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Posted on February 22, 2010 by LaBovick Law
In an effort to resolve a qui tam claim regarding submitting false claims to Medicaid for Nitroglycerin Sustained Release (SR) capsules, Novartis Unit, Eon Labs Inc. agreed to pay the U.S. $3.5 million. The U.S. Department of Justice (DOJ) indicated that the settlement “resolves allegations against Eon in a multi-defendant whistleblower action,” case titled United States ex rel. Conrad v. Eon Labs, Inc., et al.
The U.S. Food and Drug Administration concluded in April 1999 that Nitroglycerin SR was “no longer legally eligible for reimbursement” by Medicaid and other government-run health care programs. According to the DOJ, Eon Labs, Inc., allegedly submitted false quarterly reports that included Nitroglycerin SR to the government from April 1999 through September 2008.
U.S. Attorney for the District of Massachusetts, Carmen M. Ortiz, stated the following:
"This is the first False Claims Act agreement with a drug company that sought to charge the government for less than effective drugs, and it shows that the Department of Justice will pursue those who market such drugs and expect the government to pay for them."
Under the False Claims Act, private persons are able to file a whistleblower and qui tam lawsuit on behalf of the U.S. government. If the claim is resolved successfully, the whistleblower may be entitled to receive a share of the settlement. According to the DOJ, the whistleblower involved in this claim will receive approximately $525,000.
Click on the following link to read more on the Eon Labs False Claims Act Settlement, Department of Justice and The Wallstreet Journal.
Posted on January 30, 2010 by LaBovick Law
This week on January 28, the Department of Healthand Human Services and the Department of Justice held an invitation only Summit on Health Card Fraud. Key Speakers included Secretary Kathleen Sebelius and U.S. Department of Justice Attorney General Eric Holder.
The summit was an unprecedented event on health care fraud where law enforcement and the private and public sectors come together as a part of the Obama Administration’s coordinated effort to fight health care fraud. The seminar covered such topics as
- Use of technology to prevent and detect health care fraud and improper payments.
- Role of states in preventing health care fraud.
- Development of effective prevention policies and methods for insurers, providers and beneficiaries.
- Effective law enforcement strategies.
- Measuring health care fraud, assessing recoveries and determining resource needs.
Highlights from some of the key speakers include the following:
Secretary Kathleen Sebelius gave a moving introduction of the significance of the summit. She reinforced the Obama Administration's stance on "zero tolerance" for criminals who cheat taxpayers, endanger patients, and jeopardize the future of Medicare. A few highlights from her speach include the following remarks:
"Today, the President has asked us to put these criminals on notic. The problem of health care fraud is bigger than either government, law enforcement or the private industry can handle alone. We will need all of us working together to solve it. In the fight to prevent, find, catch, and prosecute these crooks, we want every good idea we can get.
Health care fraud is a national problem. It affects federal programs like Medicare, state programs like Medicaid, and private insurance companies. We’re all part of a health care system that has been undergoing rapid growth.
Between 1970 and today, America’s annual health care spending has gone from $75 million to over $2.5 billion. That has produced significant benefits for patients. But it’s also created a much bigger target for criminals. And a much bigger challenge for investigators. The difference between catching fraud then and now is the difference between trying to find a penny in a bathtub and trying to find a penny in a swimming pool."
Attorney General Eric Holder stated in his opening remarks that the HHS-DOJ Healthcaree Fraud summit marks a critical step forward in the work being done by HEAT, our Health Care Fraud Prevention and Enforcement Action Team that was established last May. He gave several insightful comments after addressing the fact that we have a serious problem on our hands with healthcare fraud. If the agencies, concerned advocuates and citizens work together, combined forces, more progress will be made.
Continue Reading...
Posted on January 28, 2010 by LaBovick Law
Upon returning from holiday recess, the 111th Congress of the United States introduced bill H.R. 4444, better known as the Defund the Crooks Act, in early January 2010. First introduced by Congressman Alan Grayson (D-FL), the Defund the Crooks Act prohibits the Federal Government from awarding Federal funds, contracts, or grants to covered organizations. The Act also prohibits the Federal Government from promoting certain organizations or from entering into other agreements with these organizations.
Based in part on the Defund ACORN Act of 2009, Congressman Grayson’s bill effectively broadens the scope of regulation while not basing the regulation on the acts of one organization. The purpose of the bill is essentially to ensure that Federal funds – taxpayer dollars – do not end up in the hands of organizations that fail to meet certain requirements.
According to the bill, “covered organizations” refers to several of the following examples:
- Any organization previously convicted of a Federal or State law violation
- Any organization that failed to comply with Federal or State laws leading to its corporate charter being revoked
- Any organization that has filed, transmitted, or submitted a fraudulent claim to any Federal or State agency
- Any organization that knowingly employs, contracts, or relegates authority to any individual who has been convicted of a Federal or State law violation
The Defund the Crooks Act states that no Federal funds, regardless of form, may be provided to organizations that do not meet the aforementioned requirements set out in the bill. It is important to note that the Act does not apply to organizations that received Federal funds prior to the enactment of the bill. However, if organizations that are now deemed unfit to receive Federal funds, grants, endorsements, etc. have a contract extending past the date of the bill’s enactment, they will be terminated.
Click on the following link to view the proposed bill H.R. 4444 introduced to Congress.
Click on the following to learn more on Congressman Grayson and the Defund the Crooks Act (H.R. 4444).
Posted on January 25, 2010 by LaBovick Law
The United States filed a qui tam or False Claims Act complaint against Johnson & Johnson (J&J) and its subsidiary companies Johnson & Johnson Health Care Systems Inc. and Ortho-McNeil-Janssen Pharmaceuticals Inc. According to the complaint, Omnicare Inc., the U.S.’s largest dispenser of pharmaceuticals to patients in nursing homes, was receiving millions of dollars in kickbacks from the companies. This complaint comes after Omnicare entered into a $98 million settlement with the federal government and multiple states in November of last year, an action that supposedly resolved Omnicare’s liability for taking previous kickbacks from Johnson & Johnson.
Allegedly, Omnicare accepted financial kickbacks in return for the company’s purchase and recommendation of Johnson & Johnson and its subsidiaries’ pharmaceutical products to nursing home patients. Doctors accepted the recommendations of Omnicare’s pharmacists more than 80 percent of the time, and allegedly Johnson & Johnson viewed Omnicare pharmacists as “an extension of its sales force.”
Kickbacks were delivered in several ways, including:
1) Offering Omnicare rebates when programs to increase the sale of Johnson & Johnson’s prescription drugs to nursing home patients were implemented.
2) Paying Omnicare millions of dollars for “data”; the complaint alleges that these payments were false and used only to coerce the recommendation of Johnson & Johnson drugs from Omnicare pharmacists.
3) Johnson & Johnson also made multiple “educational funding” and “grant” payments to Omnicare, with intent only to receive a recommendation from its pharmacists.
Assistant Attorney General for the Civil Division of the Department of Justice had this to say about the situation,
"We will pursue those who break the law to take advantage of the elderly and the poor. He went on to say that, “Kickbacks such as those alleged here distort the judgments of health care professionals and put profits ahead of sound medical treatment."
Posted on January 24, 2010 by LaBovick Law
FORBA Holdings LLC, a dental management company, settled a qui tam claim for allegedly performing medically unnecessary dental services on children. FORBA Holdings LLC provides administrative services to "Small Smiles Center, a nationwide operation of 69 dental centers. The settlement calls for FORBA to pay $24 million, plus interest to the United States and participating states, for suspected medically unnecessary dental services for children on Medicaid insurance. In addition, FORBA will implement several new remedial measures, designed to prevent this type of conduct in the future.
Three whistleblowers are credited for the government’s investigation into these allegations. The whistleblowers filed lawsuits under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private citizens to sue on behalf of the United States and share in any recovery. The whistleblowers will receive payments over $2.4 million from the federal share of the settlement.
According to the Department of Justice, FORBA allegedly falsely submitted claims for dental services performed on low-income children. Many of these services performed did not meet professionally recognized standards of care or were not medically necessary. Tony West, “Assistant Attorney General for the Civil Division of the Department of Justice stated the following:
"We have zero tolerance for those who break the law to exploit needy children. Illegal conduct like this endangers a child’s well-being, distorts the judgments of health care professionals, and puts corporate profits ahead of patient safety."
To resolve the allegations against it, FORBA will pay $24 million, plus interest. The federal share of the civil settlement is $14,285,645, and the Medicaid share for 21 states is $9,714,355.25. This settlement sends a clear message that the government will not tolerate fraud. U.S. Attorney for the Western District of Virgini, Timothy J. Heaphy, is correct in the following statement:
"FORBA put greed and profits before the well-being of children. It endangered the health and safety of innocent children and defrauded the taxpayer of millions of dollars. Today’s settlement addresses these egregious acts and sends a clear message that Medicaid fraud will be expeditiously addressed by this Department."
The False Claims Act is a powerful tool that has helped the government recover approximately $2.2 billion since January 2009 in cases involving fraud against federal health care programs and over $3 billion in False Claims Act total cases overall.
