved for, which is known as off-label promotion.  Off-label promotion may come in different ways where pharmaceutical sales representatives tell the medical facilities they are distributing the drugs to that the product has many more benefits than listed and tells them to prescribe it to their patients for things that were not approved by the FDA. After refusing to comply with the requests from Pfizer, the lead whistleblower was dismissed from his position and fired from the company.

Strong corroborated evidence of the off-label promotion was provided against Pfizer, which led to a full investigation by the government into the matters reported in the whistleblower lawsuit. The investigation lasted for more than five years. Ultimately, In 2009 Pfizer pled guilty due to the evidence brought forward against the company, as well as findings from an investigation initiated by the government and the lawyer who led to the case.

The company agreed to pay a settlement fee of $2.3 billion for the damages and for fines that were issued to them. The government awarded $102 million of the settlement paid by Pfizer to the individuals who initiated the whistleblower case.

The lead whistleblower obtained over $50 million of the reward for commencing the case.

Conclusion

After bringing forward evidence of fraudulent activities by Pfizer that stemmed from off-label promotion of its drugs, the whistleblowers were able to commence a lawsuit under the False Claims Act and hold it accountable for promoting products for things that were not approved by the FDA.  Pfizer’s record $2.3 billion settlement should put other pharmaceutical companies on notice that the government will not allow them to try to promote products in a way that has not been cleared by the FDA for the safety of the people.  If you’re asking yourself, “How do I report Medicare Fraud,” People who have information regarding off-label promotion or other inside information regarding the government being defrauded should speak with a pharmaceutical whistleblower lawyer like former FBI Special Agent Jason T. Brown of Brown, LLC to receive a free consultation regarding their rights.

How Long Does It Take to Resolve A Whistleblower Case?

In the last decade the amount of whistleblower awards have hit the billion dollar mark.  Sadly, that means there’s been billions and billions of fraud and funds that require recapturing.  One of the most common questions whistleblowers ask is how long does it take to resolve a qui tam lawsuit.  Like a fine wine good things take time, and a successful qui tam lawsuit depends on many, many factors, including the selection of the right whistleblower lawyer, candor with your qui tam counsel and filing the case properly under seal.  Even with all that, there are many more suits that lose than win and you should expect it to take a long, long time for the most part, with an occasional quick victory.

The Process of a Qui Tam Lawsuit

To understand how long a Qui Tam lawsuit really takes, it is important to consider the many processes involved in these specialized cases. There are various types of whistleblower statutes, the most prolific is the False Claims Act (FCA), the CFTC Whistleblower statute, the SEC Whistleblower statute and various other state False Claims Act and whistleblower statutes such as the Illinois False Claims Act, the California False Claims Act, and the New York Tax Whistleblower laws.  Each statute you must navigate differently, and all of them take time.

For statutes like the Federal and most state False Claims Acts you must file the matter with a whistleblower law firm and cannot file it pro se (without an attorney). The case starts with the whistleblower speaking with an attorney who focuses on qui tam matters.  Most whistleblower lawyers will offer a free, confidential consultation regarding the matter and will only receive payment if they win the case.  It is important when you call a whistleblower hotline or speak with the right qui tam counsel you candidly discuss the case, the proofs and your likelihood of success. Nothing is ever guaranteed.

If the case has potential, then the whistleblower attorney drafts the complaint based on the evidence to file the case. The qui tam lawsuit is then filed secretly under seal along with a Disclosure Statement, with all the relevant information and proofs.

At this time, the lawyer and the whistleblower needs to wait for the government to consider the case and do some investigation on their side. The government needs to decide whether or not they wish to intervene in the case which can take considerable time.  Generally, the case stays under seal for at least a year, but it can be many, many years until the government makes up its mind whether to take the case, which is known as a whistleblower intervention, or to decline the case allowing the case to be unsealed

Many times when the government conducts a thorough investigation and corroborates the allegations of the complaint, it often resolves the matter contemporaneously with its unsealing.  However if it is not resolved upon unsealing, the case turns into a normal piece of litigation with the Court setting the litigation schedule and depending on the jurisdiction the case can take another couple years until the trial.  Most cases resolve before trial, but some will have to be tried, and also there is an appeal process.

Conclusion

A whistleblower case can take a significant period of time since there are many procedures and steps that need to be taken in order for the case to be filed, investigated, litigated and completed. In some cases, the process can take several years before any true progress is made. On the short side, some cases can take a year to eighteen months, with most cases averaging 3-5 years and some could be a decade long battle. The length of time the case remains under seal can be used to your advantage as well which is why its important to speak with a seasoned whistleblower lawyer like former FBI Special Agent Jason T. Brown, from Brown, LLC and his qui tam team to determine If you have a whistleblower case worth filing.

How Much Is a Whistleblower Awarded for a Successful Case?

Filing a whistleblower case is courageous but risky.  Even though there are various statutes that prohibit retaliation against whistleblowers, once a case is commenced a whistleblower may feel like everyone is out to get them or that people are following them or their phones are tapped, or a variety of other symptoms that although they are unfounded are common beliefs from people going through the process.  Most of the concerns are unfounded since the initial qui tam lawsuit is filed under seal, which means the company committing the Medicare Fraud, Medicaid Fraud, or SEC violation is not even aware initially there is a charge against them.  That coupled with the fact the whistleblower lawsuit may take years sometimes takes the wind out of the potential relator’s sails, but with the right whistleblower law firm to address your concerns the process becomes more palatable.

Although justice should be a prime motivating factor in commencing a qui tam lawsuit, there is also a possible economic reward for the right information.  The whistleblower award is provided if the case turns out to be successful and the government is able to retrieve funds that were lost due to the fraudulent activity. This raises common questions whistleblowers ask:

How much can I win as a whistleblower?

What is the average whistleblower settlement?

Rewards for Whistleblower Cases

In recent years billions of dollars have been recaptured and sent back to the government for violations of the False Claims Act (FCA), the most commonly used whistleblower statute that fights fraud against the government.

The reward provided to a whistleblower varies from case to case and statute to statute. For cases that address Medicare Fraud and Medicaid Fraud, or Defense Contractor Fraud, if the case is successful a whistleblower can receive between 15% and 30% of the amount that is recovered during the case under the False Claims act and potentially more under different State False Claims Act statutes like the Illinois False Claims Act

If the government intervenes in a case under the FCA the relator (whistleblowers) percentage is generally 15-25%.  If the government declines intervention then it go as high as 30%?   So it’s better if the government doesn’t intervene in the case, right?  Well, as a rule that is wrong, since the average whistleblower settlement for a case intervened by the government is roughly $12.5 million dollars, and without government intervention it’s a couple million.  So although a whistleblower may stand to gain more percentagewise without the government’s intervention, it’s a smaller piece of the pie.  The numbers may be a little deceptive because some of the bigger settlements can be in the hundreds of millions of dollars and those are generally with government intervention, so they can skew the bell curve for awards.

Under various statutes like the New York False Claims Act, Illinois False Claims Act, the California False Claims Act there are other mechanisms in which you can also recover for violations against the state or private insurance.  Some actions may include tax fraud, which there is also an IRS Whistleblower provision, which in order to trigger Federally you would need a stellar case with crystal clear information spoon-fed to the government, but the New York Tax Fraud provisions can be advanced much easier with our without the government.  The IRS requires the IRS.  Also, popular in recent years are the use of the SEC whistleblower statutes and the CFTC whistleblower statutes where whistleblower awards can go up to 30%.

Conclusion

Whistleblower cases are challenging, but there is a certain satisfaction that can come from doing what’s right and if successful the whistleblower award can be as high as in the tens of millions of dollars if not more.  Many factors go into whether the whistleblower case is worth bringing, and what percentage of the award is given so it’s important to speak with an experience whistleblower lawyer who fights for and protects whistleblowers like Jason T. Brown (Former FBI Special Agent), of Brown, LLC who can educate you about your rights and the pros and cons of commencing a whistleblower lawsuit.

Common Types of Frauds in The Healthcare Industry Reported by Whistleblowers

Every year the American taxpayer is cheated out of billions of dollars as a result of fraud, such as systemic Medicare Fraud and Medicaid Fraud. The fraudulent activity occurs in all industries as people wrongfully think the government isn’t watching.  There are all sorts of mechanisms to ensure that companies and people don’t cheat the government and various whistleblower laws to award people with targeted information to come forward with their whistleblower case.

Take a recent case against Spa Castle Inc, for example, a company who committed tax fraud and  settled for $2.5 million under the New York Tax Whistleblower Laws which allow private citizens to commence whistleblower actions to hold tax cheats accountable.  The tax whistleblower in this case received a $575,000 New York Tax Whistleblower Award for reporting on how the massage parlors failed to report income, thereby failed to pay taxes, thereby cheating the taxpayer out of money.  The IRS has a whistleblower program as well, where if the insider has very specific information regarding over $2 million dollars of tax fraud they may act, but it must be very detailed insider information.

However, the most common industry where fraud against the government occurs is in the healthcare industry – with fraud such as hospitals and medical facilities submitting false claims such as providing unnecessary treatments, upcoding, using unlicensed individuals, engaging in kickbacks schemes and a host of other violations meant to cheat Medicare of Medicaid or private insurance out of money.

Types of Healthcare Fraud

There are different types of fraudulent activities that occur within the healthcare industry. Some cost the government more than the others. Understanding the types of healthcare fraud and how to recognize such fraud is important for whistleblowers. The ability of a whistleblower and the government to bring a claim are governed by the False Claims Act (FCA).

False Billing

False billing or billing for services not rendered is a relatively common type of fraud that occurs in the healthcare industry. This involves a physician or treatment facility, including care centers and hospitals, submitting claims to Medicare or another federally funded policy for services that were not provided to a patient. In some cases, the fraud would go as far as to forge a signature in order to make such false claims or doctor a chart to justify the bill.

Providing Unnecessary Treatments and Services

Many doctors and health care facilities have been found guilty of providing treatments that are unnecessary, with the sole purpose of committing Medicare Fraud and Medicaid Fraud and billing their insurance policy for the services rendered.  Medical necessity cases can be difficult to prove if reasonable minds disagree regarding the extent or course of the treatment.  One such example is the case against a doctor for falsely diagnosing patients with skin cancer in order to initiate unnecessary treatments on the patients when insured through Medicaid or Medicare.  There are many examples where the medical provider reflexively bills everyone for treatments that walk through the door, whether they need it or not.  For example, the Doctor may ask do you ever have a headache and when almost anyone answers yes, they might feel your temples and bill for a detailed cranial test or reflexology.

Double Billing

Double billing refers to scenarios where a medical provider bills a patient’s healthcare policy for two visits when the patient only had one appointment with the doctor. The doctor would often use a duplicate of the original claim for the “real” appointment and change a few details, such as the date, and then submit the same claim again.

Service or Item Upcoding

Services rendered by healthcare providers have specific codes assigned to them. Some codes yield higher payouts for the provider from a federally funded policy. The same goes for the prescription of medical devices. Some healthcare providers would submit a higher code to a patient’s healthcare provider than the code of the item or service provided to the patient with the sole purpose of additional profits.

Conclusion

The government relies on whistleblowers to come forward with concrete information to hold accountable many of these tax cheats, Medicare frauds and other cheating of the government and insurance.  Most False Claims Act whistleblower cases are filed against hospitals, care centers, physicians, or other parties in the healthcare industry. Double billing and claiming for unprovided services are common types of fraud committed by them. Whistleblowers play an important role in uncovering such fraudulent activities and helping the government retrieve ill-gotten funds. In turn, whistleblowers may be entitled to a whistleblower award for their information. Under the False Claims Act, the whistleblower must use a whistleblower law firm.  If you believe you have information regarding Medicare Fraud, Medicaid Fraud or many other types of fraud against the government you should consult with a whistleblower law firm like Brown, LLC led by former FBI Special Agent Jason T. Brown to go over your rights and determine how to make your case.

References

https://ag.ny.gov/press-release/ag-underwood-and-acting-tax-commissioner-manion-announce-criminal-conviction-and-false

South Carolina Judge Enters Judgment for $114M in Favor of Whistleblowers

The United States government suffers an astronomical loss in the billions each year due to fraud in the healthcare industry. Doctors, laboratories, and many healthcare facilities commit fraud in many different ways. When misconduct occurs in these facilities and the patient is insured through a governmental program, such as Medicare or Medicaid, then it means money is being stolen from the U.S. government.

Early in 2018, a judge in South Carolina entered a judgment  that totaled $114 after three whistleblower cases were investigated. A number of health care facilities and doctors were linked to the case, all of whom were held responsible for the fraud they had committed. The evidence in regards to the fraudulent activity was brought forward by employees of these facilities.

Whistleblower Cases Against Health Care Facilities In South Carolina

After three whistleblower cases were filed this year, a South Carolina judge entered a judgment against them for $114M, payable by the healthcare institutes that were involved in the Qui Tam cases. This judgment was made after a jury at Charleston, SC, found the defendants in the case guilty for defrauding Medicare, a health care program that is funded by the government.

Three Qui Tam cases were filed, and the litigation of the three cases was conducted together. Only one of the whistleblowers involved in these cases testified in the courtroom.  Evidence was made available that proved these companies were paying certain physicians to order blood tests from the laboratories that were completely unnecessary. These drug tests yielded large fees, which were claimed from the federally funded insurance program of the patient. The physicians who participated in the fraud were instructed only to seek out patients who were insured by Medicaid or a similar healthcare agency.

In many cases, some expensive blood tests were ordered for cardiovascular diseases that the patient did not have. The doctor was, in turn, paid a $20 fee for ordering these tests. The pay to play or kickback scenario sometimes triggers violations of the Anti-Kickback statutes or if there is self-dealing the Stark Act.

The investigation found that Health Diagnostic Laboratory had submitted a total of 35,074 claims to government health care programs. Another 3,813 claims linked to these frauds were submitted by Singulex, a blood laboratory based in California.

Conclusion

Whistleblowers play an important role in the recovery of money lost by the government due to fraud in the healthcare industry. The case against Quest Lab, Singulex, and the Health Diagnostic Laboratory allowed the government of the United States to recover $114M in losses caused by fraudulent activities from these institutes. While no specific data was released regarding the awards issued to the whistleblowers, the reward amount was likely between $17.1M and $34.2M, divided between the employees who brought up the Qui Tam lawsuits. If you know of any healthcare fraud, Medicare Fraud, Medicaid Fraud or anyone else defrauding the government you should speak with a whistleblower law firm like Brown, LLC who offers free consultations and can advice you on your rights.

How Do Whistleblower Cases Combat Fraudulent Activity in the Health Care Industry?

Thousands of health care facilities have had to pay an aggregate of billions of dollars in penalties for committing fraud against the government and the taxpayer in the form of Medicare Fraud and Medicaid Fraud.  When employees of a facility committing fraud detect the misconduct, they can come forward with accusations and file a whistleblower case, also known as a Qui Tam action.

