$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.