Posted on January 19, 2010 by LaBovick Law
A qui tam law suit that accuses Boston Scientific Corp. (NYSE:BSX), Johnson & Johnson (NYSE:JNJ) and its Cordis Corp. subsidiary and Abbott (NYSE:ABT) of promoting the off-label use of biliary stents to treat cardiovascular disease in hundreds of thousands of patients has been unsealed.
The Whistleblower, Kevin Colquitt, filed the qui tam lawsuit under 31 U.S.C. 3729 (False Claims Act) and other State False Claims Act Statutes for violations against Medicare, Medicaid, CHAMPUS and TRICARE. The lawsuit allegesthat the companies involved, committed Medicare Fraud and filed fraudulent clearance applications with the FDA.
According to the New York Times, the Justice Department and two of those states, Florida and Tennessee, said in court filings that they were declining for the moment to do so, but added that they were continuing to investigate.
Click on the following link: to view the Colquitt Whistleblower Court Documents
Click on the following links to learn more on this qui tam lawsuit,
Mass Device
The New York Times
Posted on January 4, 2010 by LaBovick Law
The year is starting off on the right tone with qui tam settlements for Medicare fraud. The Minnesota case United States ex rel. Steven Radjenovich v. Stanley Gallagher, et al., Case No.: 04-4538 (D. Minn.) was settled for $846,461 today.
According to the Department of Justice, Wheaton Community Hospital knowingly made false claims to Medicare for unreasonable and unnecessary hospital admissions. These false claims were made from 1998 to 2004. The hospital billed Medicare for acute patient care that was not medically necessary.
Tony West, Assistant Attorney General for the Justice Department’s Civil Division stated the following:
"Hospitals and doctors have a responsibility to provide patients with reasonable and necessary care. When they neglect those obligations, patients and taxpayers suffer."
The whistleblower in this case will be awarded $203,150, as his share of the settlement with Wheaton Community Hospital. In a qui tam case, the whistleblower's reward or relator's award can be anywhere from 15% to 30%, depending upon the level of the government's involvement in the case.
If you are a whistleblower and have pertinent information on Medicare, Medicaid fraud or any other false claims act violations from a company, protect your rights and contact a qualified qui tam attorney to discuss how to protect your rights.
Posted on January 1, 2010 by LaBovick Law
Happy New Year 2010!! Today is the first day of the New Year. 
Last year marked a milestone in record breaking settlements relating to qui tam and false claims act violations.
The year ended with a qui tam settlement from Genesys Health System in the amount of $669,413. The lawsuit brought by the Justice Department alleged that the health care provider violated the False Claims Act by submitting false claims to Medicare.
Genesys, a Grand Blanc, Mich.-based Company, provides health care services through a network of medical facilities located in Michigan. The government alleged that between 2001 and 2007, Genesys violated the False Claims Act by billing Medicare for higher levels of service than were actually rendered to patients. Specifically, the government alleged that Genesys overbilled for evaluation and management services provided to cardiology patients.
Assistant Attorney General of the Justice Department’s Civil Division, Tony West stated:
"We are committed to vigorously pursuing those who defraud Medicare. Taxpayer dollars should be spent on health care services for patients, not wasted on fraud and abuse."
This case was a success due to the coordinated efforts of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Michigan, and the Office of Investigations for the Department of Health and Human Services’ Office of Inspector General and Office of Counsel to the Inspector General.
Posted on October 30, 2009 by LaBovick Law
The DOJ's Assistant Attorney General Tony West realizes that healthcare fraud is a serious issue that can't be fought alone. Since 2009, he has led DOJ's Civil Division and is requesting help from Congress to combat healthcare fraud. We applaud Assistant Attorney General Tony West for his efforts in admitting that the DOJ needs help. This is a first step in making progress.
Earlier this week, Senator's Ted Kaufman (D-Del.) and Arlen Specter (D-Pa.) and Senator Patrick Leahy (D-Vt.) introduced the Healthcare Fraud Enforcement Act to Congress. This bill outlines enforcement issues and calls for increasing rewards for whistleblowers. It is estimated that an additional $20 million is needed in federal funding to increase Medicare fraud investigations and prosecutions.
Fighting healthcare fraud is a bi-partisan effort. Senator's Chuck Grassly (R-Iowa) and John Cornyn (R-Texas) are also concerned about how the DOJ plans on fighting healthcare fraud. According to Sen, Chuck Grassley, there are over 1,040 pending qui tam lawsuits in the DOJ, some over 36 months. A strong plan of action needs to be in place to bring qui tam lawsuits to trial and swift justice for those found guilty.
Whistleblowers should be encouraged with this week's progress in the fight against healthcare fraud. Qui tam lawsuits will increase next year if Congress and the DOJ make a concerted effort to fund and staff the teams charged with handling this task.
We recommend that whistleblowers remain steadfast. Enlist legal help of a private attorney on qui tam claims. This can ease some of the burdens, when bringing a qui tam lawsuit. Also, this can help ensure that the whistleblower's rights are protected.
Posted on September 3, 2009 by LaBovick Law
Pfizer Inc has agreed to pay a record settlement of $2.3 billion to resolve a qui tam case and to settle federal and criminal probes. According to the DOJ and several published reports, this involves the alleged Medicare/Medicaid fraud, and the illegal use off-label marketing of multiple drugs.
The fines in this case are $1.3 billion, which are the largest settlement ever paid for a health care fraud claim and a criminal case. In addition to Pfizer, Pharmacia & Upjohn Co, a Pfizer subsidiary was also involved with misbranding a pharmaceutical.
The settlement involves the marketing drugs not included in the label approved by the FDA. Two drugs included in this probe are antibiotic Zyvox and antipsychotic Geodon.
Pfizer has agreed to pay $400 million to settle whistleblower claims involving Zyvox and Geodon drugs. They will pay an additional $33 million for improper marketing with 42 states and the District of Columbia.
The whistleblowers involved in this case will receive over $100 million for their roles in bringing this fraud to light.
Posted on July 21, 2009 by LaBovick Law
Everyone knows there is no place like New York and New York City. However, this does not mean that New York and NYC can defraud the government. The Department of Justice announced today that a settlement was reached by New York and NYC to pay a record sum in the amount of $540 million to settle allegations for knowingly submitting, or causing to be submitted, false claims for reimbursement for school-based health care services, primarily speech therapy and transportation, provided to Medicaid eligible children from 1990 to 2001. Unfortunately, you did not misread this information that New York state workers, knowingly submitted false charges to the Medicaid program. This is appalling information.
According to the News Release from the Department of Justice:
The government’s allegations arose from two lawsuits filed under the qui tam or whistleblower provisions of the False Claims Act, which allow private persons, known as “relators,” to file actions on behalf of the United States and share in any recovery. The relator in these cases, a speech therapist who provided services to preschool children in upstate New York, alleged that New York State and its school districts submitted false claims for speech services that did not qualify for Medicaid reimbursement. The relator will receive $10 million from the settlement.
This is such a travesty since New York is a state that took such much pride in coming out with a state False Claims Act to go after those defrauding the government. How unsettling to see that their own workers were committing such fraudulent acts to get funds their state did not deserve. Shame, Shame, Shame on you New York. We are grateful to the speech therapist that came forward to bring such light against this fraud. We can't stress it enough, if you are aware of your company defrauding the government and have proof, find out the necessary steps to report the fraud. There is a whistleblowers reward to those that help uncover the fraud. It is not easy and we can attest that many who try to go it alone don't always get the reward they deserve. Seek out legal counsel, find out your rights and discuss the facts with legal counsel that you trust. In some cases, such as this one, there is great reward. Thankfully in this instance, New York did the right thing and settled the case for $540 million and the relator/whistleblower will receive $10 million for their valiant efforts.
To learn more on the New York False Claims settlement of $540 million, click on the following links:
Department of Justice
Dow Jones
Posted on June 15, 2009 by LaBovick Law
Today, a qui tam suit that was brought against Kindred Healthcare, Inc. was settled for just over $1.3 million. United States Attorney Russ Dedrick announced today that Kindred Healthcare, Inc. and its successor PharMerica Healthcare Pharmacy, LLC, have agreed to settle claims that Kindred violated state and federal laws regarding over-billing TennCare and the Medicaid program for pharmaceuticals.
The healthcare corporation provides medications to patients in group homes and long-term care facilities throughout Tennessee. It was alleged that between 2003 through 2006, Kindred overbilled for a higher number of drugs than were actually administered. There were instances where the overbilling occured multiple times the proper amount.
Thanks to the valiant efforts of a former billing clerk employee of Kindred, this qui tam lawsuit was filed on behalf of the the United States and Tennessee under the qui tam provisions of the Tennessee Medicaid False Claims Act and the federal False Claims Act.. The whistleblower/ relator in this case will be rewarded over $200,000 for her role in filing the complaint and assisting with the investigation.
As mentioned previously on the Whistleblower Law Blog:
In a qui tam suit, the whistleblower also known as a "relator" may be entitled to
15-30% of the government's total recovery, which includes damages for the false bills, tripled, plus civil penalties of from $5,000 to $10,000 per false claim. However, it is important to mention, that the relator/whistleblower must have complied with the statutory requirements to be eligible for the whistleblower reward.