For some actions, like CFTC whistleblower actions, SEC whistleblower actions, and IRS whistleblower actions, the identity of the individual can remain confidential throughout the entirety of the process.  For the most common case filed, under the False Claims Act (FCA), while the identity of the whistleblower is initially sealed from the defendant, it is revealed when the case becomes unsealed after the government has had time to investigate the matter.  Many employees fear the potential consequences of their actions, but certain and aggressive laws have been implemented to ensure these employees are not only rewarded but also thoroughly protected against retaliation.

How Whistleblower Cases Work

Understanding how Qui Tam lawsuits work is an important factor for employees who witness fraudulent activity in their workplace. When an employee in the healthcare industry finds that their employers is conducting fraud – such as when false claims are made to the patients’ health care policies, then the employee may come forward with evidence in order to file a case against their employer.  This fraud may happen in many ways such as overbilling, upcoding, billing for services not rendered, and a variety of other health frauds that are often creative ways to overbill Medicare and Medicaid.

The False Claims Act specifies that any citizen is able to sue a business or a person who conducts fraud that leads to a loss of governmental funds. If you suspect or know of a fraud, you should consult with a Qui Tam attorney to learn about your rights and the pros and cons of proceeding with a whistleblower lawsuit.

The only parties who will be notified of the lawsuit during the early stages of the case are the government. The case is kept secret from the party that is being accused. The government can then decide if they would like to intervene in the case. If the government decides not to intervene, the whistleblower can still continue with the case with the whistleblower attorney they have retained to represent them.  Under the False Claims Act, you must have an attorney to file the case with you; you can not file the case without one.

The government after reviewing the complaint will conduct what is known as a relator interview, that is it will sit down and interview the individual complaining of the fraud.  From that interview it will determine whether there are any leads that should be followed, the course of the qui tam investigation and whether to intervene or not.  At some point the Defendant will be made aware of the investigation, and the whistleblower will be given a head’s up before that occurs.

If the case is settled, or if there is a judgment obtained, and the government has recovered the funds they have lost due to the fraudulent activity, a reward between 15% and 30% the settlement amount is provided to the whistleblower.

Conclusion

Even though many individuals observe misconduct in the workplace, often resulting in fraud, employees are often not sure what to do about it or how exactly whistleblower cases work. Fortunately, with appropriate guidance, the whistleblower can put together a solid case and even be rewarded in the process. Choosing the right lawyer becomes an essential factor here, so it is important to consult with a firm like Brown, LLC who has successfully handled whistleblower cases in the past, and can educate you about your rights.

CareCore National LLC Pays $54M Settlement In Qui Tam Case

An investigation that started in February 2013 resulted in the settlement of a Qui Tam case against CareCore National LLC. A licensed nurse who was employed at CareCore National LLC came forward with evidence of the unlawful practice that was being conducted. After two law firms represented the nurse, a False Claims Act (FCA) lawsuit was filed under seal with the federal court in Southern District of New York. The settlement called for CareCore to pay $54 million. Since the case was filed using the provisions in the FCA, the whistleblower award of roughly 20% or $10 million dollars will be given to the woman who had the courage to bring this matter to the government’s attention through her whistleblower lawyer.

The Qui Tam Case Against CareCore National LLC

On the 21st February 2013, a whistleblower case was filed secretly, under seal, against the health care agency CareCore National LLC. A licensed nurse, known as the relator in the case, brought evidence of misconduct in her workplace to two whistleblower law firm who focus on prosecuting these violations.

CareCore National LLC is a company based in Bluffton, South Carolina. They have several branches throughout the United States. The company provides an authorization service for doctors and other facilities who need to verify whether specific types of tests need to be conducted on patients, ultimately promoting their services as a cost-saving way to ensure only the necessary tests are performed on a doctor’s patients.

When any information is missing from a submitted file or when the authorization request submitted to the company does not comply with the set criteria, then nurses are instructed to submit them back to the doctor who originally submitted the request. The doctor would then be requested to review the request and provide the data that is missing from the authorization request.

According to the nurse who brought the whistleblower case forward, however, the company instructed nurses to instead rubber stamp all authorization requests as “Process As Directed.” This means the request is not submitted back to the doctor for review, but rather passed on and the tests are authorized, even when they are not truly necessary. In turn, this led to thousands of patients undergoing diagnostic tests like MRIs, even when not necessary to assist in their diagnosis. Claims were made from federally funded insurance providers. Ironically, the process was nicknamed P.A.D. and jokingly referred to as Padding the bill, which is not joke to taxpayers who every year have to foot the bill for billions of dollars in Medicare and Medicaid Fraud.

Conclusion

Thousands of whistleblower cases against healthcare organizations are filed each year with whistleblowers exposing corruption in such areas as Medicare and Medicaid Fraud.   The False Claims Act provides a way for the government to be repaid for fraudulent misconduct that causes them a loss. These cases play a vital role in preventing further fraud and bringing existing fraudulent activity against federally funded health insurance plans to the attention of the right lawyers who focus on whistleblower cases. If you’re wondering “How do I blow the whistle?” or “Do I have a whistleblower case?” you should speak with a whistleblower law firm like Brown, LLC who can provide a free confidential consultation.

What is a CFTC Whistleblower?

The CFTC Whistleblower program is an acronym for the Commodity Futures Trading Commission Whistleblower program.  The program is designed to provide whistleblower awards for the insiders or those with detailed information regarding violations of the Commodity Exchange Act.  The information must lead to the CFTC bringing a successful enforcement action.  As with other whistleblower programs, the CFTC has an anti-retaliation provision that prohibits taking action against someone who commences a CFTC action.  It is strongly recommended that someone considering commencing any qui tam lawsuit retain whistleblower counsel, particularly a CFTC whistleblower lawyer (like Brown, LLC – formerly JTB Law Group, LLC) to assist with navigation through the whistleblower process.

CFTC Covered Actions

A term of art in the CFTC whistleblower program is “Notices of Covered Actions.” A Notice of Covered Action refers to when the CFTC is successful with a settlement or judgment in excess of 1 million dollars in economic sanctions against a defendant.  One must vigilantly check the Notices, since if you submit a TCR, which is the form to file a CFTC whistleblower complaint, then you have 90 days from the Notice to apply for the award.

Commodity Exchange Act

The Commodity Exchange Act (CEA) is what regulates the trading of commodity futures.  You can read the full act here at 7 USC 1 – 27f.  Basically, there are many different ways in which futures can be the subject of a whistleblower action.  Insider Trading, pumping and dumping, blasting the news groups to manipulate the market, putting the interest of the company before the client to name a few.  Inherently, the nature of futures trading sounds sophisticated, and some of its designs are traps to separate the unwary from their money.  Further, in a complex system oftentimes individuals and companies find ways to corrupt if for their own economic benefit which is what the CFTC Whistleblower program seeks to remedy.

CFTC Whistleblower vs. SEC Whistleblower

An SEC whistleblower is someone who provides information regarding a publicly traded company where generally the company is violating various SEC provisions.  The CFTC whistleblower program is limited to commodities and futures trading.

CFTC Final Orders and Award Determinations

It is important to review the CFTC Final Orders and Awards page to try and ascertain whether information you provided has been acted upon.  On August 2nd, 2018, The Commodity Futures Trading Commission (CFTC) announced record breaking whistleblower awards totaling $45 million dollars. The CFTC pointed out the increased amounts reflect the “growing success of the CFTC’s Whistleblower Program, in particular the increasing volume and complexity of incoming whistleblower submission.”  Attached is a sample highly redacted order which you can view some whistleblowers received significant whistleblower awards and some had their requests denied.

CFTC Whistleblower Law Firm

Whistleblower Law is highly complex and always evolving.  There’s very stringent ways to file a whistleblower lawsuit and if you run afoul your case may automatically lose based on procedural technicalities.  If you have information regarding commodities or futures frauds, you should speak with a CFTC lawyer right away.  The lawyers at Brown, LLC protect CFTC whistleblowers and offer free confidential consultations and can speak with you after hours or during the weekend when its most convenient for you, but even if you don’t speak with our whistleblower law firm, you should consult with a whistleblower lawyer as soon as possible to protect your rights and to assist you in filing your CFTC claim.

New York’s False Claims Act – Alive & Well!

New York is one of the few states that has a very robust False Claims Act (FCA) that enables the state to go after tax cheats to a greater extent. On August 30th, 2018 the Appellate Court in New York allowed a case to proceed alleging a massive tax fraud that was initially dismissed at the trial level. An anonymous whistleblower filed a case against Moody’s alleging tax fraud. The allegations are highly technical in one sense, “Plaintiff relator asserts claims on behalf of the State and City against Moody’s under section 189(g) of the State Finance Law (the False Claims Act [NYFCA]), alleging that Moody’s “knew that MAC . . . did not qualify for the protections of the laws governing captive insurance companies,” yet submitted “materially false and fraudulent” tax returns treating MAC as a legitimate captive.” In another sense the allegations boil down to what they generally do, that the company cheated on its taxes, thereby cheating the taxpayer. The case against Moody’s is still in the allegation phase and although the Court is allowing the case to proceed indicating it has been pled with sufficient specificity it has made no decision regarding the underlying merits.

A relator is someone who brings an action on behalf of the government through a qui tam action, otherwise known as a whistleblower action. There are many different types of whistleblower claims New Yorkers or those who have information regarding New York violators of the law can bring. They include:

• Medicaid Fraud
• Tax Fraud
• Off the Books Employees (Tax Fraud)
• Revenue Concealment (Tax Fraud)
• Use of Dummy Companies (Tax Fraud)
• Defrauding the State Government
• Bid Rigging
• Kickbacks

Also, many cheats also involve defrauding the federal government which would implicate the Federal False Claims Act (FCA) as well for things like:

o Medicaid Fraud
o Defense Contractor Fraud
o IRS Fraud
o SEC Whistleblower Fraud
o CFTC Whistleblower Fraud

The whistleblower statutes are dense and complex and require navigating them the right way. In contrast to other areas of law, if you don’t file something properly under seal to commence your whistleblower lawsuit you may forfeit your right to an award.

Therefor, it is critical to consult with a New York Whistleblower lawyer to educated yourself about your rights and protect you if you decide to proceed. Some statutes, like the SEC Whistleblower provisions may enable you to proceed anonymously from start to finish with the use of an SEC whistleblower or CFTC whistleblower lawyer. Others, like the False Claims Act require the use of a qui tam law firm in order to receive a qui tam award. If you believe you a New York Whistleblower claim, you should speak with a whistleblower lawyer who has a track record of success to guide you through the process. Each day of delay compounds the risk that you are not the first to file which can deprive you of an award or that even worse if you knew about the fraud and failed to blow the whistle, you may be looked as a target in the investigation if someone beats you to the punch. Consider having a free confidential consultation with a New York whistleblower law firm before someone else who knows about the fraud does.

The Best Advice for Whistleblowers

As a whistleblower lawyer who handles cases all over the country from Jersey City to San Francisco, I have the greatest amount of respect for people who have the courage to come forth and put it all on the line to blow the whistle on things they know are wrong and need to be righted. The companies who engage in these frauds are the villains, and the whistleblowers deserve to be knighted.

Each year I compile a list of lessons learned and try to impart the wisdom of our whistleblower law firm onto those that are thinking of blowing the whistle, but don’t know what do. Here is my 2018 list of advice for whistleblowers.

Patience is a Virtue

Good things happen to people who know how to wait, but not to those who wait too late. There’s many different ways to blow the whistle, whether it’s through the False Claims Act (FCA) which addresses defrauding the government via companies committing Medicare Fraud, Medicaid Fraud and Defense Contractor Fraud, SEC Whistleblowers who disclose when the financial companies don’t have the best interest of the clients in mind including inside trading, pump and dumps, cryptocurrency and ICO fraud, CFTC whistleblowers who blow the whistle on the commodities frauds, and IRS whistleblowers who have substantial information regarding tax cheats. Due to the first filed rule, you need to make sure that you promptly file your case if its actionable, but don’t expect things to happen overnight. Sure, some of False Claims Act lawsuits take a year, but generally it’s a long process with extended periods of quiet time and once the FCA complaint is filed its out of your hands for a bit while the government decides what it’s going to do. Make sure you’re working with a False Claims Act law firm that you feel you have a connection with and that is affirmatively going to update you about your case and that you can reach out to on a regular basis even when nothing is going on to speak about your whistleblower case and answer all your questions – even if it’s again and again! A good qui tam lawyer will have gone through the qui tam process many of times, and this is probably your only time. It shouldn’t ever be a bother for them to comfort you in your time of need and curiosity. Some cases can take five or six years to play out and some longer. Remember to enjoy the road, because it’s a long one; don’t just think about the destination.

Think about your Parachute

The whistleblower statutes contemplate cases coming from those on the inside, in a superior position to provide information of wrongdoings, corporate fraud, and outright cheats. A good insider is generally an employee or close to those that will be held accountable when the case is ultimately disclosed. Even though almost every whistleblower statute imaginable has a provision that prohibits whistleblower retaliation, it will happen. The timing may be out of your control about when your identity is disclosed or when the company will conduct an internal hunt for who it thinks could be cooperating, but you have a running start since you’re the one commencing the action. Start to think about what your options are if you have to leave the company. Work on your resume. Look for other opportunities. Also, consider depending on how radical the fraud is do you really want to continue working at the company. We all need to make a living, but if you feel you’re compromising your soul, you need to search whether it’s worth it. Some egregious frauds we’ve encountered are Medicare Frauds where the doctors perform unnecessary surgery just so they can bill for it, Defense Contractor Fraud, where the company takes a shortcut and puts our soldiers at risk, and things like churning and bilking people’s accounts in the SEC context, where the company is hiding fees, taking fees, or doing other things to exploit people’s investments and retirements. You should think about your exit strategy early and generally when you’re still employed it’s an easier time to find new work. Further, it will be easier to find new work before the extent of the fraud of the company becomes public or else when you’re interviewing the taint of the dirty company may make it harder to find a new job.

Find a Whistleblower Law Firm You Feel Comfortable Working With

While the qui tam lawyers at our firm are personable, hardworking and have a track record of success, the chemistry needs to be right between our firm and the whistleblower we’ll be working with for us to consider representation. We’ve turned down cases that are actionable False Claims Act cases because we didn’t think there would be good chemistry and you should be discerning as well. Questions you should consider are will you have access to the qui tam lawyers handling your case, the head of the firm, and can the whistleblower lawyers contact you after hours or on the weekends when it may be easier for you to speak.

There is a proverb in the legal realm that a person who represents his or her own self in court has a fool for a client. There’s quite a bit of information and misinformation online regarding qui tam lawsuits. One thing is for certain; as of this writing in order to file a False Claims Act lawsuit, you must use a lawyer. That is, you cannot bring the action yourself pro-se without an attorney. You shouldn’t do it anyway, as even an attempt to file a whistleblower action the wrong way could result in you losing your case right from the start.

I hope these points added some guidance to you if you’re thinking about filing a whistleblower lawsuit. Even if our dedicated team of whistleblower lawyers is not the right fit for you in the long-term, we’d love to speak with you about your potential case in the short-term and go over in depth whether we help you with your matter or at least steer you in the right direction. We protect whistleblowers coast to coast, so whether you’re in Jersey City or San Diego, Houston, or Tampa or anywhere in between, feel free to call our whistleblower lawyers at (877) 561-0000, for a free whistleblower consultation and no matter what, we’ll wish you the best of luck with your qui tam case.

Trump Administration Impact of Whistleblower/Qui Tam Cases

One thing everyone should be able to agree on is that taxpayer fraud hurts us all.  Its hard to find someone who likes paying taxes and part of the reason they’re so high is because of all the waste, fraud and abuse in government.  People are wonderful.  They do things to help each other even when they don’t have to.  The flip side of the coin, is that people are sometimes disinterested or don’t want to involve themselves in a situation and become a whistleblower.  The qui tam process is a complicated one and without the right whistleblower lawyer it can become a maze that you might never escape.  The other coin itself is the fraud.

In recent years, billions upon billions of dollars have been recovered using a statute know as the False Claims Act (FCA) in which individuals who have the courage to come forward and file a complaint can receive a whistleblower award up to 25% of the recovery.  When you do the math that means hundreds of millions of dollars have gone to whistleblowers in recent years.

This blog is meant to be apolitical and not meant to stimulate a discussion regarding personal opinions about the new administration.  It is however, a discussion of the trends affecting qui tam and whistleblower laws over the last few years.

Although not directly related to this administration, but emerging roughly at the same time, a landmark case was decided called Escobar dealing with the issue of materiality in FCA complaints. The concept of materiality is whether the complained about violation really hurts the taxpayer or is just a very technical one.  One example is in the defense contract context.  The contract with the federal government may call for all sorts of requirements before billing the government for work rendered, including pre-approval from a certain officer.  Let’s say tens of millions of dollars of work were done and paid, but that officer never approved the work.  Even though technically, this could be considered a false claim, the Courts and the government will look to see whether the government would have approved the work anyway.  If the answer is yes, then the violation would not be considered material and you will in all likelihood lose your case under Escobar. 

The new administration has been taking a different posture with cases it declines.  Understanding whistleblower litigation, a case must be filed under seal and the government first decides whether it wants to intervene or not.  In the distant past non-intervention was close to death to a case. Then there was a wave of cases that succeeded without the government’s assistance.  Now, the United States Attorney’s Office has sometimes been taking the position that if there is not an intervention, they may insist or move for a dismissal.  My opinion may depart slightly from the other whistleblower lawyers who think this is a bad thing.  I think if the government weighs in early and says it does not view the violation as material it’s a good thing.  Why go through years of a case if the arbiter for the taxpayers, the government, says it wasn’t harmed can there be a harm?  I won’t take a 100% definitive position on that, because I can envision a massive fraud where a bureaucrat makes the wrong call about the harm, and that’s why there’s the chance to tee up issues like this to the Court.

Another area where the new administration is impacting whistleblower laws is by ending the practice of issuing guidance for regulations.  The guidance was sometimes used as support and less frequently as a basis to commence False Claims Acts.

The final areas to keep an eye on in the relator share or the whistleblower award amount.  In a successful qui tam case the whistleblower is graded in many different areas to determine what percentage of what recovered monies they are entitled to.  Anecdotally, it appears they are trying to knock down the percentage to the whistleblower.  While this may bring more short term gain to the government, it is myopic since it may discourage other whistleblowers from coming forward.

Keep in perspective – many whistleblowers are extremely courageous individuals who do the right thing and run the risk of being fired from their job, being harassed, and suffering other backlash.  Some of what they blow the whistle on is the most distasteful of frauds in the Medicare Fraud and Medicaid Fraud arena.  Medicare Fraud Whistleblowers sometimes blow the whistle on unnecessary services that are so extreme, that doctors are willing to perform unnecessary surgery just to line their own pockets.  That’s horrific and needs to be prioritized and eradicated.

It’s only year 2 into this new administration as of this writing, so we’ll keep an eye on these emerging trends in whistleblower laws.  Remember, if you need a whistleblower lawyer, the qui tam lawyers at Brown, LLC will offer you a free consultation and are only paid if they win your case.

Brown, Jason Brown. International Sophistication is the Next Wave of United States Litigation including Whistleblower Laws.

While the EU may be far ahead of the United States in some of its regulatory actions, where the United States falls behind from a government perspective for better or for worse, generally trial lawyers advance cases in the United States that the rest of the world benefits from.  For example, certain mass torts like litigation against new generations of birth control, originally shadowed European regulations, but were held accountable in the United States by some amazing lawyering from firms and people like Roger Denton and Kris Kraft at Schlicter Bogard and Denton, Paul and David Rheingold at The Rheingold Law Firm, and Jason T. Brown, now with Brown, LLC (formerly JTB Law Group, LLC) and many others.

Cases like the Yaz Litigation where a new generation of hormone was arguably less safe than the earlier generations started in the United States, settled for billions and now worldwide attorneys are taking that template and litigating to hold the pharmaceutical companies accountable globally.

Big Pharma and other global corporations can be held accountable in other ways too, especially with pragmatic use of various qui tam statutes.  A qui tam lawsuit enables private citizens to commence a lawsuit on behalf of the government where the plaintiff is known as a relator since he or she is relating the claims of the government through the whistleblower lawsuit.

With the globalization of companies many individuals worldwide may be in a position to know about billion dollars worth of fraud perpetrated in the United States, but think they can’t bring an action since they are not physically located in the United States.  Consider some of the following situations.  Imagine, you are a whistleblower outside the United States who knows of a massive fraud from a publicly traded company.  You can potentially bring an SEC whistleblower action through the use of SEC whistleblower counsel and perhaps remain anonymous from start to finish.  If it involves commodities you may be able to bring a CFTC whistleblower action.  With potential qui tam awards up to 30% of the amount recovered, a billion dollar fraud could be a hundred million dollar plus recovery for the information.

The False Claims Act will also allow some international whistleblowers to bring an action in the United States.  One thing the large pharmaceutical companies do is research outside the U.S. to make it extremely challenging to obtain the needed discovery due to other countries privacy laws.  Well, if you are in the know and are aware of data that was falsified during clinical studies, lying to the FDA, pharmaceutical products that lack the efficacy they claim, you may be able to be a whistleblower in the United States even though you are not located here.

 

Further, the FCPA Foreign Corrupt Practices Act prohibits United States companies from essentially bribing in other countries to advance their business interests.  There’s a lot of that going on!

If you have information along any of these lines that you’d like to discuss, our international whistleblower lawyers can speak with you confidentially, and we’re only paid if we win your case.  Your information could potentially save lives, certainly save money and hold companies that believe they are beyond reproach accountable.

Whistleblower Hotlines

As a law firm who routinely handles whistleblower cases we have a whistleblower hotline.  The line enables potential whistleblowers to confidentially and freely discuss their potential qui tam claim.  As whistleblower lawyers who only represent individuals who expose fraud, not the companies that commit them, we are dedicated to prosecuting the claims of the people we represent if it’s a case we think is actionable and a fit for our firm.

However, internally within companies, the employer has its own whistleblower hotline to ostensibly report fraud within the company.  Take a step back and think how silly that is.  Yes, some companies probably earnestly want to do the right thing, but many other don’t, that’s why they committed the fraud itself.  When you call a company “whistleblower hotline” the information is received by the company who don’t have the whistleblowers best interest in mind.  Instead they are interested in protecting the company.  Even at the end of the day lines that are supposed to be anonymous and “protect the employee” oftentimes do not.

Inadvertently, when providing information, it is either singular in nature or so limited in nature that a company who wants to go on a mole hunt for the insider can easily do so.  Plus, since the well intentioned person used the internal mechanisms, the company will assume that the person doesn’t have a qui tam lawyer and try to lock them into statements that will damage their own case if they wanted to proceed, or worse yet, document things to try to retaliate and fire the whistleblower.

In short, while calling a company whistleblower hotline may seem like a good idea, it’s perilous.  If you feel the need to call one, ask them first whose interested they will be protecting – your or the company’s?   I’ll tell you now it’s the company, not you that they are paid from and working for, it’s not you.

The company may encourage you to report all sorts of fraud.  If it’s in the health care industry it can be Medicare Fraud, Medicaid Fraud, Insurance Fraud, SEC Fraud, Cryptocurrency Fraud, with many different subsects such as:

Opioid Over Prescription (a priority of the government)

Medicare Fraud – Billing for Services Not Rendered

Medicare Fraud – Upcoding

Performing Unnecessary Surgery

Unlicensed Individuals Billing for Medical Work

Pharmaceutical Whistleblowing – Diluted or Inert Batches. Falsifying Data.

SEC Whistleblower Fraud – Companies not having the best interest of the client in mind.

Another distinction between calling a whistleblower law firm and an internal hotline is that if you file certain types of cases with the use of counsel you stand to receive a whistleblower award which could be as high as 30% of the recovery.

If you know about a company committing fraud, call our whistleblower line at (877) 561-0000 before calling the company one.  You can speak with our qui tam lawyers free of charge and confidentially and we’re not paid unless we win your case.

The Stark Act has Stark Remedies – $237 Million False Act Judgment

In July 2018, the Department of Justice announced the enforcement of a $237 Million Dollar Judgment against a Healthcare System for Medicare Fraud – a judgment that was entered in May of 2013. The basis of the Medicare Fraud stemmed from violations of the Stark Act in which the medical system is forbidden from self-dealing. It is unlikely the government will see all that money however, as per the terms of the settlement the government will receive roughly $72 million dollars and the offending facilities will be sold off.

The Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division stated, “Secret sweetheart deals between hospitals and physicians, like the ones in this case, undermine patient confidence and drive up healthcare costs for everybody, including the Medicare program and its beneficiaries “This case demonstrates the United States’ commitment to ensuring that doctors who refer Medicare beneficiaries to hospitals for procedures, tests and other health services do so only because they believe the service is in the patient’s best interest, and not because the physician stands to gain financially from the referral. The Department of Justice is determined to prevent the kind of abuses uncovered in this case, and we are willing to take such cases to trial to protect the integrity of the Medicare program.”

The Stark Law prohibits hospitals from billing Medicare for certain services (including inpatient and outpatient hospital care) that have been referred by physicians with whom the hospital has an improper financial relationship. The Stark Law has exceptions and exceptions to the exceptions so it is important to consult with a whistleblower law firm if you have knowledge of what you think may be improper self-dealing or a potential kickback type of situations.

At trial the government introduced evidence that the defendant required physicians to refer their outpatient procedures to them and then in turn overpaid them from Medicare for the referred procedures. They did so despite being cautioned that this could constitute medicare fraud and violations of the Stark Law. A jury heard the evidence and ruled for the government which was affirmed by the Fourth Circuit Court of Appeals.

The case was initiated by a physician who had the courage to refuse to sign the illegal contract and thus retained a Whistleblower Law Form to commence a qui tam under the False Claims Act. The statute provides the whistleblower up to 30% recovery with 20% being the norm, and in this case the Doctor will receive a whistleblower award of roughly $18 million dollars for having the courage to do the right thing.

“The type of abusive compensation arrangements at issue in this case is precisely what the physician self-referral law was designed to prevent,” said Inspector General Dan Levinson of the Department of Health and Human Services-Office of the Inspector General (HHS-OIG). “Patients need and deserve to know that the hospital services they receive are the product of sound medical judgment, rather than motivated by the physician’s financial interests. The extensive litigation and settlement in this case should send a signal to the hospital industry that these tainted financial relationships simply will not be tolerated.”

If you know of any similar type of Medicare Fraud or are unsure about whether an arrangement in the health care field is legal or illegal you should consult with a whistleblower law firm like the JTB Law Group, LLC at (877) 561-0000. Generally, whistleblower lawyers are only paid if they win your case and can provide free confidential consultations.

Twenty Two Million Dollar Settlement for False Claims Act (FCA) Liability for Medically Unnecessary Services and Therapy

Healogics, Inc. entered into a settlement with the DOJ to pay roughly $22 million to put to rest allegations it violated the False Claims Act (FCA) for overbilling Medicare for medically unneeded and medically unnecessary therapy.  Specifically, it was alleged that Healogics, a medical company, that supervises nearly 700 hospital-based wound care centers across the country, improperly billed for its hyperbaric oxygen (“HBO”) therapy.  It is not alleged that the therapy wasn’t administered, but instead that it was not needed.  Whistleblower lawyer Jason T. Brown commented that, “This was an excellent settlement.  One has to ask oneself which is worse though – submitting fraudulent Medicare claims for services not rendered, or actually performing those services on people who don’t need them to justify the alleged Medicare fraud.”

HBO therapy is covered by Medicare as an oxygen enriching treatment to wound care that is supposed to be used in certain well defined circumstances.  Oftentimes, a medical company will push its services and products to marshal greater profits and create a buzz about it to generate further use even if its not medically necessary.

According to the settlement, the Defendant agreed to pay $17.5 million up front to settle claims for a four year period.  The agreement also calls for an additional $5 million if certain contingencies occur.

“Civil healthcare fraud enforcement has always been a core part of the mission of our office,” said United States Attorney Maria Chapa Lopez for the Middle District of Florida.  “With this settlement, our Civil Division confirms its commitment to our nation’s critical struggle against practices that put public health programs at risk.”

Sometimes in resolving whistleblower cases under the False Claims Act, defendants enter into Corporate Integrity Agreements with the Department of Health and Human Services Office of Inspector General.  These agreements include monitoring with things like claims and system reviews conducted by independent reviewers often at the entities expense.

In recent years whistleblowers have been handsomely rewarded with a percentage of the recovery and in this whistleblower the case the relator is set to recover up to $4,276,900 as a whistleblower award.  In order to bring a False Claims Act case and obtain a reward, however, the whistleblower must use whistleblower counsel.

 

The case citations are United States ex rel. Van Raalte, et al. v. Healogics, Inc., 14-cv-283 (M.D. Fla.) and United States ex rel. Wilcox. v. Healogics, Inc., et al., 15-cv-1510 (M.D. Fla.).

Owner of Nursing Facilities to Pay $30-million to settle False Claims Act allegations

Two former employees turned whistleblowers succeeded early this month in helping the US government recover millions of misspent health funds and hopefully dissuade similar cases from happening.

In a statement June 8, the Department of Justice said Signature HealthCARE, LLC, owner and operator of approximately 115 skilled nursing facilities from Louisville, Kentucky, agreed to pay $30 million to resolve allegations that it violated the False Claims Act. Specifically, according to the whistleblowers and the US government, Signature HealthCARE engaged in practices that allowed it to submit claims for “unreasonable, unnecessary, and unskilled services” to Medicare patients.

Among others, these include placing patients in the highest therapy reimbursement level by presumption rather than individual evaluation of the level of care they actually need; providing the shortest amount of time required for Signature HealthCARE to bill at a given reimbursement level, and discouraging provision of more therapy beyond this required minimum time; pressuring therapists and patients to complete the planned minutes of therapy even when patients were sick or refusing such therapy.

U.S. Attorney Cochran for the Middle District of Tennessee thanked the teams of civil enforcement attorneys and the relators or whistleblowers who report fraud such as this.

“When we determine that companies are cheating the taxpayers, we will hold them accountable as we have in this case,” Cochran said.

The Justice Department considers the settlement as another demonstration of their efforts to ensure the beneficiaries of government-funded healthcare programs are actually receiving what they clinically need, and not what companies’ profits dictate.