To learn more on the Kindred settlement, read the DOJ release reqarding the qui tam settlement for Kindred Health.
To learn more on qui tam and the federal false claims act, visit our qui tam section on the LaBovick website.
Posted on June 12, 2009 by LaBovick Law
Another successful case in the win column for whistleblowers (relators) bringing qui tam suits, In this most recent instance, whistleblower, Steve Pogue, and his legal team can breathe a sigh of relief, because the litigation against Healthways that took 15 years has finally settled for $40,000,000.
It started back in 1994 when Mr. Pogue was fired from his job as a marketing representative for a company called Diabetes Treatment Centers of America, (owned by parent company Healthways).. The hard work and tireless efforts for bringing justice on behalf of the United States for the Diabetes Treatment Centers for stealing millions of dollars in taxpayer money through Medicare fraud and illegal kickbacks, paid off inthe recent settlement.
Since the government decided not to intervene, whistleblower, Steve Pogue will collect 25% - 30% of the settlement as a reward. That comes out to $10,000,000 - $12,000,000 for him stepping forward and bringing forth the qui tam claim. Hopefully settlements like these will encourage more whistleblowers to report fraud against their employers that are stealing from the government.
Legal Blogger, from Getnick & Getnick on QuitamHelp.com, made a valid point in the blog post "Healthways pays $40 million to settle 15 year qui tam suit, when they shared the following statement:
"This case “demonstrates the wisdom of Congress in deciding that the government’s decision not to participate does not mean that a case has no merit.”
Although it took 15 years, the reward was great, Unfortunately, it is not always like this and sometimes the whistleblower doesn't win such a large amount of money. Wen working with whistleblowers around the country, most step forth and bring fraud to their employer's attention, because they want to do what is right for the company and the government. Unfortunately, most companies fire the messenger or make their lives miserable,. The whistleblower is forced is forced to seek legal counsel and bring the company's fraudulent behavior to the authorities..
Hopefully, the proposed False Claims Act Amendment will give protections to more whistleblowers so that we can prevent taxpayer fraud. We all lose, when someone defrauds the government. Let's all be watchful of how companies bill the government and spend government funds. If the public doesn't keep a watchful eye out for the government, who else will? Definitely not the companies stealing and overcharging the government.
To learn more on this qui tam settlement from Healthways, read Medical News Today
Posted on January 26, 2009 by LaBovick Law
Whistleblowers have a lot to celebrate in the wake of the recent $1.4 billion settlement from drug maker, Eli Lilly. The drug giant, Eli Lilly, plead guilty to promoting its drug Zyprexa for uses not approved by the Food and Drug Administration (FDA). Included is a criminal fine of $515 million, the largest ever in a health care case, and the largest criminal fine for an individual corporation ever imposed in a United States criminal prosecution of any kind. Eli Lilly will also pay up to $800 million in a civil settlement with the federal government and the states. Whistleblowers will share in about 20% of the government's share in the $800,000.
This settlement should help more whistleblowers come forward. AM Law Daily gives an insightful summary on how whistleblower cases have increased in the past year. I have to admit, at our firm, over the past year and even more recently, whistleblowers have been contacting us regarding qui tam claims. I think that this can be attributed to the large whistleblower rewards and media attention over the past year. One word of caution, if you are a whistleblower with critical information, talk to an Attorney about your claim and rights before making statements public. This way you have a better way of protecting your claim.
Click here to read more on the $1.4 billion qui tam settlement from Eli Lilly from the Department of Justice.
Let's see how 2009 will treat qui tam and whistleblower claims under the new administration.
Posted on November 26, 2008 by LaBovick Law
Whistleblower Anthony Kite has $1.9 million reasons to be happy this Thanksgiving. The Pennsylvania based, St. Vincent Health System settled a qui tam case pay $1.9 million to the federal government to settle a whistleblower lawsuit that alleged the hospital submitted reimbursement claims to Medicare that greatly exceeded actual costs.
This is the latest in a string of whistleblower cases settled against hospitals. What makes this cases really interesting is that the whistleblower, Anthony Kite, has been instrumental in bringing several qui tam cases to light. According to Mr. Kite, St. Vincent Health System increased Medicare reimbursement claims from 2001 to 2003 with the hopes of receiving what is commonly referred to as "outlier" or supplemental payments. Surprisingly, other hospitals were doing the same thing according to allegations brought by the whistleblower.
What makes this suit fascinating is that Medicare uses "outlier" payments to hospitals for instances where costs for treating a patient exceed a predetermined reimbursement amount for a particular type of treatment. One can only imagine how many times hospitals have taken advantage of this loophole to try and take advantage of Medicare billing.
A few other qui tam suits against Hospitals and Health Care Systems include:
Cooper University Hospital in Camden, N. J., $3.85 million settlement.
Warren Hospital in Phillipsburg, N.J., $7.5 million settlement
Bayonne Medical Center in Bayonne, N.J., $2.5 million settlement
Cathedral Healthcare System in Newark, N. J. $5.3 million settlement
Raritan Bay Medical Center in Perth Amboy, N.J. $7.5 million settlement
Grand Total: $26,650,000.00 - In Qui tam/ whistleblower suits against Health Systems
Now, I must caution you to not think that every whistleblower claim produces results like these, because they do not. It takes PROOF and hard FACTS to prove the claim and it takes time. As most whistleblowers can attest to this fact.
Click here to read more on this whistleblower suit against health systems.
Click here to read more on qui tam statutes and how to file a whistleblower claim.
Posted on July 1, 2008 by LaBovick Law
InterDent, Inc., InterDent Service Corporation and Dedicated Dental Systems Corporation have paid the United States and the State of California approximately $729,000 to settle allegations that they submitted false claims for orthodontic care to Medi-Cal’s dental program, which is called Denti-Cal.
The lawsuit was originally filed in June 2005 by relator/ whistleblower, Dr. Guy W. Mendivil, a certified orthodontist. Dr. Mendivil, a Denti-Cal provider who worked at Dedicated Dental’s orthodontic clinic in Bakersfield, alleged that the dental clinic fraudulently used his Denti-Cal number from 2002 through 2005, to bill the Denti-Cal program for orthodontic care provided by unauthorized dentists.
The Department of Justice issued a release on this case. This particular lawsuit was filed under the federal False Claims Act on behalf of the United States and the alleged Medi-Cal fraud, was filed under the California False Claims Act on behalf of the State of California.
Although the company did not admit any guilt, this case serves as an example of how quickly things can settle, when whistleblowers such as Dr. Guy W. Mendvil come forward. I am always amazed at the qui tam cases that come to our office, brought by doctors with morals that can't stand to see their companies defrauding the government and trying to get away with millions on the backs of taxpayers. Unfortunately, when companies steal from the government, they are stealing from the everyday citizen that works hard to make an honest dollar. If you have knowledge of a company submitting false claims against the government, we encourage you to get proof and discuss your rights with legal counsel.
Posted on June 14, 2008 by Juliet Sallette
Four Miami men have been charged in $110 Million Medicare False Claims Scheme that was uncovered by the Medicare Fraud Strike Force. According to the Department of Justice’s Criminal .jpg)
Division and the U.S. Attorney’s Office for the Southern District of Florida, Carlos and Luis Benitez, Jose Benitez and Thomas McKenzie were all allegedly involved in the Medicare Fraud. The alleged fraud happened from January 2001 through November 2004.
The four men are accused of conspiring to submit $110 Million in fraudulent false Medicare Claims for HIV infusion services provided at the following 11 HIV infusion clinics: AH Medical Office Inc.; Advanced Medical Rehabilitation Center Inc.; Best Medi Corp.; Physician’s Health Med-Care; Physician’s Med-Care Inc.; Saint Jude Rehab Center Inc.; Global Med-Care Corp.; CNC Medical Corp.; G&S Medical Centers Inc.; Karla Medical Services Inc.; and Best Medicare Inc.
According to the indictment, The Medicare False Claims Scheme involved recruiting Medicare beneficiaries to go to the Clinics under the false pre-tense of needing HIV infusion services. Physicians and medical staff were trained to fraudulently show that medical services were performed and medically necessary.
Thanks to the valiant efforts of Deputy Chief Kirk Ogrosky's Strike Force Team and U.S. Attorney R. Alexander Acosta's outstanding prosecutors, this Medicare fraud was uncovered. We applaud their efforts and hard work.
Five Ways we can combat Medicare False Claims fraud and prevent new schemes
- First, we can prosecute people and companies that are guilty of Medicare False Claims.
- Second, we can ask for Whistleblowers to come forward and report the fraud/ false claims.
- Third, we can support the Medicare Fraud Strike Force team by ensuring they are adequately funded and staffed to handle the investigations and prosecution.
- Fourth, we can pass stringent legislation that helps prosecute those found guilty of fraud/false claims.
- Fifth, we can make it easier to reward whistleblowers for coming forward and reporting Medicare fraud and Medicare false claims schemes and simplify the process.
Continue Reading...