“Signature was charged with illegally boosting profits by providing excessive amounts of therapy to patients whether they needed it or not,” said Special Agent in Charge Derrick L. Jackson for the U.S. Department of Health and Human Services, Office of Inspector General. “The decision to provide therapy should never be based on corporate financial considerations rather than a patient’s medical needs,” he added.

The settlement resolves the lawsuit originally filed by former Signature therapy employees, in federal court in Nashville, Tennessee on March 2015.  They filed the lawsuit under the qui tam, or whistleblower, provisions of the False Claims Act (FCA), which permit private individuals to sue on behalf of the government for false claims and to share in any recovery.  The Act also allows the government to intervene and take over the action, as it did in this case.

Ms. Emerson and Ms. Tuesca will receive a portion of the $30 million recovered funds. Whistleblower awards under the False Claims act can be as high as 30% without government intervention and 25% with but generally settling in around 20%, so the whistleblowers in the instant matter could receive around $6 million dollars for their courage in exposing an alleged fraud against the government for overbilling Medicare.

The case is captioned United States ex rel. Emerson and Tuesca v. Signature HealthCARE, LLC, et al., Case No. 1:15-cv-00027 (M.D. Tenn.).  The claims resolved by the settlements are allegations only, and there has been no determination of liability.

If you have knowledge of Medicaid Fraud, Medicare Fraud, Fraud against the Government, SEC Violations, call our whistleblower lawyers at Call Toll Free (877) 561-0000.

Whistleblower Receives Award in latest string of False Claims Act Settlements

Since 2013, various hospitals have been caught allegedly defrauding the taxpayers to the tune of millions of dollars a year.  In an effort to avoid full exposure, they have paid millions of dollars to settle allegations of False Claims Act (FCA) violations that stemmed from a single whistleblower’s lawsuit in Arkansas. Last week the latest of these settlements was announced by the Justice Department.

In a statement June 5, The Justice Department said Allegiance Health Management, Inc., (Allegiance), a post-acute healthcare management company based in Shreveport, Louisiana, and four hospitals it owned and operated, have agreed to pay more than $1.7 million to resolve False Claims Act allegations that it submitted claims for reimbursement from Medicare for medically unreasonable or unnecessary services.

Since 2005, Allegiance arranged with numerous hospitals throughout the Southeastern United States to provide Intensive Outpatient Psychotherapy (IOP) services to patients on their behalf.  Allegiance established an Inspirations Outpatient Counseling Center in each of these hospitals where its employees and those under its direction and control identified potential patients, created patient treatment plans, and performed IOP services, among others.

This settlement resolves allegations that at each of the Inspirations Outpatient Counseling Centers, Allegiance provided IOP services to Medicare beneficiaries that did not qualify for Medicare reimbursement because 1) the patients’ medical condition(s) did not call for IOP treatment; 2) the patients’ treatments were not provided through an individualized treatment plan designed to help individual patients address specific mental health needs and reach achievable goals; 3) the patients’ progress was not being adequately tracked or documented; 4) the patients received an inappropriate level of treatment; or 5) the therapy provided was primarily recreational or diversional in nature, and not therapeutic.

The Allegiance hospitals that entered the settlement are: Allegiance Health Management, Inc.; Allegiance Behavior Health Center of Plainview, LLC; Allegiance Specialty Hospital of Kilgore, LLC; North Metro Medical Center a/k/a Allegiance Hospital of North Little Rock, LLC, and Sabine Medical Center a/k/a Allegiance Hospital of Many, LLC.

Before this, more than 20 other hospitals reached settlements to resolve the same False Claims Act allegations. Sixteen of these hospitals and their respective corporate parents collectively agreed to pay $15.69 million in May 2015. Two years before that, in October 2013, LifePoint Hospitals Inc. and two of its subsidiaries, PHC-Minden L.P., doing business as Minden Medical Center, and PHC-Cleveland Inc., doing business as Bolivar Medical Center, collectively paid more than $4.67 million.

As the whistleblower who brought the fraud to the federal government’s attention, he reportedly receives 17 percent of the settlement. Ladner filed a lawsuit in the Eastern District of Arkansas under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery.  The individual commencing the action on behalf of the government is known as the relator and individuals must file a qui tam lawsuit with whistleblower counsel.

In this $1.7 million settlement, the awarded whistleblower stands to receive around $300,000. In the previous settlements, he has already received more than $3 million. The qui tam relator used to work for Allegiance. He was Program Manager at the Inspirations Outpatient Counseling Center located at Wesley Medical Center in Hattiesburg, Mississippi.

All in all, the string of settlements combine amounted to more than $22 million payments from various hospitals in at least seven states. Though these payments resolved the FCA cases, the allegations involved still remain as allegations.

Acting Assistant Attorney General Chad D. Readler for the Civil Division said they will continue to hold accountable “those who waste taxpayer dollars and place profit above the legitimate needs of patients.”

“Entities that bill for needless services – as alleged here – cheat taxpayers and threaten the integrity of government health programs,” said Special Agent in Charge CJ Porter for the Office of Inspector General of the U.S. Department of Health and Human Services.

The claims settled by the current agreement are allegations only, and there has been no determination of liability.  The lawsuit is captioned U.S. ex rel Ladner v. Allegiance Health Management, Inc., et al, No. 4:10-CV-170 (E.D. Ark.). #

If you have knowledge of Medicare Fraud, Medicaid Fraud, or any other fraud against the government, don’t hesitate to Call Toll Free (877) 561-0000.

Three laboratory bosses to pay $114-M for violations of False Claims Act, paying kickbacks

Cases separately brought to court by three whistleblowers in 2015 continue to generate significant financial recoveries for federal health care programs and considerable whistleblower awards for the relators that brought them. Last week, the United States District Court in the District of South Carolina entered judgment amounting to more than $111 million against LaTonya Mallory, Floyd Calhoun Dent III and Robert Bradford Johnson, plus more than $3 million against Johnson and Dent. As provided by the False Claims Act, the amount represented three times the amount the three individuals illegally profited by submitting their false claims. The Court trebled the damage amounts, offset settlement payments received from the laboratories that submitted the false same claims, and with the whistleblower award computations awarded $63.8 million in penalties as requested by the United States, for a total qui tam judgment of more than $114 million.

Last January, Mallory, Dent, and Johnson were found liable of violating the False Claims Act (FCA) when they paid physicians in exchange for patient referrals to their laboratories. The court found them in violation of the Anti-Kickback Statute and related to this, causing their laboratories to bill federal health care programs for medically unnecessary testing. This judgment followed at least two settlements separately inked in the case by other involved laboratories in recent years.

Based on government investigations and the cases brought by the whistleblowers, the government presented evidence showing these individuals paid physicians in exchange for referrals that benefited their laboratories through financial claims to Medicare and Tricare. The government said the remuneration came disguised as processing and handling fees of between $10 and $17 for each patient referred to the blood testing laboratories:  Health Diagnostics Laboratory Inc. (HDL), of Richmond, Virginia; and Singulex Inc., of Alameda, California.

Add to this, the government also showed evidence that the said kickback scheme resulted in physicians referring patients to HDL and Singulex for medically unnecessary tests, which were then billed to federal health care programs.

The judgment says Mallory, HDL’s former CEO, and Johnson and Dent, were liable for causing the HDL’s submission of 35,074 false claims, worth $16,601,591, to Medicare and TRICARE. The jury also found Dent and Johnson liable for an additional 3,813 false claims, worth $467,935, submitted by Singulex.

Also resolved through this court’s order were three lawsuits originally filed by Dr. Michael Mayes, Scarlett Lutz, Kayla Webster, and Chris Reidel under the qui tam, or whistleblower, provisions of the False Claims Act.  Under the FCA, private citizens can bring suit on behalf of the government for false claims and they can share in any recovery.

The False Claims Act permits the United States to intervene in and take over the whistleblower suit, as the United States partially did in the three consolidated actions against Mallory, Dent, Johnson, and others in August 2015.

How much of the recovery will go to the whistleblowers is not yet known as of this writing, but whistleblowers can recover up to 30% of the recovered funds, but generally settle in around 20% when the government intervenes.  A whistleblower recovery of 20% of $114 million still could be around $25 million dollars, a large whistleblower award for those that the courage to come forth and report these wrongdoings.

The government gave recognition to the whistleblowers and anyone who takes steps to help uncover similar cases of health fraud. In a statement from the Justice Department on Tuesday, May 29, Acting Assistant Director of the Criminal Investigative Division Chris Hacker vowed that “The FBI will continue to aggressively investigate allegations of criminal misconduct between companies and individuals who engage in kickback schemes at the expense of the U.S. government.”

“We recognize the importance of those who came forward and brought allegations to light and realize that we cannot do our work without the public’s help,” Hacker also said.

The cases are captioned United States ex rel. Mayes v. Berkeley HeartLab Inc., et al., Case No. 9:11-CV-01593-RMG (D.S.C.); United States ex rel. Riedel v. Health Diagnostic Laboratory, Inc., et al., Case No. 1:11-CV-02308 (D.D.C.); and United States, et al. ex rel. Lutz, et al. v. Health Diagnostic Laboratory, Inc., et al., Case No. 9:14-CV-0230-RMG (D.S.C.). 

US intervenes in False Claims Act cases of whistleblowers against opioid-selling Insys

Five cases brought up by whistleblowers were consolidated and unsealed early this month as the United States intervened in the False Claims Act (FCA) cases against Insys Therapeutics, Inc.

The cases allege illegal marketing tactics related to Subsys, a sublingual spray form of fentanyl, a highly addictive opioid painkiller. Subsys was approved by the Food and Drug Administration in 2012 for persistent breakthrough pain among adult cancer patients who are already receiving but are tolerant to around-the-clock opioid therapy.

According to the five “whistleblower” lawsuits, the Arizona-based Insys Therapeutics, Inc. paid illegal kickbacks and defrauded federal health programs in selling Subsys.

Opioid lawsuits are highly prioritized by this administration as the epidemic has reached epic proportions and the government seeks ways to combat addiction.  Opioid Medicare Fraud or Opioid Medicaid Fraud allegations will trigger a swift reaction from the government particularly if programs meant to benefit injured people are exploited solely for economic gain and create a cycle of dependence.

Insys allegedly paid kickbacks to induce physicians and nurse practitioners to prescribe Subsys for their patients. The United States said in the complaint that these kickbacks took the form of sham speaker fees to physicians, jobs for the prescribers’ relatives and friends, and lavish meals and entertainment.

The United States also alleges that Insys improperly pushed physicians to prescribe Subsys for patients who did not have cancer. The government alleged that even the Insys employees lied to insurers about patients’ diagnoses to avail of reimbursements on prescriptions meant for Medicare and TRICARE beneficiaries.

In a statement, United States Attorney Nicola T. Hanna explained that the government’s intervention in the whistleblower lawsuits is just one among their efforts to fight the opioid crisis. The government believes that the illegal marketing activities such as the modes exposed in these whistleblowers’ lawsuits help fuel the opioid crisis.

Whistleblowers can file lawsuits such as these on behalf of the United States if they see that a party has submitted false claims for government funds. This is stated in the qui tam provisions of the False Claims Act, which also gives the whistleblowers a share in any recovered funds.

The United States has the right to intervene and take over responsibility for litigating such cases. In this complaint against Insys, for example, the United States intervened since last month.

“Insys allegedly bribed doctors who are more concerned with profits than patients,” said Christian J. Schrank, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “Encouraging the inappropriate use of this too-often deadly opioid is intolerable enough, but the abuse is compounded when taxpayers are forced to pick up the bill,” he added.

As of this writing, the above are still allegations. Insys’ liability has not yet been determined. Meanwhile, the United States is also separately pursuing a number of criminal cases against Insys employees and Subsys prescribers.

The following are the whistleblowers’ lawsuits consolidated last week in Los Angeles and entered into by the United States government: United States, et al., ex rel. Guzman v. Insys Therapeutics, Inc., et al., 13-cv-5861; United States ex rel. Andersson v. Insys Therapeutics, Inc., 14-cv-9179; United States ex rel. John Doe and ABC, LLC v. Insys Therapeutics, Inc., et al., 14-cv-3488; United States ex rel. Erickson and Lueken v. Insys Therapeutics, Inc., 16-cv-2956; and United States ex rel. Jane Doe, et al. v. Insys Therapeutics, et al., 16-cv-7937. #

 

If you know of similar unhealthy arrangements that lead also to defrauding Medicare, Tricare or any other government fraud, call our whistleblower law firm toll free (877) 561-0000. 

Mental Health Clinic and Psychiatrist Owner Pay $805,000 to Settle False Claims Act (FCA) Allegations

Thanks to a whistleblower from Connecticut, the patients in the area utilizing psychiatric services will hopefully no longer become unknowing parties to misspending the government’s health budget or of any additional Medicare Fraud or Medicaid Fraud.

United States Attorney John H. Durham and Connecticut Attorney General George Jepsen announced May 14 that Dr. Erum Shahab and Waire, LLC, doing business as Ellington Behavioral Health (EBH), have entered into a settlement deal with the government. They agreed to pay $805,071 to resolve allegations that they violated the False Claims Acts.

Shahab is a psychiatrist who also owns the EBH, a psychiatric clinic in Ellington, Connecticut. The clinic treats people with depression and substance abuse. It promises the latest in psychiatric treatment.

In treating patients with substance use disorders, Shahab and the clinic regularly conduct urine drug screening tests on urine samples from their patients. They use a single urine sample to screen for use of multiple classes of drugs. For Medicare, this is considered a single test and billed only once for every patient.

But Shahab and EBH submitted claims to Medicare for multiple units of urine drug screening tests when they knew or should have known that only one unit of service could be billed per patient encounter, the government alleged along with the original whistleblower. Due to EBH’s improper coding of claims, Shahab and EBH received hundreds of thousands of dollars from the Medicare program that they were not entitled to receive, the government said in its complaint.

On top of this, Shahab and EBH also allegedly billed Medicaid for urine drug screening tests even when it did not actually test the urine samples or they tested it weeks or months after collecting the urine samples from the Medicaid beneficiaries.

The $805,071 settlement deal between the government and Shahab and EBH covers claims they submitted to the Medicare program from January 1, 2011 to September 30, 2013, and claims submitted to the Medicaid program from January 1, 2014 to June 30, 2014.

As the relator, Dr. David Simon, a former employee at EBH, will receive a share of the proceeds in the form of a whistleblower award amounting to $99,113. He filed his complaint in the U.S. District Court in Connecticut under the qui tam, or whistleblower, provisions of the both the federal and state False Claims Acts.

The whistleblower provisions of both the federal and state False Claims Acts provide that the whistleblower or relator is entitled to receive a portion of the proceeds of any judgment or settlement recovered by the government.

“Physicians and their medical practices must carefully code their claims, honestly bill for services, and ensure that taxpayers’ health care dollars are properly spent,” said U.S. Attorney Durham.

In 2012 and 2014, Dr. Shahab has also been reprimanded and fined by the government, in these cases allegedly due to improper handling of addictive drugs.

 

If, like whistleblower Dr. Simon, you suspect that a health care fraud is happening, call to speak with our whistleblower law firm toll free (877) 561-0000.

$280 Million Foreign Corrupt Practices Act (FCPA) & SEC Settlement

Panasonic Avionics Corporation (PAC), part of  global electronics company Panasonic Corporation (Panasonic), has agreed to pay $137 million dollars for alleged violations of the Foreign Corrupt Practices Act (FCPA).  The charges arise out of a scheme to retain “dummy” consultants used to conceal third-party payments for accounting fraud.

Acting Assistant Attorney General Cronan said,  “The Criminal Division will take all appropriate action to ensure that the investing public is able to trust the accuracy of the financial statements of companies that avail themselves of American securities exchanges.”

These types of actions are comparable to SEC Whistleblower actions. Under the SEC Whistleblower program individuals who blow the whistle on companies engaging in fraudulent behavior stand to recover an SEC whistleblower award that could range up to 30% of the recover.  Therefore, the SEC whistleblower in this case could have received an SEC whistleblower award of a staggering $41 million dollars.

“Enforcement of the Foreign Corrupt Practices Act is critical in maintaining a fair and competitive international market to which all businesses are entitled,” said Acting Assistant Director Hacker.  “Along with our federal partners and the Department of Justice, the FBI will continue to aggressively investigate violations of the Foreign Corrupt Practices Act.”

According to admissions and court documents, PAC knowingly and willfully caused Panasonic to falsify its books and records through “dummy” consultants  who did little or no actual consulting.  In outstanding work done by the United States Government, The United States Attorney’s Office and the Federal agents (FBI) investigating the matter,  PAC admitted that it mischaracterized these payments as “consultant payments” on its general ledger, which it knew caused Panasonic to incorrectly designate those payments as “selling and general administrative expenses” on Panasonic’s books, records, and accounts.

SEC whistleblowers who know of companies falsifying their books, or who don’t have the best interest of the shareholders in mind are integral in making SEC qui tam cases.

By distorting the payments and providing false representations and Sarbanes-Oxley (SOX) subcertifications to Panasonic about PAC’s financials and financial controls, PAC caused Panasonic to falsify its books, records, and accounts in violation of the FCPA.

In a related proceeding, the U.S. Securities and Exchange Commission (SEC) filed a cease and desist order against Panasonic, who agreed to pay $143 million to the SEC. That makes the the combined total amount by the defendant $280 million, which could have triggered an $84 million dollar whistleblower award if someone blew the SEC whistle on this fraud.

If you know of any Foreign Corrupt Practices Act or need an SEC whistleblower lawyer, call (877) 561-0000 to consult with our firm.  The SEC whistleblower provisions have a mechanism where the whistleblower can potentially stay anonymous from start to finish. The SEC violations could stem from accounting falsifications, cooked books, no show jobs, or any of a variety of violations where the company is falsifying its records to the detriment of the shareholders.  Even if you’re not in the United States and know about these violations you could potentially receive an SEC whistleblowing award for your information.

Three Physicians pay $700,000 to settle FCA violations with drug testing laboratory

Three physicians separately entered deals with the US government to settle allegations that they received improper payments and caused false claims to be submitted to Medicare, United States Attorney Scott W. Brady announced May 8. The allegations remain as such, but the three physicians involved will pay a combined total of $700,000.

Dr. Robert Fetchero, D.O., of Jeannette, Pennsylvania, Dr. Sridhar Pinnamaneni, M.D., of Windermere, Florida, and Dr. Thelma Green-Mack, M.D., of Zionsville, Indiana, referred Medicare patients to Universal Oral Fluid Laboratories (“UOFL”) for drug testing services while allegedly engaged in a financial relationship with the lab. Another doctor who pled guilty on related charges had already begun his 80-month jail sentence in July last year.

Because of the so-called financial relationship between these physicians and UOFL, the latter was able to send claims to Medicare for drug testing services from 2011 to 2014. UOFL paid the involved physicians to refer their patients to the lab for drug tests. The United States alleged that the financial arrangement between the settling physicians and UOFL violated the physician self-referral law, commonly known as the “Stark Law,” and the Anti-Kickback Statute. This, in turn, gave rise to liability under the False Claims Act.

The Stark Law forbids physicians from referring certain health services payable by Medicare to providers that he or she (or an immediate family member) has a financial relationship with, unless an exception applies. The Anti-Kickback Statute bars them from offering, paying, soliciting, or receiving payment to induce referrals of services covered by federal health care programs, such as Medicare. Violating the Stark Law or Anti-Kickback Statute can result in damages and penalties under the False Claims Act that are up to three times the payment earned from the scheme.

“A physician’s medical judgment should never be compromised by improper financial incentives,” said United States Attorney Scott W. Brady in a statement.

The False Claims Act is a powerful statute that enables courageous individuals with inside information to essentially blow the whistle and potentially receive a whistleblower award up to 30% of what the government recovers.  Under the Federal False Claims Act the cases must have some sort of nexus to the Federal government – either overbilling or falsely billing Medicare or Medicaid for example. Certain states like California and Illinois permit the recovery for frauds against private insurance companies as well.

 

If you know of similar arrangements leading to false claims to Medicare, take the first step to correct it. Call Toll Free (877) 561-0000.

Physicians, providers indicted for health care fraud

Over the past week, the United States indicted a number of physicians for allegedly causing fraudulent claims to be submitted to Medicare or Medicaid and to other health insurance entities.

In Pennsylvania, five physicians of Redirections Treatment Advocates, LLC, an opioid addiction treatment practice with offices in Pennsylvania and West Virginia, were charged last week for alleged unlawful dispensing of controlled substances and for having committed health care fraud, Attorney General Jeff Sessions, United States Attorney Scott W. Brady of  the Western District of Pennsylvania and United States Attorney William J. Powell of the Northern District of West Virginia announced on May 1, 2018.

The United States alleged that these physicians, working as contractors at various locations, created and distributed unlawful prescriptions for buprenorphine, known as Subutex and Suboxone, a drug that should be used to treat individuals with addiction.  The government alleged that the physicians caused fraudulent claims to be submitted to Medicare or Medicaid for payments to cover the costs of the unlawfully prescribed buprenorphine.

In Portland around the same time, a federal Grand Jury handed down an indictment charging Abdirashid Ahmed, 38, of Lewiston and Garat Osman, 32, of Auburn, with health care fraud involving the MaineCare program and soliciting and receiving health care kickbacks from May 2015 through December 2017.

According to the indictment, Ahmed sought payments from a MaineCare provider and in return referred some beneficiaries to the provider.

Ahmed and Osman allegedly took beneficiaries to the provider and served as Somali interpreters during the visits.  As a result, fraudulent bills were allegedly submitted to MaineCare, with overstated health and interpreter services. MaineCare reimbursed the provider based on the fraudulent billing.

An indictment is merely an accusation, and a defendant is presumed innocent unless proven guilty in a court of law.

Medicare fraud is still robustly going on, with only a fraction of it being detected and caught. Oftentimes unless a whistleblower comes forward there is no way to find out about illegal kickbacks, overbilling or a variety of other overbilling that may happen.

Under the False Claims Act (FCA), a whistleblower can come forward initially anonymously and collect a whistleblower award up to 30% of what the government recovers under Federal Law and some state statutes provide higher awards.  In order to commence a False Claims Act you must have a whistleblower lawyer.

 

If you know of similar cases of medicare fraud or wrongdoing that could be risking your health on top of unfairly charging our health care, call Toll Free (877) 561-0000.

Tennessee Health Care Executives Charged in $4.6-M kickback scheme

A kickback scheme that allegedly defrauded Medicare and lined the pockets of two health care executives was halted this week by the government. John Davis and Brenda Montgomery, two top executives and owners of health care companies involved in the scheme, were charged not only for the kickback scheme but also for having defrauded Medicare. They were arrested morning of April 9.

The government said that from around June 2011 to June 2017, Montgomery agreed to pay Davis illegal kickbacks in exchange for Medicare referrals for durable medical equipment. Montgomery owns the medical equipment company CCC Medical Inc. Davis, meanwhile, is former CEO of pain management company Comprehensive Pain Specialists (CPS). As head and owner of CPS, Davis allegedly used the CPS to generate need, and sales, for CCC Medical’s durable equipment, in exchange for 60 percent of Medicare proceeds collected on claims for these.

“The charges against John Davis and Brenda Montgomery, alleging almost three quarters of a million dollars in illegal health care kickbacks and the submission of over $4.6 million in fraudulent claims to Medicare, demonstrate the Department of Justice’s commitment to protect taxpayer dollars and to hold corporate executives accountable for fraudulent and abusive conduct,” said Acting Assistant Attorney General Cronan.

The government also charged the two for their efforts to cover up their scheme. These involve making kickback payments through a nominee, creating and filing false tax documents, creating and filing false tax documents, and, for Davis, intervening as CEO to prevent the owners of CPS from obtaining their own Medicare DME supplier numbers that would have allowed CPS to bill for its own Medicare DME orders.

The government said that since around May 2015, Davis and Montgomery renegotiated their illegal agreement to further obscure their personal contract from Medicare and from CPS owners and employees.  This, the government said, resulted in a sham purchase of a shell entity known as ProMed Solutions, LLC. Montgomery allegedly paid $150,000 for this, to induce Davis to continue driving CPS referrals to CCC Medical, the government lawyers said.

All these, so far, are still allegations. Davis and Montgomery are presumed innocent until proven guilty beyond a reasonable doubt in a court of law, the Department of Justice said on April 11.

U.S. Attorney Cochran promised “unrelenting efforts” to bring to justice individuals and corporations who he said choose profit at the expense of the health of those in greatest need.

“Stealing funds from our health care system places the vulnerable at greater risk and diverts public funds into the pockets of the greedy individuals who exploit those with the greatest need,” he said.

Trial Attorney Anthony Burba of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Ryan Raybould of the Middle District of Tennessee are prosecuting the case.

More than 3,500 defendants have previously been charged by the government’s Medicare Fraud Strike Force. These defendants have collectively billed the Medicare program for over $12.5 billion. Private whistleblowers have helped the government achieve this.

 

If you know of similar kickback schemes or moves defrauding Medicare, help put a stop this. Call our Whistleblower Law Firm Toll Free (877) 561-0000

Allergan to pay $3.5-M to settle False Claims Act violations on weight-control device

Allergan Inc., a New Jersey-based seller of a weight-control medical device called LAP-BAND Gastric Banding System, has agreed to pay the US government $3.5 million to resolve False Claims Act (FCA) violations alleged against one of its devices. The LAP-BAND device was approved by the Food and Drug Administration for weight reduction of adult patients who failed to meet their weight target through more conservative weight-reduction measures. But the devices it sold had numerous malfunctions which the company allegedly tried to conceal while continuing to sell it, billing the country’s federal government and Medicare in the process.

LAP-BAND is an inflatable silicone band installed in a patient’s stomach by surgery. This constricts or expands the stomach as needed by adding or removing saline fluid through a subcutaneous access port.

For nearly three years, from January 2008 to November 2010, Allergan knowingly sold LAP-BANDs with flawed access ports, the lawsuit alleged.

“Patients have every right to expect that medical devices used during surgery are free of defects,” said Robert K. Hur, United States Attorney for the District of Maryland. He said patients have the right to expect that medical devices have been subject to the rigorous review and approval process of the Food and Drug Administration.

“When marketing and selling medical devices that may have defects or may be used in unapproved procedures, patients can be put at risk,” Hur emphasized when he announced the settlement with Allergan Monday, April 16.

The United States said in its lawsuit that Allergan misrepresented the cause of access port leaks so health care professionals will continue using the LAP-BAND. On top of this, Allergan failed to gather data and complaint files.  Also, between 2008 and 2012, Allergan allegedly promoted the LAP-BAND for use in two ways that were not approved by the Food and Drug Administration. Some of these were not needed for diagnosing or treating an illness or injury. But to promote LAP-BAND’s use, Allergan allegedly tipped health care professionals with proctoring, workshops, advisory boards, and training events where they discussed or showed the use of LAP-BANDs.

The $3.5 million qui tam settlement resolves the original lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and attain a part of the government’s recovery.  The whistleblowers filed charges in the District of Maryland, where it was captioned as the United States ex rel. Schwartz and Tinsley v. Allergan, CCB-10-2796.  Dr. Schwartz and Mr. Tinsley are set to receive around $594,064 from the settlement; the federal government $3,300,360 and the state Medicaid $199,640.  Relator or whistleblower awards have proliferated in the last decade with billions of dollars of recoveries for the government which generally result in whistleblower awards of around 20% of the amount the government recovered.

The claims resolved in the settlement remain as allegations as there has been no determination of liability.

Allergan Inc. used to be an American company since the 50s. In 2015 a global pharma company Actavis Plc acquired it and continued expanding the company as well as defending it from hostile takeovers. Its earnings as of last quarter of 2017 have increased compared to same period in the previous year. The company’s bottom line totaled $2.17 billion, or $4.86 per share.

 

If you know of similar cases of fraud or wrongdoing risking your health, call our whistleblower lawyers Toll Free (877) 561-0000.

$60 Billion Dollars!!!

If this was a game of jeopardy and that was the answer, the question would be, “How much Medicare Fraud is there per year?”  Even with all the efforts to police Medicare and Medicaid, the government still is stung for an average of $60 billion dollars a year according to an interview Attorney General Jeff Sessions did with the AARP

How much of a whistleblower award could that be?   Technically, under the False Claims Act (FCA) a relator could receive up to 30% of the amount the government receives.  So doing the math, if all that was the result of relators and whistleblowers, there could be $18 Billion dollars a year in whistleblower awards.  More than likely though, the relator share would be around 20% if the government intervenes, so that still would be a lofty $12 Billion dollars available to whistleblowers each year for doing the right thing and blowing the whistle on Medicare Fraud.

Opioids have become a priority for this administration.  Sessions indicated, “Some of the more blatant problems were highlighted in our Medicare fraud takedown recently where we had a sizable number of physicians that were overprescribing opioid pain pills which were not helping people get well, but instead were furthering an addiction being paid for by the federal taxpayers.”

If the case has an opioid nexus and there is false billing, over prescription of opioids leading to addiction and other issues, there’s a strong chance that the government will streamline the case and intervene.

Not every case will win. But you can’t win unless you try.  If you’re wondering, “how do I blow the whistle on Medicare Fraud,” and what are some sample whistleblower awards, you should speak with a whistleblower lawyer to go over your options and find out if you might have a viable case that can serve up a piece of that large pie for doing the right thing.

Florida Pharmacy Charged With Up to $200M False Claims Act Allegations

The Justice Department has joined the lawsuit filed by two former employees turned whistleblowers in Pompano Beach, Florida. Federal prosecutors last week filed a case in Miami, Florida under the False Claims Act against the pharmacy called Patient Care America (PCA) and its Diabetic Care Rx LLC. The federal prosecutors charged the pharmacy of having taken improper reimbursements from TRICARE for the illegal push of its creams and vitamins. TRICARE is a federally-funded health care program for military personnel and their families.