Posted on June 9, 2008 by LaBovick Law
The Illinois based Walgreen's Pharmacy has agreed to settle a qui tam case for $35 Million that involves drug switching of the following drugs: Ranitidine (or Zantac), which inhibits stomach acid production; Fluoxetine (or Prozac), an antidepressant; and Eldepryl, known generically as selegiline, which is used with other medications to treat the symptoms of Parkinson's disease. Reports showed that Walgreens fraudulently increased reimbursement from Medicaid by switching the form of the drug dispensed to Medicaid patients while providing no additional medical benefit to patients.
According to the U.S. Department of Justice, the case was initially filed in 2003, by Whistleblower and licensed pharmacist Bernard Listiza. The Whistleblower should receive approximately $5 million of the total $35 Million qui tam settlement and the federal government will receive approximately $18.6 million of the settlement. The remaining $16.4 million will be shared by over 40 states and Puerto Rico, due to separate settlement agreements.
A breakdown of the shares of the Walgreen's settlement by state includes: Florida receives $9.8 million, Illinois, $1.25 million, Georgia $401,000, Indiana $289,000, Ohio $161,000, New Jersey $1.25 million and Pennsylvania $9,000.
Click here to read more on this Whistleblower Medicaid fraud case from the Chicago Tribune.
Posted on May 16, 2008 by LaBovick Law
The Baptist Health South Florida Inc., will pay the United States $7,775,000 to settle False Claims Act and the Stark Statute violations that allegedly occurred between 2003 and 2005. According to the Department of Justice this probe involved Baptist Health South Florida, over compensating an oncology group for patient referrals to Baptist's hospitals. The payments were made pursuant to a contract under which the oncology group provided physics and dosimetry services to the two hospitals.
The Stark Statute prevents Medicare providers like Baptist from billing the federal health care program for referrals from doctors that have a financial relationship with the provider. There are a few exceptions for the Stark Statute.
Click here to read more from the Department of Justice and the Sun Herald on this False Claims Act settlement.
Posted on April 24, 2008 by LaBovick Law
A New Orleans Hospital, Touro Infirmary, recently settled a qui tam suit for $1.75 million. According to the Department of Justice, the suit alleged that Touro Infirmary, submitted false claims to the Medicare program.
Involved in the Medicare scheme with the New Orleans Hospital, was Dr. Maria Carmen Palazzo. In previous a Whistleblower Blog post, we mentioned Dr. Palazzo's involvement with fraud in Paxil trials. According to the recent qui tam case involving Touro Infirmary, Dr. Carmen Palazzo received unlawful payments of $144,000 per year from 2000 to 2004. This was a part of the scheme to get patient referrals to the hospital from Dr. Maria Carmen Palazzo to refer patients to the hospital. According to recent reports, Dr. Palazzo, was found guilty on 39 counts of health care fraud, including 13 counts arising from her contractual relationship with Touro.
Click here to read more from the Department of Justice, on the False Claims Act settlement from Touro Infirmary.
Posted on April 15, 2008 by LaBovick Law
Medicare fraud can happen anywhere and can be detected by the most least suspecting individual in a company. Recently, Fred Steinberg, M.D, a radiologist and owner of the chain, of University MRI and Diagnostic Imaging Centers, located in Florida settled a qui tam suit for $7 million. The Florida firm denied all charges and agreed to settle the qui tam suit according to a quote in the Sun Sentinel "to end the uncertainty of protracted litigation."
The company was accused of overcharging Medicare for Medical scans and billing the federal government for some tests that were not medically necessary. There were also allegations that that the Florida company paid doctors under the table for sending them imaging patients for tests that could cost as much as $2,500 apiece.
Why is it that when an employee reports questionable government billing practices to management, in this case Medicare bills, the company takes the defensive and fires the employee.
In the case of the Florida Diagnostic Imaging Centers, David Clayman, M.D, a former radiologist for the imaging centers, was fired after questioning the Medicare billing practices. According to a recent DOJ release, Dr. Clayman will receive $1.75 million as his share of the $7 Million recovery.
According to the American College of Radiology, a doctors' association, in a Sun Sentinel article, the cost for Medicare and insurers is about $16 billion a year for unnecessary imaging tests ordered by doctors who made money from them. These tests not only cost the government and taxpayers, but also expose patients to radiation and and raise medical costs.
One of our favorite crusaders in the Medicare fraud fight, R. Alexander Acosta, U.S. Attorney for the Southern District of Florida, stated that “We will aggressively prosecute any physicians, including board-certified specialists, who abuse and steal from the Medicare system to line their own pockets.” Attorney Brian F. LaBovick mentions in an article on health care fraud for a Thomson West Litigation Reporter, that "We must continue to prosecute fraud on all levels. New amendments are needed to continue to foster the cottage industry of civil attorneys assisting U.S. attorneys' offices around the country with their qui tam investigations. Each state must enact its own qui tam statutes (there are now 22 states with qui tam laws). This will give states the ability to potentially capture additional funds for Medicare fraud prosecution at a local level, pursuant to the Deficit reduction Act of 2005."
The Florida qui tam case discussed in this post is: U.S. ex rel. David Clayman v. University MRI and Fred Steinberg, M.D. et al. Civil Action No. 02-81143 (S.D. Fla.).
Posted on March 19, 2008 by LaBovick Law
In a remarkable turn of events, America's self proclaimed largest pharmacy, CVS Caremark, has agreed to settle Medicaid fraud allegations for $36.7 million. According to information obtained from a whistleblower and extensive research, the company allegedly switched the tablet version of the drug Ranitidine (generic Zantac) to a more expensive capsule version. According to the Justice Department, CVS Caremark allegedly made the drug switch from 2000 to 2006 to increase reimbursements from Medicaid.
The whistleblower, Bernard Listiza, a licensed pharmacist, will be rewarded $4,309,330 for his efforts in bringing this medicaid fraud to light. As previously mentioned previously on the Whistleblower Law Blog, a whistleblower can receive a reward of 15 percent to 25 percent of what the government recovers, if the government joins the qui tam case and if the government declines to join the qui tam lawsuit, the whistleblower can receive a reward of 25 percent to 30 percent of what the government recovers.
We can only hope that these large awards will begin to serve as deterrents for companies such as CVS Caremark to engage in Medicaid fraud. Thanks to the diligence of U.S. Attorneys such as U.S. Attorney Patrick Fitzgerald, the government is pursuing corporations and individuals charged with fraud against the government. In a recent statement, U.S. Attorney, Patrick Fitzgerald, said, “These penalties, coupled with the willingness of insiders to report fraud, should deter such misconduct, but when it doesn’t, the result in this case and others serves notice that we will aggressively pursue all available legal remedies.”
The Whistleblower Law Blog salutes the brave whistleblowers who come forward and the diligent men and women prosecuting fraud on behalf of the government. Sometimes, it may take years and many obstacles to overcome, but it is all worthwhile when a whistle blower's testimony can help the government recoup dollars and treble damages from Corporations and individuals that are found defrauding the government.
Click here to read more from the Department of Justice.
Posted on March 18, 2008 by LaBovick Law
Florida based, Acculab Laboratories has agreed to settle a qui tam suit alleging false claims and fraudulent billing to Medicare. The company has agreed to pay the United States $461,000 according to the Justice Department. The allegations surrounding the Sarasota based company included included billing Medicare for laboratory services that were not ordered, were not provided, were not medically necessary or were improperly unbundled.
The whistleblower will receive $92,200 of the settlement. The whistleblower provisions of the False Claims Act, allows private parties, called "relators," to file an action on behalf of the United States and receive a portion of the proceeds of a settlement or judgment awarded against a defendant.
It is the American taxpayer who is victimized when a provider submits false claims to Medicare," said acting Assistant Attorney General Jeffrey S. Bucholtz.
The case was handled by the Justice Department's Civil Division, Commercial Litigation Branch; and the U.S. Attorney's Office for the Middle District of Florida.
Click here to read more from the Department of Justice
Posted on February 28, 2008 by LaBovick Law
South Carolina Regional Hospital, Tuomey Regional Medical Center, is accused of Medicare and Medicaid fraud in a qui tam lawsuit, brought by the U.S. Attorney's Office in South Carolina. According to a recent article on State.com, the suit involves the Regional Hospital overcharging Medicare for surgeries and “bribing” doctors with “kickbacks” for their business. The case is being handled by U.S. Attorney Norman Acker. The lawsuit alleges that the Toumey Regional Medical Center created a billing scheme from January 2005 to September 2007, in which "it submitted and caused others to submit false and fraudulent claims for payment to Medicare and Medicaid ...”
Judge Matthew Perry ruled yesterday that the Justice Department-backed lawsuit against the South Carolina Regional Hospital can proceed and crucial evidence against the Hospital can be admitted into the f the case. The lawyers for the hospital had been trying to get the case dismissed.
Orthopedic Surgeon, Michael Drakeford, initial qui tam lawsuit was filed under seal in federal court in Columbia in October 2005. The federal government investigated Drakeford’s claims and before taking over as lead plaintiff in the case.
Time will tell how much of the behind-the-scenes, big-profits world of doctors and hospitals in the billion-dollar S.C. health care industry will be revealed. The hospital is expected to answer the allegations by March 28.
The case could be worth millions of dollars to the government if the South Carolina Hospital is found guilty of fraudulently over billing the government or if they decide to settle and no admit any guilt or wrong doing.