The government is also suing Patrick Smith and Matthew Smith, two pharmacy executives, and the firm that owns and manages the pharmacy, the Riordan, Lewis & Haden Inc. (RLH), a private equity firm based in Los Angeles, California. The firm was founded by former Los Angeles Mayor Richard R. Riordan, but a report said he has long been retired and no longer has a financial interest in the firm based on its public filings.

In its lawsuit, the Justice Department alleged that the pharmacy, its two executives and the firm that owns and manages it paid illegal kickbacks to make TRICARE beneficiaries receive prescriptions for compounded pain creams, scar creams, and vitamins, whether or not the patients needed it for medical reasons.

The government claimed that the pharmacy and its marketers manipulated the compound formulas to obtain the maximum possible reimbursement from TRICARE. As a result, the Patient Care America raked in millions from doubtful reimbursements with TRICARE in just eight months from 2014 to 2015. The complaint alleged that the defendants and the marketers shared in the profits from the scheme.

Two former employees of Patient Care America first complained about the pharmacy’s kickback scheme in a False Claims Act filed in 2015. The lawsuit, United States ex rel. Medrano and Lopez v. Diabetic Care Rx, LLC dba Patient Care America, et al., No. 15-CV-62617 (S.D. Fla.), was first filed in the U.S. District Court for the Southern District of Florida by Marisela Medrano and Ada Lopez. The two former employees filed it under the qui tam or whistleblower provisions of the False Claims Act, which permit private parties to sue for false claims against of the United States and to receive a share of any recovery.  The Act permits the United States to intervene in such lawsuits, as the United States has done in this case.

The False Claims Act allows the government to seek payment of three times the proven actual damages. Patient Care America and the involved owner and executives might have to pay the US government more than $200 million in tainted reimbursements with TRICARE if federal prosecutors prevail.   The whistleblowers also known as relators are entitled to a portion of the recovery under the False Claims Act and whistleblower settlements under the federal statute can total  up to 25% of the amount the government actually recovers, so theoretically, the whistleblower award here can be as high as $50 million dollars.

This case was investigated by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Southern District of Florida, the Defense Criminal Investigative Service, the U.S. Food and Drug Administration’s Office of Criminal Investigations, and the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit.

“Providers and marketers that engage in kickback schemes drive up the cost of health care because they focus on their own bottom line instead of what is in the best interest of patients,” said Executive Assistant Randy Hummel of the United States Attorney’s Office for the Southern District of Florida.  “We will hold pharmacies, and those companies that manage them, responsible for using kickbacks to line their pockets at the expense of taxpayers and federal health care beneficiaries.”

Memphis Operator of Spring Gate nursing home settles FCA allegations with half a million dollars, integrity deal

A concerned nephew turned whistleblower succeeded at helping the residents of a large nursing home in Tennessee address complaints of substandard, unhealthy services. His whistleblower lawsuit also helped the United States and the State of Tennessee investigate and address allegations that the large nursing home allegedly fraudulently billed Medicare.

In 2015, Chris Godwin filed a lawsuit against Spring Gate under the qui tam provisions of the False Claims Act (FCA). It permits persons like him to sue on behalf of the government as a relator to recover the submission of false claims and share in the recovery. The False Claims Act gives the US government a cause of action against any person or entity that knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval. The provisions of the False Claims Act permit a whistleblower to receive an award up to 30% of the amount recovered. The last decade showered record amounts of qui tam awards which aggregated in the billion dollar range.

Based on his filed case, Godwin acted out of concern for his aunt (now deceased). He observed a deterioration in his aunt’s health in 2013 after the nursing home allegedly made her take psychoactive drugs. He subsequently learned more about the substandard nursing services from the experience of his aunt as a resident there, from his talks with the nursing home staff and from his investigation into the situation of other residents.

Combined with the findings of the government, they alleged that from 2012 to 2015, Spring Gate provided substandard and worthless nursing home services to residents. Spring Gate is a large facility with more than 200 beds. It has a for-profit, corporate ownership.

“By relying on psychoactive drugs as a substitute for actual, skilled nursing care, and then billing Medicare for that care, Spring Gate has fraudulently billed the United States for worthless services,” Godwin’s case said.

 

 

 

 

 

 

Under federal and state law, Medicare and Tenncare will not pay for services deemed so deficient that they are essentially worthless.

The whistleblower’s case was captioned United States of America and the State of Tennessee ex rel. Chris Godwin v. Memphis Operator, LLC (d/b/a Spring Gate Rehabilitation and Healthcare Center). Vericare Management, Inc. and PharMerica Corporation, No. 2:15-cv-2090 (W.D.Tenn.). The Justice Department said Spring Gate cooperated to resolve the matter.

As a result, the Justice Department announced early this month (February 2) that Memphis Operator, LLC, owner of Spring Gate Rehabilitation and Healthcare Center, will pay $500,000 to the United States and the State of Tennessee. The deal resolves the allegations of false claims to Medicare and Tenncare. Although the company will pay, the settlement says it has not been deemed liable for the allegations that provided substandard and worthless services to residents of Spring Gate and violated some requirements expected to be met by skilled nursing facilities.

Whistleblower Attorney Jason T. Brown commented, “This is another positive outcome obtained by the government with the assistance of a whistleblower and private qui tam counsel. These cases are made possible through the integrity of good people who come forward with their qui tam complaints and work with the government to hold entities accountable.”

Aside from the $500,000 settlement, Spring Gate signed a Corporate Integrity Agreement with the Department of Health and Human Services’ Office of Inspector General to prevent future unlawful conduct. Qui tam cases have become increasingly challenging in recent years with some courts ruling that a whistleblower needs to be on the inside, not merely a patient of a medical facility. Still, with specific enough facts a patient or client can proceed with their claim, but under the Qui Tam provisions must use a whistleblower law firm to commence an action.

“Residents of nursing homes are some of our most vulnerable citizens. When nursing homes break the law by defrauding the government for substandard or worthless services we will use our resources to combat this fraud and hold them accountable,” said D. Michael Dunavant, United States Attorney for the Western District of Tennessee.

The United States Department of Health and Human Services Office of the Inspector General, the Tennessee Bureau of Investigation and the Tennessee State Attorney General’s Office conducted the investigation. On behalf of the government, Assistant United States Attorneys Stuart J. Canale and Matt Waldrop and Steve Jobe, Senior Counsel for the Tennessee Attorney General, prosecuted the case.

If you have knowledge of nursing homefraud endangering our vulnerable citizens or other types of Medicare Fraud or Medicaid Fraud, click here for info on what you can do.

US Obtains a $16.2 Million Judgment for MRI provider’s False Claims Act Violations

Richard Pfarr and the Orthopedic and Neuro Imaging LLC (ONI) he owns were held liable in the U.S. District Court in Delaware for having submitted fraudulent claims to Medicare. The Court granted the United States’ request for a default judgment against ONI and Pfarr. In its complaint, it said ONI knowingly submitted false claims to Medicare by administering contrast dye during magnetic resonance imaging (MRI) scans on patients without proper supervision by a physician. Contrast dye is a chemical injected into the body to make certain tissues more clearly visible on an MRI.

“This case exemplifies the utility of the False Claims Act to deter fraudulent conduct, protect patient safety, and save taxpayer dollars,” said Acting U.S. Attorney David C. Weiss. ONI operates independent diagnostic testing facilities (IDTFs) in Delaware and Maryland. The lawsuit contended that ONI injected dyes into 1,700 Medicare patients from 2003 to 2014 without direct supervision by a physician. The suits said ONI received more than $1 million from Medicare for scans, images and tests.

 

 

 

 

 

 

 

 

 

 

 

The government’s case took off from a whistleblower’s lawsuit filed by Robin White in 2013. A former employee of ONI. White filed the suit under the qui tam provisions of the False Claims Act (FCA). It permits private parties to sue on behalf of the United States for false claims on government funds, and to receive a share of any recovery. The private plaintiff relates the case to the governments interest and is referred to as a relator. The False Claims Act permits the government to intervene in such a lawsuit, as the government did in ONI’s case. Ms. White will receive a whistleblower award of 18 percent of the recovered funds, if any. Whistleblower awards could be in the tens of millions and are judged on a multitude of factors including cooperation of the whistleblower, and their utility in the investigation. Commencing a qui tam action requires the use of a whistleblower lawyer.

The US government intervened in the False Claims Act lawsuit September last year. The matter was investigated by the U.S. Attorney’s Office for the District of Delaware, the U.S. Department of Health and Human Services Office of Inspector General, and the FBI. Assistant U.S. Attorneys Jennifer L. Hall and Laura Hatcher handled the case on behalf of the United States.

The case is captioned United States ex rel. White v. Orthopaedic and Neuro Imaging LLC, No. 13-1109-RGA.

Tampa’s biggest ambulance provider to pay $5.5 million to settle False Claims Act claims

The biggest provider of ambulance services in Tampa, Florida entered an agreement with the US government this week to settle allegations that it violated the False Claims Act (FCA). In a statement on January 30, the Department of Justice said the AmeriCare Ambulance Service, Inc. and its sister company, AmeriCare ALS, Inc. (collectively, AmeriCare), have agreed to pay around $5.5 million to resolve claims that it defrauded Medicare by billing for medically unnecessary ambulance transportation services.

The settlement concludes a lawsuit first filed by Ernest Sharpe, a former paramedic in AmeriCare. He filed the lawsuit in 2013 under the qui tam, or whistleblower, provisions of the False Claims Act that permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The Act also allows the government to intervene and take over the action, as it did in this case in 2017. Mr Sharpe as whistleblower will receive roughly $1.15 million of the $5.5 million recoveries from AmeriCare. Whistleblower awards have skyrocketed over the last decade as the government is clamping down on health care fraud and handsomely giving qui tam awards to people who blow the whistle in the correct manner.  To blow the whistle under the False Claims Act, one needs a whistleblower lawyer, preferably one experienced in combatting Medicare Fraud.

Based on Sharpe’s lawsuit and the complaint subsequently filed by the US government against AmeriCare, the latter had allegedly engaged in a systemic practice – over many years – of submitting fraudulent claims to the government. With the whistleblower, the government investigators amassed damaging testimonies from members of AmeriCare’s management team. These, along with other evidence obtained by the government, reportedly showed that from January 2008 through December 2016, AmeriCare fraudulently billed Medicare and TRICARE. They also found out that AmeriCare had produced thousands of false reports and other documentation during this period, to prop up the claims to Medicare.

Although the settlement states that the allegations against AmeriCare remain as such, it agreed to pay around $5.5 million and allowed itself to enter into an integrity agreement with the Inspector General of the U.S. Department of Health and Human Services.   Whistleblower Attorney Jason T. Brown commented, “This is another excellent result obtained by the government with the assistance of a whistleblower and private qui tam counsel.  The companies rarely admit guilt, but the money speaks volumes.”

US Attorney Chapa Lopez said the lawsuit and the week’s settlement speak for the office’s ongoing efforts to safeguard federal health care program beneficiaries from the effects of this type of unlawful conduct. The DOJ highlighted the government’s efforts against health care fraud, where it considers the help of whistleblowers under the False Claims Act as one of their most powerful tools.

Although the settlement resolves the case, it did not say that AmeriCare has been determined as liable. The claims against in remain as allegations. The case is captioned United States, et al. ex rel. Sharpe v. AmeriCare Ambulance, Case No. 8:13-cv-1171-T-33AEP.

The settlement resulted from the coordinated effort of the U.S. Attorney’s Office for the Middle District of Florida and the HHS-OIG and the Defense Criminal Investigative Service. Assistant United States Attorney Christopher P. Tuite handled the case.

Pain clinic operator pays more than $1.45-million to settle False Claims Act violations

A whistleblower helped the government save lives and protect taxpayers’ money in Tennessee last week. U.S. Attorney General Jeff Sessions and U.S. Attorney Don Cochran of the Middle District of Tennessee announced that a chiropractor operating pain clinics from Lenior City, Tennessee has paid $1.45 million, plus interest, to resolve False Claims Act violations. Under the same settlement, a pain clinic nurse in Cookeville, Tennessee is to pay $32,000 and surrender her DEA registration to settle allegations that she violated the Controlled Substances Act.

“More Americans are dying because of drugs today than ever before—a trend that is being driven by opioids,” said Attorney General Jeff Sessions. “If we’re going to end this unprecedented drug crisis, which is claiming the lives of 64,000 Americans each year, doctors must stop over-prescribing opioids and law enforcement must aggressively pursue those medical professionals who act in their own financial interests, at the expense of their patients’ best interests. “

Vowing to fight opioid abuse “on all fronts,” U.S. Attorney Cochran recognized the help in this case of a whistleblower.  The United States and Tennessee began to investigate in March 2016 after a former office manager for the Cookeville Center for Pain Management filed a qui tam lawsuit against Matthew Anderson and his management company, PMC LLC.

The qui tam, or whistleblower, provisions of the False Claims Act allow private citizens with knowledge of false claims to bring civil suits on behalf of the government and to share in any recovery.  In this more than $1.45 million settlement, the whistleblower will get $246,500 and other amounts under the settlements with Scott and the three pain clinics.  Whistleblowers stand to receive significant awards under the False Claims Act which could be up to 30% of the amount recovered for the taxpayers.

Anderson and PMC LLC operated four pain clinics in Tennessee, most recently known as Cookeville Center for Pain Management; Spinal Pain Solutions in Harriman; Preferred Pain Center of Grundy County in Gruetli Laager; and McMinnville Pain Relief Center.   All these clinics have now closed. Anderson allegedly reaped over $5 million from the four pain clinics, and took over 90 percent of the pain clinics’ profits.

Anderson and PMC resolved in the settlement the governments’ claims that from 2011 through 2014, they caused pharmacies to request for Medicare and TennCare payments for painkillers, including opioids, without valid medical purpose.

It also resolved allegations about Anderson’s too high reimbursements for office visits, and the PMC’s claims on Medicare for nurse services in 2011 and 2012 that failed to abide by the Tennessee law.

The case was handled by the United States Attorney’s Office for the Middle District of Tennessee and the Tennessee Attorney General’s Office and investigated by the Department of Health and Human Services – Office of Inspector General and the Tennessee Bureau of Investigation Medicaid Fraud Control Unit.  Assistant U.S. Attorney Ellen Bowden McIntyre represented the United States, and Assistant Attorney General Philip Bangle represented the State of Tennessee.

There is a prioritization of opioid litigation as the crisis has reached epidemic proportions.  Opioid Qui Tam litigation has become increasingly prevalent to combat the crisis.  Oftentimes, these doctors or clinics are called “pill pushers” or “Dr. Feelgoods” and although one could conceivably blow the whistle as an opioid user, the False Claims Act (FCA) contemplates recovery for mainly insiders with specific information of fraud against the government.   Victims of opioid addiction who have had their lives ruined by the drugs may have other avenues to bring litigation against the drug manufacturers and the opioid prescribers.

The case is docketed as United States ex rel. Norris v. Anderson, No. 3:12-cv-00035 (M.D. Tenn.).  The settlement resolved the case but Anderson or PMC had not admitted any liability.