Charles Miller, a Department of Justice spokesman is quoted as saying, "The government intervenes only if a case has merit. The department gets involved in less than 25 percent of qui tam actions filed each year. In qui tam cases, the government nearly always gets a settlement or wins in a jury trial."
Click here to read more on this case from the State.com
Posted on December 31, 2007 by LaBovick Law
HealthSouth Corporation agrees to pay $14.2 million to settle allegations that the company submitted false claims to the government and paid illegal kickbacks to physicians who referred patients for care in some of its hospitals, outpatient rehabilitation clinics, and ambulatory surgery centers, according to reports from the Justice Department.
HealthSouth, the nation’s largest provider of inpatient rehabilitation services, was also one of the largest providers of outpatient rehabilitation services, ambulatory surgery services, and diagnostic imaging services until it sold those lines of business earlier this year.
The settlement was due to the joint efforts of the U.S. Attorney for the Northern District of Alabama, the U.S. Attorney’s Office for the Central District of California, the Civil Division of the Department of Justice, the Department of Health and Human Services, Office of Inspector General, and the FBI.
U.S. Attorney for the Central District of California, “Thomas P. O’Brien, gave a powerful statement in response to the settlement and kickbacks “We will not be fooled when healthcare providers attempt to disguise kickbacks as cleverly crafted business arrangements. Medicare providers seeking federal funds must play by the rules. Providing sweet deals to physician groups to insure a steady stream of referrals runs afoul of those rules and will not be tolerated.”
HealthSouth Corporation stock closed yesterday at $21.48. Click here to find out more from Health South.
To read more from the Department of Justice, Click here.
Posted on December 28, 2007 by LaBovick Law
Thanks to a brave nurse for uncovering what she saw as fraudulent Medicare billing practices, the government will receive $26 million from Saint Josephs Hospital of Atlanta and Saint Josephs Medical System to resolve the "whistleblower" lawsuit that alleges the hospital violated the federal False Claims Act in regards to Medicare billing practices. According to the DOJ, the St. Joseph's Hospital employee, Tami Ramsey, will receive $4.94 million for her valiant actions in coming forward and reporting the improper billing practices. She found that the hospital routinely billed Medicare for inpatient rates, when patients were receiving outpatient services, resulting in a higher charge, since inpatient services are more than outpatient services.
According to United States Attorney, David M. Nahmias, "This significant settlement demonstrates our commitment to protect public funds from fraud and abuse. Every Hospital that submits claims to the Medicare program must ensure that its services are billed appropriately. We will continue to vigorously pursue Medicare provides who disregard billing rules."
This is a strong message to the Medical community, that fraudulent billing practices to the Medicare program will not be tolerated. There will harsh fines and penalties imposed. Rewards will be given to whistleblowers who uncover this fraud. In a prior Whistleblower Law Blog post this year, we reported that Medicare and Medicaid fraud in 2007 accounted for $1.54 billion to the government from corporations settling heath care fraud qui tam or false act claims. Whistleblowers were awarded $177 million for their valiant actions of bringing the corporations to justice. Under the False Claims Act, whistleblowers can sue companies or individuals that they believe have filed fraudulent claims with the federal government. If successful, they can receive up to 30 percent of the proceeds of what the government recovers.
To read more from the Department of Justice on St. Johns Medical Center, Click Here
Posted on December 11, 2007 by Brian F. LaBovick, Esq.
Dear Blog Readers,
I write this blog with absolute reverence. What I am about to share is a biblical tale of the Lord's retribution against the evil fraudsters in our midst. In modern society we often see the hand of the Lord as a simple act of coincidence or an explained scientific event or better yet, a scientific anomaly. But here, the hand of the Lord is obvious. He (this is not intended to be sexist) is against those who defraud Medicare. That's right, you heard it here first. The Lord is paying attention to the fraudulent people who are ripping off Medicare.
Ok, let me clarify this beginning. On Wednesday, December 5, 2007, Mark Potter, an NBC Correspondent, wrote an article for MSNBC.com entitled "Fake Companies Steal Billions from Medicare". What makes this article interesting is that it involves a man from Miami, Florida, literally being eaten by an alligator while running from the police. Another important feature about this man is that he allegedly ran a fraudulent Medical Supply Company in Florida.
Make no mistake about it. This is not an unfortunate event. This is one of those events that gets written down in the Holy Scriptures and retold for centuries to come. I can hear it now:
And the people cried, for the coins set aside for the sick were stolen by the evil souls amongst the people. And so the people sent their courageous fighters to find the evil souls, collect their coins and cage the evil to stop the theft of the coins set aside for the ill. The courageous fighters searched across the swamps and paved lots through a sea of multi-colored automobiles. Upon finding the evil souls the courageous fighters took flight to capture and cage the evil amongst them. The evil would not be taken and caged and thus also took flight. Into the wilderness the evil fled to avoid capture by the courageous fighters. Through all this the Lord was watching. The Lord was angered by the evil in the land. The Lord knew the coins set aside for the sick were sacred to the people. Helping the ill was judged by the Lord as good and proper under his laws and commandments. Therefore the coins were good and aiding the ill was important to the Lord. The Lord decided he would no longer permit the evil to dwell in the land. The Lord sent a great lizard to rise up from the Earth's midst. The great lizard heard the voice of the Lord and came forth to teach the people how to rid the evil from their midst. The great lizard searched the wilderness until it found the evil souls. In a quick and merciless moment the great lizard tore from limb to limb the evil souls . The people could hear the gnashing of teeth and the and wrenching of souls. The intent of the Lord was good and the people understood the evil must dwell in the land no more.
Can we stick that in one of the minor scriptures?
All Jokes aside. It is not my intent to be blasphemous. Please note: I am just kidding around. I do think it is unfortunate that the Lord doesn't intervene more often to stop fraudulent people. But then again, the Lord could be leaving it up to us to take action and bring these corrupt people to justice. The fraud that is going on in the world around us is astounding. Medicare is bilked out of an estimated $60+ Billion (yes "B" billion) dollars a year. Imagine what we could do with the money, if it was applied to some cause other then fraud.
Potential Whistleblowers: If you know of a significant fraudulent scheme, stand up. Stop the silence. The sight of criminals driving luxury cars and living on oceanfront mansions is too much for society to bear. These people must be brought to Justice. If the Lord is willing to take one or two out with an alligator now and again, so be it. But we are being challenged to take out the rest. We must take a stand. We must swallow the safety of anonymity and report the fraud. We must be willing to fight.
Brian
Posted on December 4, 2007 by Juliet Sallette
"How Qui tam helps fight Medicaid Fraud" - an article written by Brian F. LaBovick, Esq. was recently published by Thomson West in the Volume 13, Issue 5 /November 2007 edition of the Andrews Litigation Reporter on Health Care Fraud.
Click Here to read the article "How Qui tam helps fight Medicaid Fraud".
Posted on November 15, 2007 by LaBovick Law
Stryker Corp and Physiotherapy Associates have agreed to pay $16 million to settle qui tam allegations on submitting false claims to Medicare and other Federal health programs, according to the Department of Justice. Stryker Corp sold its outpatient therapy division, Physiotherapy Associates in June 2007.
The settlement resolves allegations that Physiotherapy, submitted claims for services to Medicare, state Medicaid programs, and the Department of Defense's TRICARE program that were falsely billed as one-on-one services and that Physiotherapy improperly retained excess or duplicate payments it received from federal health care programs. Under the terms of the settlement, Physiotherapy agreed also to enter into a corporate integrity agreement with the Office of Inspector General for the Department of Health and Human Services.
Stryker Corp stock closed at $70.78 yesterday, with shares being down $.09 or .13% from previously trading.
To read more about this settlement from the Department of Justice, Click here.
Posted on October 16, 2007 by Juliet Sallette
The Medicare Strike force has helped complete another successful qui tam case for Medicare fraud. According to Assistant Attorney General Alice S. Fisher of the Criminal Division and U.S. Attorney R. Alexander Acosta of the Southern District of Florida, Rodolfo Aenlle, owner of Direct Nursing Assistance Inc. was recently convicted by a federal jury in Miami for Medicare fraud.
Allegedly, Direct Nursing Assistance, Inc. submitted claims to Medicare for $1 million. Aenlle had prescription pads printed, and forged the names and signatures of physicians. For his part in this Medicare scheme, Aenlle faces a maximum of 40 years in prison. His sentencing is scheduled for Dec. 13, 2007.
U.S. District Judge Donald Middlebrooks presided over the case and the case was prosecuted by Deputy Chief Kirk Ogrosky from the Fraud Section of the Criminal Division and Assistant U.S. Attorney Ryan K. Stumphauzer of the Southern District of Florida.
Click here to read more from the Department of Justice.
Posted on October 4, 2007 by LaBovick Law
Nelson Valdes, Pharmacy Owner and Durable Medical Equipment owner, was ordered by U.S. District Judge Cecilia M. Altonaga to pay approximately $3.5 million in connection to Medicare false claims. In July of this year, a federal jury in Miami convicted Mr. Valdes of conspiring to defraud Medicare, taking kickbacks and other related charges. This was the third time, Mr. Valdes has been convicted of Medicare fraud. Hopefully he will learn from his mistakes this time around.