Medical Device Company to Pay $7.62 Million Over False Claims on TRICARE

The Department of Justice hailed the False Claims Act (FCA) for proving yet again as a powerful tool in combating health fraud.  Through tips and complaints from all sources, the DOJ is successfully going after potential fraud, waste, abuse, and mismanagement. Last January 23, it concluded a settlement for one of such cases.

The Department of Justice said that DJO Global Inc. (DJO), a medical device company headquartered in Vista, California, has agreed to pay $7.62 million to resolve allegations that its subsidiary, Empi Inc., a now-defunct medical device company based in Shoreview, Minnesota, submitted false claims to TRICARE for excessive, unnecessary transcutaneous electrical nerve stimulation (TENS) electrodes that TRICARE beneficiaries did not need or use.  TENS is a therapy that uses low-voltage electrical current for pain relief.

DJO shut down Empi in November 2015. But before that, from 2010 to 2015, Empi allegedly used “assumptive selling” to persuade the TRICARE beneficiaries to seek and accept unjustifiably large quantities of TENS electrodes. Its use rose steeply with more beneficiaries receiving unnecessary quantities in 2014 to 2015.

With this selling technique, the Empi sales representatives contacting TRICARE beneficiaries and prompted them to order excessive TENS electrodes by acting as though the beneficiaries had shown a need for them, when that may not have been the case.

Oftentimes these cases are filed through a whistleblower who stands to receive a whistleblower award for their information.  The whistleblower also known as a relator, files the False Claims Act action which is often referred to as whistleblower or qui tam lawsuits.  Qui Tam law is an interesting area of practice and one in which a plaintiff may not file pro se, that is they need a whistleblower lawyer or qui tam law firm to assist and as a prerequisite to file.  In a case like DJO a whistleblower could received up to 30% and thus a sample qui tam award would be $2.28 million dollars for providing information.

TRICARE is a federal health care program providing medical care and services to those in the military and their families. United States Attorney Gregory G. Brooker said the $7.6 million settlement underscores their commitment to protecting the integrity of federal health care programs and that it sends a strong message of accountability to those who would seek to take advantage of those programs.

The case was handled by the Civil Frauds Unit of the U.S. Attorney’s Office for the District of Minnesota, the Justice Department’s Commercial Litigation Branch, and the Department of Defense Office of the Inspector General. The settlement concluded the case but DJO did not admit liability.

3.7 Billion Dollars Recovered via the False Claims Act in 2017

Benjamin Franklin once said there’s only two certain things death and taxes, well we can add a third to the list which is fraud against the government.  In 2017, the Federal Government recaptured over $3.7 billion dollars via the False Claims Act (FCA), also known as qui tam actions.  Relators, also known as whistle blowers generally stand to receive up to 30% of the recovery, but generally more like 20%, so doing the math courageous people who blew the whistle obtained roughly $750 million dollars for doing the right thing.  This figure is down from 2016 by almost a billion dollars as defendants have dug in to fight some of the fraud using legal technicalities and sometimes find receptive courts to dismiss these actions.  However, one shouldn’t read too much into this as whistleblower awards in 2014 were an all-time high at 6.15 billion which equates to nearly a billion for the whistleblowers themselves and the trend since 2010 was over $3 Billion in recoveries per year.

A whistleblower may ask many questions such as: How Do I blow the whistle?  What can I blow the whistle on?  Am I protected as a whistleblower?  How do I file a whistleblower lawsuit?

In order to blow the whistle and file a qui tam or False Claims Act, the Courts have held you need to do so through a lawyer and one should generally seek a qui tam law firm who focuses on whistleblower actions.  You can blow the whistle generally when you have inside information that someone is defrauding the government.  Some of the most common areas are Medicare fraud, Medicaid fraud, and defense Contractor Fraud.  An entirely separate area of practice and very actionable in addition to the billions recovered via the False Claims Act is the SEC Whistleblower program which also results in large recoveries for the people and the whistleblower when successful.

The Courts and the government look to people with inside information to come forward so generally a consumer without insider information will not succeed under the False Claims Act, but that is not always the case, so if one suspects fraud as a consumer there may be a myriad of ways to tackle the issue.

With the maze of Medicare regulations, some companies take short cuts to get even, but many others do so to just plain get ahead, hurting the taxpayers and the system as a whole.  Most Qui Tam Lawyers will consult with clients confidentially and if a person doesn’t want to proceed with their false claims act lawsuit, will keep the matter confidential indefinitely.

Attorney Jason T. Brown, a former FBI Special Agent who now manages a law firm that reportedly has dozens of qui tam cases filed under seal said, “The government is by the people and for the people, and relies on the integrity of the courageous people to come forth and do what’s right to end fraud and abuse.  Plus people who come forward could potentially receive big whistleblower awards for doing the right thing, but that should be incidental to knowing that you’re alerting the government to illegal practices such as overbilling Medicare or defrauding Medicaid.”  Although his practice focuses on whistleblower cases, he cautions people not to take matters into their own hands.  “Consult an experience qui tam law firm first.  Too many times we receive cases where the individual retains qui tam counsel too late and jeopardizes the false claims act investigation and case.  We protect whistleblowers the best we can, but to do so it’s critical that if you know information about overbilling the government you bring the right team in sooner rather than later.”

With the Donald Trump administration prioritizing opioid litigation, there are plenty of cases with opioid over-prescription, medically unnecessary prescriptions and a multitude of other issues that may dovetail into an opioid whistleblower action.  The new administration also has an eye on reducing fraud in and against the government, so 2018 should continue to be another big year for qui tam actions.

Cryptocurrency Litigation Heating up for 2018

In 2017 Cryptocurrencies have heated up with unheard of gains with some currencies seemingly a thousand times its investment.   As of the beginning of 2018 there is approximately 700 Billion Dollars in the various cryptocurrencies! (https://coinmarketcap.com/all/views/all/)

But with big bucks come big scams.  Consumers beware, it is a known fact entities are able to tinker with and manipulate the markets.  Further, there are companies that prey upon greed and there are derivative products such as “mining pools” and “mining contracts” that lack transparency, accountability and could in reality just be a ponzi scheme.  Some of these Bitcoin mining or other cryptocurrency ideas can even be found on popular sites like Ebay.

 

Many of these may be actionable under the law.   Some of these will be actionable under the SEC Whistleblower Cryptocurrency Guidelines.  They include:

  • Bitcoin Clubs
  • Initial Coin Offerings (ICO’s) with false representations or improper solicitations
  • Bitcoin Mining Contracts
  • Other Block Chain Mining Contracts

If you have been scammed or know inside information about a cryptocurrency our cryptocurrency lawyers want to hear from you.  We take most cases on contingency, meaning we’re only paid if we win your case.  Call us at (877) 561-0000 or click here to speak with how we can assist in your case.

To give an idea of the different cryptocurrenices out there – here is the snapshot of the Bitcoin daily price as well as the other cryptocurrency daily price as of this morning for the top twenty coins:

Hopkins prioritizes revenues first, Maryland patients second – Qui Tam whistleblower

In a line of incoming patients, a resident of Baltimore is likely the last to get an early appointment for expensive health services at John Hopkins Health System Corporation, compared to others from outside Maryland. In a case recently unsealed, a former employee of John Hopkins Health System Corporation alleged that the hospital is doing it for profit and in the process violating the Federal False Claims Act (FCA).

Anthony C. Campos, Hopkins’ Director of Patient Access Operations from December 2011 to January 31, 2017, filed a case in Baltimore under the qui tam provisions of the Federal False Claims Act.

Campos gave details to the allegedly intentional violation of the hospital of the two agreements that regulate its revenues. In 2014, Hopkins entered into the Maryland All Payer Model Agreement with the Centers for Medicare and Medicaid and the State of Maryland, and the Global Budget Agreement with the Health Service Cost Review Commission acting on behalf of Maryland. These set down conditions for payment and reimbursement by Medicare and Maryland Medicaid, as well as caps on how much it should earn from Maryland patients. Every year it has a predetermined revenue based on previous record, regardless of how many patients from Maryland it would actually serve.

Based on Campos’ case filing, his job since 2014 evolved into giving priority access to patients who were not from Maryland. This was allegedly as directed by his superiors and regardless of clinical urgency or necessity. The reason was the hospital’s target revenue. The hospital’s cap in revenue according to the Model Agreement or the Global Budget Agreement Revenues does not cover that from non-Maryland patients.

Campos detailed in his lawsuit how senior leaders at the hospital system began to push for more out-of-state patient revenue in 2015, and would at times prioritize these patients without considering who was the most in need of care. He said at first it was just a matter of “filling the boat” or ensuring the hospital is serving more patients. But by 2015 the hospital organized its system to give priority access to “the right passengers” and these passengers are those from outside of Maryland.

Campos said that because of Hopkin’s scheduling priority, doctors and medical office coordinators raised complaints and concerns. As early as February 2015, Campos had notified his supervisor of the doctors’ complaints, he said. But his supervisor just advised him that the senior management had specifically asked the Department of Patient Access to make out-of-state prioritization and as such, the department was required to do it.

In the quarterly meetings with senior management, Campos said a doctor had also raised concerns about the scheduling and priority access to the hospital’s top executives, but the latter did not respond.

“Hopkins’s knowing and deliberate failure to disclose these practices amounts to a false or fraudulent implied representations and/or certifications that it has complied with the material requirements and conditions for payment,” according to the lawsuit.

In a statement, Hopkins said, “Safe and high-quality care for all patients, regardless of where they live, is our number one priority.”

Disarrayed Deeds, Dirty Doctors & Deceitful Debits

No one starts off wanting to become a habitual drug user.  Often times it happens from experimentation, peer pressure and after persistent usage addiction.  We are in an Opioid crisis in this country where the addicts can’t even come to the first stage of recovery which is awareness, and when we blog about the topic invariably people write us to tell us to stop tackling Opioid abuse and not to take away their drugs!

Just like no one wants to be an addict, but there’s plenty of them, I like to believe that no one starts off wanting to defraud the government, but there’s plenty of that as well.  Medical Doctors who submit false claims to the federal government could be liable for up to three times the fraud in damages, and people who blow the whistle on dirty doctors could receive up to 30% as a whistleblower award, which could be a considerable sum.  The provisions of the False Claims Act (FCA) provide for that type of recovery, but they also mandate that the whistle blower also known as a relator obtain a qui tam lawyer to file their claim.

So in the spirit of Star Wars which is coming out this week – how do Doctors go to the Dark Side?

Let’s say for example a Doctor in New York is overbilling Medicare by using a wrong code.  That New York Doctor’s False Claims may have started innocently enough with the frustration of the labyrinth of regulations from the government.  They may have continually been rejected for what they believed was rightful billing for a certain code and found out that a similar code pays the same with minimal efforts if they use the right buzz words. Sounds fair?  On a certain sense it may be, but of course, now we have lying on a patient’s charts for billing purposes and less accountability, but perhaps most people would share the Doctor’s frustrations and perhaps the Doctor would seem sympathetic even though he or she is technically falsely billing Medicare.

Let’s then take this a step further and let’s suppose the Doctor has a practice that extends into New Jersey and Pennsylvania and he continues the Medicare Fraud in those states, but is technically staying even with the billing, but then he determines that his Medicare biller can obtain more for the practice if they bill everything through the New York office and the New Jersey False Claims are now moved to New York for a higher level of compensation.  The Doctor justifies this slightly higher level of reimbursement based on the additional time and staff the practice needs to hire to deal with the Medicare and Medicaid regulations.  Sounds fair?  I think this New Jersey, New York and Pennsylvania False Claim would start to offend some, but others might accept the moral rationalization for committing this Medicare and possibly Medicaid Fraud.

Once the Doctor has accepted that he can commit a false claim and feels justified to obtaining more than the correct compensation, the boundary is now set by his or her own need for greed and may justify it other ways, such as the practice is now growing to Illinois and California, and even though he’s overbilling the government, he’s creating jobs, and helping the economy and healing people – but hurting the taxpayer in the process.  Often times once the moral barriers are removed, the floodgates for fraud open up and the fraudulent billing extends to the extent that it can go undetected.

But nothing lasts forever.  There’s that Qui Tam statute, also known as a False Claims Act (FCA) and people who are hired within the practice are governed by what is right, not blind loyalty to the Doctor. People may ask themselves, how do I find the right Qui Tam Lawyer, what is a False Claims Act law firm, are there localized firms such as a New Jersey Whistle Blower Law Firm, do I need a Qui Tam lawyer from each site, for example an Illinois False Claims Act Attorney?  Generally, there are lawyers that focus a part of their practice to handling False Claims Act litigation.  The FCA while potent, requires navigation and commitment.  The whistleblower who has the courage to come forth, stands to receive a whistleblowing award up to 30% of the amount recovered for the government, but there’s work that goes into that such as filing the complaint properly under seal, being prepare for the relator interview and a commitment to see it from start to finish while abiding by the secretive qui tam rules.

When the whistle blower is ready he or she consults with the lawyer and determines there are violations of:

The False Claims Act (FCA)

Illinois False Claims Act – (740 ILCS 175/1) (from Ch. 127, par. 4101)

New Jersey False Claims Act – § 2A:32C-1

New York False Claims Act – Chapter 56. Of the Consolidated Laws Article XIII. New York False Claims Act § 187. Short title

Chicago False Claims Act – Chapter 1-22

New York City False Claims Act – §7-801

Philadelphia False Claims Act – § 19-3601

Each statute providing for its own proofs, notice and damages.  That’s a litany of litigation for what may have started as a Doctor’s dream to get even, but then twisting it to get ahead.

 

Medicare Fraud: Hospices Penalized Millions

 

Medicare funds spent on hospice care has spiked aggressively in the last decade, reaching a staggering $15.1 billion per year in 2012. As it turns out, some of this increased spending was due to fraud committed by hospices to render unnecessary services, and then bill Medicare for them.

 

Under Medicare regulations, hospices are only paid for the admission and care of beneficiaries who are terminally ill, which is defined to mean having a life expectancy of six months or fewer. However, hospices have been taking advantage of Medicare by admitting patients who are in good health, and then re-admitting them after they inevitably survive for more than six months. What is supposed to be a one-time palliative expense balloons into repeated payments, costing Medicare and taxpayers untold sums of wasted spending. Furthermore, in many cases the hospice patients actually receive inadequate care. Instead of upholding their duty to care for some of the most vulnerable Americans, these offending hospices are merely exploiting the elderly for their own financial gain.

 

To combat this widespread abuse, the federal government has become more aggressive in pursuing claims of hospice fraud. In 2017 alone, the government has already settled for hundreds of millions of dollars in hospice fraud litigation brought forth by whistle-blowers. Some of the bigger fish netted include Chemed, which will pay $75 million, and Genesis Healthcare, which will pay $53.6 million. These cases were only settled because of the efforts of the hospice employees who were willing to come forward as whistle-blowers.

 

Hospice workers who notice that their employers are intentionally, or even recklessly, admitting patients with longer than six months life expectancy can save Medicare millions of dollars by contacting a qualified qui tam attorney. In addition, to incentive transparency, the government may award up to 30 percent of the penalties it collects to these hospice whistle-blowers, but the complaint must be filed through a hospice fraud attorney.  That is to commence a proper Qui Tam and to protect you along the way, the law mandates you have a whistleblower lawyer.