According to the Department of Justice, Mr. Valdes conspired with Med-Pro Billing and Unimed Pharmacy to refer paid patients in exchange for half of what Medicare paid for “compounded” aerosols. Compounding is the the process of a pharmacist making medication as opposed to a pharmaceutical manufacturer.
Mr. Valdes will receive 12 years in prison for Medicare fraud, according to Assistant Attorney General Alice S. Fisher of the Criminal Division and U.S. Attorney R. Alexander Acosta of the Southern District of Florida.
This verdict marks another win for our diligent medicare fraud strike force. Since March 2007, the strike force team has indicted approximately 80 cases and 120 defendants in Miami-Dade County alone. The Medicare fraud strike team deserves a big round of applause. Their hard work helps the government recoup millions of dollars for qui tam or false claims involving medicare fraud.
Click Here to read more on this case from the Department of Justice.
Posted on September 30, 2007 by LaBovick Law
Bristol-Myers Squibb Company (BMS) and its wholly owned subsidiary, Apothecon, Inc., have agreed to pay over $515 million to settle a qui tam fraud suit and other civil allegations involving their drug marketing and pricing practices, According to United States Attorney Michael J. Sullivan.
This was a collaboration of seven qui tam actions brought under the False Claims Act. Those actions include the following cases: United States ex rel. Richardson v. Bristol Myers Squibb, Civil Action No. 06-11821-NG (D. Mass.); United States ex rel. Piacentile v. Bristol-Myers Squibb Co., Civil Action No. 05-10196-MLW (D. Mass.); United States ex rel. Forden v. Bristol-Myers Squibb Co., Civil Action No. 04-11216 -RGS (D. Mass.); United States ex rel. Cokus v. Bristol Myers Squibb, Civil Action No. 01-11627-RGS (D. Mass.); United States ex rel. Barlow v. Bristol-Myers Squibb, Civil Action No. 04-11540-MLW (D. Mass.); United States ex rel. Ven-A-Care of the Florida Keys, et al. v. Apothecon, et al., Civil Action No. 00-10698-MEL (D. Mass.); and United States ex rel. Ven-A-Care of the Florida Keys, Inc. v. Bristol Myers Squibb Co., Civil Action No. 95-1354 (S.D. Fla.).
The settlement was by no means the effort of one person, but the joint efforts of several offices and individuals including: the Boston offices of the Office of Inspector General for the Department of Health and Human Services, the Federal Bureau of Investigation, and the Food and Drug Administration's Office of Criminal Investigations, along with Department of Justice Trial Attorney Andy Mao of the Fraud Section of the Civil Division, District of Massachusetts Assistant U.S. Attorneys Gregg Shapiro and Susan Poswistilo, and Southern District of Florida Assistant U.S. Attorney Mark Lavine.
The National Association of Medicaid Fraud Control Units participated in the negotiation of the settlement, and the Corporate Integrity Agreement was negotiated by Mary Riordan of the Office of Inspector General at the Department of Health and Human Services.
Cheers to everyone involved in making this huge settlement possible. And not to forget the brave whistleblowers who risked a lot to come forward. They will share $50 million of the settlement for their bravery and participation. A relator can receive anywhere from 15 percent to 30 percent in a successful qui tam claim depending upon the government's involvement.
Click here to read more about this Bristol Myers Squibb Settlement from the DOJ and Bristol Myers Squibb.
Posted on September 19, 2007 by LaBovick Law
The captivating Pharma Fraud blog brings us an interesting perspective into the world of drug diversion by leading Pharmaceutical companies. In a recent post, Pharma Fraud, includes an interview with a Relator in The USA et al Relator v McKesson et al case. This is the case that alleges three Big Wholesalers and Henry Schein, encouraged and engaged in the diversion into the gray market of drugs manufactured by Merck & Co., Inc. (“Merck”). It names the giant distributer, Henry Schein as a major player in purchasing diverted Merck drugs and selling them to wholesalers.
What makes this a Qui Tam case? The manufacturers are supposed to pay a rebate to Medicaid according to Federal and State Medicaid law. If they are guilty of hiding the huge discounts to commercial customers in order to avoid paying rebates on the difference between AMP (Average Manufacturer's Price)and Best Price, which Federal and State Medicaid law requires they pay, this is a violation of the False Claims Act and is a Qui Tam case.
The amended complaint was filed in Camera under seal in May, 2007 with Plaintiff's, U.S., several states including Florida and Texas. The Defendant's named in The USA et al Relator v McKesson et al include McKesson, Cardinal Health, Amerisourcebergen and Henry Schein, Inc.
Posted on September 18, 2007 by LaBovick Law
New York Attorney General Andrew M. Cuomo and New York City Mayor Michael Bloomberg joined forces this week in the fight against Medicaid fraud. Yesterday they filed a joint lawsuit against Merck for the drug Vioxx. Their suit claims Vioxx misrepresented the dangers the drug posed to its users. The lawsuit seeks damages and civil penalties in addition to restitution for tens of millions of taxpayer dollars wrongfully spent on Vioxx prescriptions, and marks the first time the State and City have brought a joint action to fight Medicaid fraud.
Attorney General Cuomo issued strong words in a statement on the case "Merck's irresponsible and duplicitous conduct endangered the health of New Yorkers and wasted our tax dollars. As alleged in the complaint, even as evidence was piling up showing just how dangerous this drug was, Merck put profits above all else and put thousands at risk by continuing to push Vioxx inappropriately on doctors and patients.We will hold accountable those who put our families at risk, and we will fight back when New Yorkers are harmed and fleeced.”
According to Ed Silverman of the Pharmalot Blog, did a great job covering this story. He brings out in his recent post that this the lawsuit comes just five months after the newly appointed Jim Sheehan came aboard as New York State’s Medicaid Inspector General. Jim Sheehan is former Assistant Attorney General in Philadelphia. We owe him tremendous gratitude for his efforts in the Medco case. A company that was once owned by Merck.
This is the only the beginning. New York has jumped out first in using their new State False Claims Act to help prosecute this alleged fraud against the residents of New York. Companies across the U.S. should be on notice that they will be prosecuted by more states for any State False Claims Act violation. There are about 22 states with a Sate False Claims Act on their books. Florida recently modified the the Florida False Claims Act to be in line with the Deficit Reduction Act and to receive additional funds.
Stay tuned for more news on this case with New York and the makers of Vioxx, Drug giant, Merck. They probably will settle to get this case closed and behind them as quick as possible, before more start cropping up. This probably will not be the last Vioxx case we will hear about.
On a side note: Merck stock closed at $50.57 an increase of $1.10 from previous trading. I guess the Shareholders are confident that Merck can handle this new law suit.
It makes me think of the two baseball teams Boston and the Yankees. Boston took the Boys of Summer for granted and did not protect their lead. The Yankees appear to be closing in on the narrow lead Boston has over them. One word to the wise, never take New York and New Yorkers for granted.
Posted on September 6, 2007 by LaBovick Law
Florida's Strike Force team has another successful win to celebrate in the fight against Medicare Fraud and qui tam. Marianela Smith, Owner and Operator of a Florida durable medical equipment company and an assisted living facility was convicted by a federal jury in Miami of Medicare fraud and submitting false claims to Medicare among other things, such as kickbacks.
According to reports from the Department of Justice, Marianela Smith conspired with the owners of Lily’s Pharmacy to refer paid patients to the pharmacy in exchange for half of what Medicare paid for “compounded” aerosols. Compounding is the process of a pharmacist making medication as opposed to a pharmaceutical manufacturer. She referred patients and their Medicare billing information to the owners of Lily’s Pharmacy and gave false prescriptions for compounded aerosol medications purchased from local physicians. A patient testified during trial that he was paid $150 per month to use his Medicare card and to obtain false prescriptions in his name that were ultimately provided to the pharmacy. This medicare fraud scheme with Lily’s Pharmacy fraudulently billed Medicare more than $271,000 for the false prescriptions for compounded aerosol medications provided by Smith. In exchange, Smith received more than $81,000 in kickbacks.
Marianella faces up to 30 years in prison for her role in this Medicare Fraud scheme. What amount of money could be worth this great risk of freedom?
We salute our special force fraud team for all of their hard work and successful efforts, including Assistant Chief John Kelly, Trial Attorney Hank Walther of the Fraud Section of the Criminal Division, Deputy Chief Kirk Ogrosky of the Fraud Section and last but not least U.S. Attorney R. Alexander Acosta of the Southern District of Florida.
Click here to read more from the Department of Justice on the Medicare fraud case against Marianella Smith.
Posted on August 11, 2007 by LaBovick Law
Earlier this week, the qui tam case of United States ex. rel.Louanne Boothe v. Sun Healthcare Group, Inc., No. 06-2156 (10th Circuit August 7, 2007) was remanded by the United States Court of Appeals, Tenth Circuit.
This case involves allegations by former finance and accounting employee, Louanne Boothe against Sun Healthcare Group, a U.S. Healthcare provider, claiming that Sun Healthcare Group over-billed the United States in ten distinct ways. The complaint includes allegations of the following: 1) Sun over-billed the government by abusing the Section 1010 exception in the years 2000-2002; 2) Sun defrauded Medicare by disregarding Medicare’s prudent-buyer guidelines and overcharged for therapy management services for $2.6 million; 3) overstated its temporary nursing staff’s labor hours in 2001 and 2002 by $500,000; 4) overcharged Medicare by $240,000 in 2002 for pharmacy charges 5) improperly billed Medicare in 2001 for $200,000 worth of stolen medical supplies; 6) overcharged Medicare by $540,000 in 2000-02 by funneling costs between Denver Mediplex and an outpatient clinic; 7) filed Medicare reimbursements for $3.6 million worth of mortgage interests payment; 8) released patients earlier than its prior practice from Ballard Rehabilitation Hospital to inflate its Medicare revenue by $2 million; 9) manipulated patient discharges to impose improper costs on Medicare of $500,000; and 10) signed without the knowledge or consent of its patients admission forms for three years ending January 2003 to receive from Medicare $9 million in reimbursements for accident and injury treatments when liability potentially rested with third parties.
These allegations seem pretty specific, however, the primary issue at hand is whether the allegations are “based upon” information already in the public domain or whether Ms. Louanne Boothe is an “original source” of the information.
The district court held that it lacked subject matter jurisdiction under 31 U.S.C.§ 3730(e)(4) of the False Claims Act, 31 U.S.C. § 3729-33, to hear the case.
According to the Tenth Circuit, the district's assessment was accurate that it lacked jurisdiction in three of the claims Ms. Boothe presented. However, jurisdictional analysis of each of Ms. Boothe’s
remaining seven claims of fraud is necessary. Therefore, the United States Court of Appeals Tenth Circuit remanded the cases for further proceedings. The Court included the following language "Three bad apples does not necessarily warrant discarding the barrel". Interesting choice in words.
It is also important to note that Sun Healthcare Group tried to use the following arguments against Ms. Boothe: (1) Ms. Boothe waived her right to pursue a qui tam complaint in a severance agreement she executed upon her departure from Sun; (2) Sun’s intervening bankruptcy, from which it emerged in 2002, discharged Sun’s obligations to satisfy the claims in Ms. Boothe’s qui
tam complaint; and (3) Ms. Boothe failed to plead her qui tam complaint with sufficient particularity.
Citing lack of jurisdiction, the district court declined to address these arguments for dismissal and the Tenth Circuit did not address them either. It will be interesting to see if they come up again as this saga continues.
Let's all hope that Sun Healthcare Group is operating with the integrity and honesty that they are known for in the healthcare community rather than the over-billing of Medicaid and Medicare as was alleged in the qui tam suit of Luanne Boothe. The company has been around since 1993 and is continuously growing, serving more sick and terminally ill patients, and doing lots of business with the government. In the year, 2006, they took in $1.116 Billion in revenue according to their quarterly reports. Currently they operate 216 skilled nursing, long-term care and assisted living and mental health facilities in 25 states with approximately 23,520 operating beds according to their self published reports. The company closed out the second quarter at $446.7 million, up 73 percent compared to $258.5 million second quarter 2006. The stock price closed on the Nasdaq Friday at $15.30 per share.
Posted on August 5, 2007 by LaBovick Law
Tenet Healthcare received good news last week, when U.S. District Judge Patricia A. Seitz granted Tenet's request for Summary Judgment and dismissed a Racketeering case. The case was that of Boca Raton Hospital v. Tenet Healthcare, 05cv80183, U.S. District Court, Southern District of Florida (Miami). According to Bloomberg News, Judge Seitz is quoted in her ruling as saying " Tenet escapes Boca's grasp not because its conduct is blameless but only because Boca is not the proper entity, and RICO is not the proper legal vehicle, to redress the harm Boca targets". The Boca Community Hospital brought charges against Tener under the U.S. Racketeer Influenced and Corrupt Organizations Act . Judge Seitz said the charges were insufficient as a matter of law to prevail against Tenet.
Governor Charlie Crist, in 2005, as Florida's Attorney General, was involved in one of two lawsuits against Tenet with 13 hospital plaintiffs. According to the complaint, Tenet was accused of racketeering that artificially inflated its prices. Allegedly the scheme, took in more than $1 billion. According to the Business Journal, Florida was the only state, at that time to file that type of charge against Tenet. However, other states and federal agencies have investigated the company for alleged over-billing. In 2006, Attorney General Crist resolved his case against Tenet with a $ 7 million settlement, resolving allegations that the company falsely inflated its hospitals' charges from 2000 to 2003 to obtain reimbursements from a Medicare fund. Unfortunate for Boca Raton Community Hospital, they could not have been a part of the group of Plaintiff's Charlie Crist represented
It is also important to mention that in June 2006, Tenet settled its Medicare fraud disputes with the federal government for $900 million, including funds that Tenet returned for overbilling.
In an effort to clean up its reputation, Tenet has taken a lot of progressive steps. They have installed a new management team, appointed former Florida Governor Jeb Bush to the Tenet Board and implemented stringent corporate governance and compliance policies.
Hopefully with these measures in place, Tenet Healthcare Corporation, one of the nation's largest health care providers can focus on saving lives and providing the best possible healthcare to patients. The Tenet Stock closed at $4.86 per share on Friday, but ended at $4.98 in after hours trading.
Click here to read more on this story from Bloomberg News, FindLaw, The Business Journal, The Miami Herald.
Posted on August 1, 2007 by Brian F. LaBovick, Esq.
Readers,
Does it smell bad? It smells very bad to me. What smells bad? The administration of our country is what smells bad.
I just read the
August 1, 2007 Washington Post Article by Amy Goldstein and Carrie Johnson. The article, "U.S. Attorney Became Target After Rebuffing Justice Dept" talks about how an Assistant U.S. Attorney, John L. Brownlee, while prosecuting the OxyContin case was called by Michael J. Elston, the chief of staff to the Deputy Attorney General Paul J. McNulty (read Alberto Gonzales underling) the night before the plea deal and was instructed to "slow down" the prosecution. Mr. Brownlee, boldly, did not listen to those instructions and went forward with the prosecution.
Interesting. A few weeks ago, I
blogged on Presidential hopeful, Rudy Giuliani, being the dealmaker for Purdue Pharma, the multi-billion dollar company who manufactured Oxy. Recently company executives were sentenced for defrauding the government but avoided the real punishment of significant jail time. We all know that rich people get to avoid criminal prosecution whenever possible. I am sure having a presidential hopeful as your lawyer and a president as you buddy didn't hurt.
According to the article, someone had enough influence and power to actually get to an Assistant U.S. Attorney's superior office, have them call the poor US Attorney the night before he concludes the biggest case of his life and try and stall or kill the prosecution. I know that is no longer shocking. But it should be!
We applaud the work of the bold and good Mr. Brownlee, but what was his reward? Somehow his name was on a November 1 list of Assistant US Attorneys who were recommended for dismissal. That seems logical. Let's dismiss the guy who just prosecuted a huge pharma company and worked his tail off and helped recover $635 million for the government. Why would Mr. Gonzales want to dismiss Mr. Brownlee? Maybe because he was pushing to prosecute the President of United State's buddies? I criticized the deal as too lenient. I think the public needed to see real justice and retribution by having the evildoing executives go to jail. I am betting the Administration felt it came far too fast and was far too costly.
I guess, as a lawyer, I am imprinted with the feeling that our justice system (one of the best and most fair systems in the world) is the third leg of American Government. The American way of life depends on the judicial system running as an independent entity free of political manipulation. Certainly there have always been attempts to manipulate the Judiciary. But this administration has made a full out frontal attack on the entire Judicial System. They attack the civil system by trying to stop civil lawsuits. They propagandize the American public that they need to stop the "greedy trial lawyers" at the small guys expense. Big corporations, big drug companies and big insurance companies can continue to hurt the little guy and this Administration could not be happier. Now they are fully attacking the criminal justice system. They are directly and intentionally interfering with criminal prosecutions. I do not trust any of their motives. Purdue Pharma plead guilty to hurting and killing and defrauding the public and the government. They got away with a $635 million dollar slap on the wrist. I know that sounds like a lot of money, but when your liberty is at steak, it is just money. I promise they will make more. It should be criminal for the Administration to interfere and attempt to stop even that from happening. It makes me imagine how much money and fraud is not being prosecuted in the multi-BILLION dollar contracts to the Iraq multi-national companies.
This is just another bad smell reeking from the bowels of an administration mired in the muck of just being bad to the core. Bad at administrating. Bad at being transparent with the public. Bad at caring for the country. Bad at making international policy. Bad at dealing with prisoners of war. Bad for the environment. Just bad for America. It is just so very bad.
Sick and signing off.
Brian
Posted on July 30, 2007 by LaBovick Law
Sebastian River Medical Center and Neurosurgeon, Linda Bland settled a qui tam suit in Florida for $1.275 Million for performing unnecessary surgeries on Medicare patients, thanks to the brave whistleblower Anesthesiologist Thomas Gayeski.
It is rare for Doctors to blow the whistle on other doctors, usually, out of professional courtesy. Dr. Gayeski, had the courage to stand up and report this fraud after he left the hospital. As a reward for his efforts, he earned a whistleblower's reward of $230,000 and his Attorneys fees were paid by the Hospital. This was not a bad payday for speaking up and telling the truth.