Another Company, Another Cover-Up

Uber, the pioneer in ride-sharing may have innovated what gets you from here to there, but there’s nothing innovative about how it handled a hacker who allegedly stole 57 million users information – IT COVERED IT UP!  According to Bloomberg News, in October 2016 hackers stole data from the company that included its users telephone numbers and driver’s license information and Failed to Disclose the data breach to its customers.  Instead, the company paid hackers $100,000 to on their honor delete the compromised data.   It’s not clear if they paid the extortion with bitcoins or some other cryptocurrency, but it is clear they did not do right to their customers whose information may have been compromised and by waiting for over a year for this to be disclosed it suggests deep integrity issues over there.  Further, it’s users still haven’t been properly notified.

The irony of the cover-up is at the same time they were negotiating with regulators from the United States amidst privacy concerns and were smack dab in the middle of litigation with its drivers over Fair Labor Standards Act (FLSA) violations for classifying its drivers as independent contractors rather than employees.  In the thick of discovery for these processes and some very front page news regarding management having issues, the cover up was well on its way.

Oftentimes the cover up is worse than the underlying item they’re worried about, and in this case it might or might not be.  I mean, after all, if you take the hackers at their word, I’m sure they just deleted all the information they stole.  A crime motivated by profit wouldn’t continue to profit by keeping a set of the data would it?

Perhaps, UBER hid behind the fact that it had an arbitration clause and for a period of time that clause which seeks to kill consumer class actions was found unenforceable and they wanted to wait that out with deliberate recklessness towards its customers.  But then how does one hold a major company accountable when an individual may only have a few hundred dollars or a few thousand dollars’ worth of damages, and the cost for admission to arbitrate may be to pay the arbitrator $500 an hour to privately and individually judge that claim? The inequity of arbitration.

It should be interesting to read how this plays out over the coming months. Hopefully, there will be some industrious ways to hold UBER accountable, or perhaps some courageous whistleblower will step forward and blow the whistle on what really went on.

I guess for now UBER which in Latin means abundance doesn’t refer to the fact that you can obtain a ride anywhere, but that thanks to them your data may be everywhere.  And its users who rely on them to safeguard their information through Fides et Justitia (faith and justice), now need UBER to do something for people to regain its trust or else justice will claim another nascent company who is up to old tricks.

 

False Claims Act (FCA) Suits Against Lockheed Martin Units Combined

In Wisconsin a judge combined False Claims Act suits alleging Lockheed Martin of artificially inflating the cost of parts causing the government to pay millions in overpayments.   In the defense contractor world overbilling the federal government is a notorious issue that often goes unchecked costing the taxpayers billions of dollars a year.  Whistleblowers initiate False Claims Act (FCA) lawsuits through their qui tam attorneys in an effort to hold the companies accountable and recoup the government’s losses.  The whistleblowers stand to gain up to 30% of the amount recovered for the government if it does not intervene, 25% if it does and generally around 20% is a common whistleblower award.

Two Lockheed Martin subsidiaries Sikorsky Support Services Inc. and Derco Aeropsace were sufficiently similar to warrant a consolidated docket for purposes of the qui tam litigation.  False Claims Act litigation is critical to policing private entities in its interaction with the government since whistleblowers often can provide insight that the government could not obtain otherwise and often the government is stretched thin and relies on whistleblower counsel and the relator to assist.  The two cases were filed under seal which is the proper mechanism for commencing a qui tam action.  They were unsealed in 2014 and then in 2017.  The allegations are that pursuant to the government contract the United States was supposed to pay a fixed price for certain parts, but since many parts weren’t articulated, the defendants allegedly hiked the prices by over 30%.

Lockheed Martin indicated it intended to vigorously defend the allegations and that it did not overbill the government, but did not comment on the procedural consolidation of cases.   Whistleblower cases have grown more prominently over the last decade with the False Claims Act statute coming under attack by defendants who claims it is overused.  The mounting awards given to relators have caused many whistleblowers to come forward to try and hold companies accountable for government fraud where the relator award sometimes could be in the hundreds of millions.

Drug maker Novo Nordisk to pay $58 M to settle complaints of ‘dishonest’ marketing

Drug manufacturer Novo Nordisk Inc. has agreed to pay a total of $58.65 million to settle allegations that it misled doctors to boost sales of its diabetes drug Victoza. Novo Nordisk is a Danish company that generates most of its revenues from diabetes drugs. Its headquarters in the U.S. is in Plainsboro, New Jersey. The federal investigation into its marketing and sales practices began in February 2011.

The Justice Department said their resolution with Novo Nordisk includes the latter having to pay the US government $12.15 million for alleged violations of the Federal Food, Drug, and Cosmetic Act (FDCA) from 2010 to 2012 and another $46.5 million for alleged violations of the False Claims Act (FCA) from 2010 to 2014.

Under the False Claims Act (FCA) settlement, the federal government stands to receive more than $43 million and state Medicaid programs more than $3 million. The Medicaid program is funded jointly by the state and federal governments. Novo Novartis said the settlement would not threaten their solvency. Its shares remain healthy and looking up by October 3, a month after they announced the settlement. The deal does not mention how much the whistleblowers would receive.

Both the Justice Department and Novo Nordisk said in separate statements the settlement also resolved seven lawsuits filed under the whistleblower provision of the federal FCA, which allows private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery.

The U.S. Department of Health & Human Services, Office of Inspector General, determined that it would not seek a Corporate Integrity Agreement as part of this settlement.

Illegal marketing moves

In the government’s civil complaint filed early last month, it detailed Novo Nordisk’s marketing tactics that render the drug “misbranded under the law.”

It said that when the Food and Drug Administration (FDA) approved the diabetes drug Victoza in 2010, the FDA required Novo Nordisk to disclose the drug’s potential risk of Medullary Thyroid Carcinoma (MTC) to doctors. But the drug manufacturer allegedly failed to comply because, on the contrary, it instructed its sales representatives to obscure the risk and to impress on doctors that the required disclosure on Victoza’s risk is “erroneous, irrelevant, or unimportant.”

“We need to trust that pharmaceutical companies truthfully represent their products’ potential risks,” said Special Agent in Charge Nick DiGiulio for the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG).

The government said Novo Nordisk also did not modify its risk evaluation and mitigation strategy for Victoza even when told to do so. In 2011, they had polled doctors and found out that half of them were unaware of Victoza’s potential risk for MTC.

On top of all these, Novo Nordisk allegedly encouraged the sale to and use of Victoza by adult patients who did not have Type II diabetes. The Food and Drug Administration (FDA) has not approved Victoza as safe and effective for use by adult patients who do not have Type II diabetes.

The parties said the settlement is just a way for them to avoid the delay, uncertainty, inconvenience, and expense of protracted litigation. It clarified that the allegations would remain as such.

The seven civil lawsuits resolved in the settlement are as follows: United States, et al. ex rel. Kennedy, v. Novo A/S, et al., No. 13-cv-01529 (D.D.C.), United States, et al. ex rel. Dastous, et al. v. Novo Nordisk, No. 11-cv-01662 (D.D.C), United States, et al., ex rel. Ferrara and Kelling v Novo Nordisk, Inc., et al., No. 1:11-cv-00074 (D.D.C.), United States, et al., ex rel. Myers v. Novo Nordisk, Inc., No. 11-cv-1596 (D.D.C.), United States, et al. ex rel Stepe v. Novo Nordisk, Inc., No. 13-cv-221 (D.D.C.), United States et al. ex rel Doe, et al. v. Novo Nordisk, Inc., et al., No. 1:17-00791 (D.D.C.), and United States ex rel. Smith, et al. v. Novo Nordisk, Inc., Civ. Action No. 16-1605 (D.D.C.). #

 

 

New Jersey Whistleblower Receives $9.4 Million-dollar Whistleblower Award for Alleged Mortgage Fraud

On August 7th, 2017 a New Jersey whistleblower was awarded $9.4 million Tuesday for filing a False Claims Act (FCA), also known as a qui tam complaint.  The allegations involved mortgage lender PHH Corporation and the relator questioned the practices with the mortgage company and its filings with the Federal Government.   The total qui tam settlement amount was over $74 million dollars.  In these actions, a relator or whistleblower is entitled to up to 25% of the settlement amount attributable to the information provided, but at the end of the day $9.4 million dollars is an excellent award for blowing the whistle on allegedly unlawful practices

The complaint alleged PHH failed to comply with federal regulations for loans held by the Federal Government. For a five year span, PHH certified loans for Federal Housing Administration (FHA) insurance, which resulted in major losses for the government.

“Government mortgage programs designed to assist homeowners—including programs offered by the FHA, VA, Fannie Mae and Freddie Mac—depend on lenders to approve only eligible loans,” said Chad Readler, the acting assistant attorney general for the Civil Division, in a prepared statement. “The department has and will continue to hold accountable lenders that knowingly cause the government to guarantee, insure, or purchase loans that are materially deficient and put both the homeowner and the taxpayers at risk.”

“While we cooperated fully in these investigations since receiving subpoenas in 2013, we concluded that settling these matters is in the best interest of PHH and its constituents,” PHH said. “Adhering to high legal, regulatory and ethical standards is at the core of how we conduct business, and we remain committed to serving our customers and all of our stakeholders consistent with that principle.”  The Defendants did not admit to liability, but as qui tam lawyer Jason T. Brown noted, “The apology is in the money.”

Mr. Brown continued by commending the integrity of the relator or whistleblower for coming forward and her counsel and the Department of Justice for advancing the case.  There still may be additional exposure for PHH in a different capacity due to a $100 million penalty issued by the Consumer Financial Protection Bureau (CFPB).  The CFPB which is supposed to be a vanguard for consumer rights, has been attacked as being an unconstitutional entity by defendants and the defense bar, although to date, there has not been a court of note siding with that argument.

Employee Whistleblowers score a win against Medicare fraud in Ohio

OHIO – Employees turned whistleblowers have helped the government to recover millions of Medicare funds claimed fraudulently by one of the biggest nursing home operations in Ohio.

Ohio-based Foundations Health Solutions Inc. (FHS), Olympia Therapy Inc. (Olympia), and Tridia Hospice Care Inc. (Tridia), and their executives, Brian Colleran (Colleran) and Daniel Parker (Parker), have agreed to pay about $19.5 million to resolve cases alleging that they submitted false claims to Medicare, the Department of Justice announced on July 17.

As part of the settlement, FHS and Colleran have also entered into a five-year Corporate Integrity Agreement with the U.S. Department of Health and Human Services’ Office of Inspector General. The agreement is tailored to increase the accountability and transparency of FHS and Colleran so future fraud and abuse will be quickly spotted and avoided.

The settlement resolves allegations filed in two separate lawsuits by Vladimir Trakhter, a former Olympia employee, and Paula Bourne and La’Tasha Goodwin, former Tridia employees, in federal court in Columbus, Ohio. They filed the lawsuits under the whistleblower provisions of the False Claims Act (FCA), which permit private individuals as relators to sue on behalf of the government for false claims and to share in any recovery.

Of the $19.5 million settlement, Mr. Trahkter, a physical therapy assistant, will receive a whistleblower award approximately $2.9 million; Ms. Bourne and Ms. Goodwin will split a qui tam award of $740,000, the DOJ said.

The deal specifically resolves allegations that from January 2008 to December 2012, Olympia and PSI/BCFL made false claims to Medicare. It allegedly claimed payment for medically unnecessary rehabilitation therapy services at 18 skilled nursing facilities. The government found the provided therapy services excessive, increasing Medicare reimbursement unnecessarily.

The deal also resolves allegations that from April 2011 to December 2013, Tridia made false Medicare claims for hospice services to ineligible patients which Tridia didn’t properly certify or medically examine, the DOJ said.

Settled also in the deal are the allegations that between January 2008 and December 2012, the two executives, Colleran and Parker, sought and got payoffs for referring patients in skilled nursing facilities of PSI and BCFL to Amber Home Care LLC, a home health care services provider.

The DOJ said the deal resulted from a coordinated effort by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Southern District of Ohio, with assistance from HHS-OIG, the HHS Office of Counsel to the Inspector General, and the Ohio Medicaid Fraud Control Unit.

“It is unacceptable for an entity entrusted to care for our most vulnerable and elderly citizens to make decisions based on profit, not quality of care,” said U.S. Attorney Benjamin C. Glassman of the Southern District of Ohio in a statement. “Subjecting the elderly to inappropriate levels of therapy can be physically harmful, and failing to properly certify and re-certify hospice patients can have a devastating impact on the patients and their families.”

The case is filed as United States of America et al. v. Provider Services Inc. et al., case number 1:11-cv-00217, and United States of America et al. v. Colleran et al., case number 1:12-cv-00935, both in the U.S. District Court for the Southern District of Ohio.  (end)

Permanent Injunction Entered against Utah Pharmacy

The U.S. District Court for Utah entered a permanent injunction against Isomeric Pharmacy Solutions LLC (Isomeric), William O. Richardson, its Chief Executive Officer (CEO), Rachael S. Cruz, its Chief Sales Officer, and Jeffery D. Brown, its Chief Operating Officer (COO). The consent order entered was an injunction prohibiting the defendants from distributing adulterated, misbranded and unapproved new drugs in violation of the federal Food, Drug, and Cosmetic Act.

 

A complaint was filed in July at the bequest of the U.S. Food and Drug Administration (FDA), alleging, the defendants failed to sufficiently remedy insanitary conditions that resulted in contamination.

Isomeric manufactures, labels, and distributes sterile drugs, including injectable hormones, injectable corticosteroids, and ophthalmic drops. The pharmacy/company is a direct to physician distributor. According to the complaint, there is a long history of the Defendants failing to maintain adequate sanitary conditions. According to Acting Assistant Attorney General Chad A. Readler “Compounding pharmacies must produce their drugs in a way that does not potentially endanger patient safety “The Department of Justice will continue to work actively with FDA to ensure that compounding pharmacies comply with the law and provide safe products that doctors and patients can rely on.”

 

Isomeric was involved in four voluntary recalls in 2016 and 2017 after an FDA inspection. The 2016 recalls involved three types of injectable suspension drugs: triamcinolone diacetate 40 mg/mL, methylprednisolone acetate/lidocaine HCl 40/10 mg/mL, and betamethasone acetate/betamethasone sodium phosphate.

 

FDA Commissioner Scott Gottlieb, M.D. stated, “Isomeric endangered the public health by manufacturing injectable drugs under poor conditions that compromised their required sterility and put patients at risk,” “We will continue taking strong enforcement actions against compounders who violate the Drug Quality and Security Act and put patients at risk by failing to produce sterile drugs in compliance with the law.”

 

According to lawyer Jason T. Brown, who handles whistleblower actions, “This appears to all be government action and rightful responsive action. While the 9th Circuit has just opened the door for plaintiffs to potentially file certain claims that blow the whistle on things like fraud upon the FDA, this particular case would be challenging to bring as a qui tam, but the government alone did a commendable job.”

 

https://www.justice.gov/opa/pr/district-court-enters-permanent-injunction-against-utah-pharmacy-and-its-executives-prevent