Allegedly, Dr. Linda Bland performed more than 150 unnecessary surgeries from 2000 through 2002, according to the whistle-blower lawsuit .
A word to the wise: Health Care Professionals in Florida, the U.S. Attorney R. Alexander Acosta, is on a mission to fight government fraud. In a recent statement he said: ''We will aggressively prosecute any physician or healthcare professional, including board certified specialists, who order or perform unnecessary medical or surgical procedures that endanger the health and safety of our citizens and steal scarce resources from the Medicare system."
Hospitals and Health Care Professionals, Be very carefull... Your co-workers/ employees are going to report your fraud and be compensated for their valiant actions. They will receive 15% - 30% of the government's recovery as a relator's or whistleblower's reward. Also, it can cost you millions of dollars and a lot of aggravation in trying to defend yourself due to your fraud/ or the fraud of your staff.
Read More in the Miami Herald Story.
The Whistleblower Law Blog appears as a courtesy of LaBovick & LaBovick, Civil Justice Prosecutors, A Private Law Firm.
Posted on July 28, 2007 by LaBovick Law
Yesterday, Whistleblowers in United States ex. rel.Fowler v. Caremark Rx.L.LC.., No. 06-4419 (7th Cir. July 27, 2007), lost their qui tam claim against Caremark Rx. LLC on Appeal. The Seventh Circuit Court affirmed the lower courts decision on the merits. I want to make note that I found out about this decision on the humorous and clever Blawgletter, by Barry Barnett. Thanks Barry for being one of the first to cover this recent decision on your blog.
There are few things about this qui tam claim that are important to point out. First let's look at the background of the United States ex. rel.Fowler v. Caremark Rx.L.LC case. The whistleblowers or relators in the case, Michael Fowler, Peppi Fowler, Victor Cortes and Danny Nevarez, were all former employees of Caremark at two of its prescription drug processing facilities. Caremark Rx LLC merged with CVS Corporation in March of this year, making it one of the largest pharmaceutical services companies and provider of comprehensive drug benefit services to health plan sponsors throughout the U.S.
The whistleblowers brought a False Claims Act suit on behalf of the United States alleging that Caremark engaged in six fraudulent schemes: (1) failing to provide a credit for returned prescription drugs; (2) changing prescriptions without proper approval; (3) misrepresenting the savings obtained from its recommendations; (4) failing to substitute a generic version of “Prilosec;” (5) failing to credit for prescriptions lost in the mail; and (6) manipulating the mandatory times for filing prescriptions. This seems to be quite a comprehensive claim and on face value, it appears that the whistleblowers had their bases covered in their complaint and would have uncovered something to support their false act claim. Unfortunately, the whistleblowes found no such luck.
The original false claims act complaint was filed in December of 2003, and since that time, the whistleblowers have filed three amended complaints. This is a perfect example of how long and arduous the process can be for a whistleblower. Despite the hard work, the loss of job, reputation, the whistleblower can lose a qui tam case. This is not to sound discouraging. It is to promote how important it is for whistleblowers to have concrete critical facts, proof, data and a means to corroborate the claims. If not, it will be a very hard life lesson that the whistleblower will never forget. Another important lost qui tam case for the whistblower was the highly publicized Supreme Court Case Rockwell Int'l Corp. v. United States, No. 05-1272 (U.S. Mar. 27, 2007). This case involved a different set of circumstances than United States ex. rel.Fowler v. Caremark Rx.L.LC, but the results were the same, the relators lost their case. In Rockwell Int'l Corp. v. United States, the whistleblower, former engineer, James Stone, died this year at the age of 82, a few weeks after he lost the case for his relator's claim of $1 million.
On a positive note, Whistleblower Statistics or Qui Tam Statistics showing money recovered by the government as a result of fraud or qui tam claims, show positive figures. In 2006, The government recovered $255,006,432, of which, $174,358,450 was qui tam related and $42,067,470 was the relator's or whistleblowers share. In an earlier post on the The Whistleblower Law Blog, we covered a post on whistleblower statistics and numbers of qui tam cases submitted. These numbers should give relators hope. The financial rewards for a successful qui tam claim can be very rewarding.
We can not emphasize enough, of how important it is for whistleblowers to take the proper steps in handling a whistleblower claim. This can make a difference in relator's portion of the government's recovery being zero and a nice thank you or a relator's share being 15% - 30% of the government's recovery. Last, but not least, talk to an experienced attorney to discuss your whistleblower claim and protect your rights.
The Whistleblower Law Blog is presented as a service of the Private Law Firm, LaBovick & LaBovick, P.A., Civil Justice Prosecutors.
Continue Reading...
Posted on July 26, 2007 by LaBovick Law
Arkansas Neurosurgeon, "Patrick Chan was described as " a very energetic, hard working, loyal and moral" surgeon, by a Colleague in a letter of recommendation to the Arkansas medical review board. The Doctor had a successful medical career, earning a top income and running a successful surgical practice. Unfortunately, everything did not remain so rosy and bright for the doctor. Patrick Chan awaits trial in August for allegedly taking kickbacks from medical suppliers and for allegedly submitting false claims to Medicare and Medicaid.
The whistleblower, in this qui tam case, is John Thomas, a former employee of Nu Med Technologies, that sold medical instruments and devices used in spinal surgery.
No one is immune to being charged with a qui tam false claims lawsuit, if they are breaking the law. The government will prosecute small or large companies that fraudulently submit bills to the government. Regardless of the size, fraud, even on a small scale, cost taxpayers money. As former Federal Prosecutor, Brian LaBovick mentioned in a previous post, on the Whistleblower Law Blog , the false claims act does not discriminate against prosecuting small fish (small companies) when they break the law.
If you have knowledge of fraud against the government, contact an experienced qui tam attorney to discuss your claim. It is essential that you take the necessary steps in protecting your relator's share of the government's recovery, which can be 15 – 30% of the government’s total recovery along with additional civil penalties. Since false claims act cases are often complex, it can take several years to settle or to litigate. Whistleblowers often hire an experienced attorney to help in submitting a qui tam claim. LaBovick and LaBovick are former federal prosecutors experienced in prosecuting cases on behalf of the government.
The Whistleblower Law Blog is presented as a service of the Private Law Firm, LaBovick & LaBovick, Civil Justice Prosecutors. LaBovick & LaBovick is a Plaintiff's firm that represents whistleblowers across the United States in qui tam (False Claims Act) litigation; including Federal and State False Claims Act Cases. They offer free confidential consultations to whistleblowers that need to discuss sensitive matters, including those involving current or a former employers.
Posted on July 25, 2007 by LaBovick Law
Merck's former billion dollar baby, Vioxx, popular arthritis Medicine, is still making headlines, despite having been pulled off the market for several years. A recent 2,434-patient study, published on Wednesday in the New England Journal of Medicine, finds that increased heart risk begins much earlier than after 18 months of use, as previously indicated by the drug maker. Of course, Merck is denying the relevancy of this study. According to Merck, the study is not conclusive.
There are over 27,000 lawsuits against Merck from people who claim to have been harmed by Vioxx. I wonder if this new study will impact these lawsuits or not. A few months ago, a jury awarded a man $47.5 million verdict against Merck for Vioxx, finding it responsible for his heart attack.
As though it could not get worse, The FDA rejected Merck's new wonder drug, Arcoxia, a replacement for Vioxx. It is in the class of anti-inflammatory drugs called Cox-2 inhibitors, which are touted as less likely to cause stomach bleeding or have other dangers, but they have been linked to heart risks. On the bright side, Arcoxia is on sale in over 60 other countries, and made $265 million last year. And more importantly, the stock is doing great. Merck closed at $53.38 today an increase over previous days trading. That being the case, the company and shareholders must be happy with progress and must not find the new study to have merit. It could be the calm before the storm or it could cause those pending lawsuits against Merck for Vioxx to mushroom.
Time will tell. Stay tuned... Click here to read more on the new s study on Vioxx from Reuters
The Whistleblower Law Blog is presented as a service of the Private Law Firm, LaBovick & LaBovick, P.A., Civil Justice Prosecutors. LaBovick & LaBovick is a Plaintiff's firm that represents whistleblowers in Florida and throughout the United States in qui tam (False Claims Act) litigation
Posted on July 24, 2007 by LaBovick Law
Jazz Pharmaceuticals, Inc. and it subsidiary Orphan pharmaceuticals, has agreed to pay $20 million in penalties and victim compensation to resolve criminal and civil investigations surrounding illegal promotion of narcolepsy drug, Xyrem. With this settlement, Jazz Pharmaceuticals settles a $3.75 million Federal False Claims Act case with the government and agrees to pay interest. The active ingredient, GHB is a powerful, fast acting depressant that has been abused as a recreational drug and classified as a "date rape" drug. The company admitted to falsely promoting the Xyrem drug to doctors for unapproved uses such as fatigue, insomnia, chronic pain, weight loss, depression and bipolar disorder, according to the Justice Department.
The brave whistleblower in this case, was a former sales representative that filed a qui tam lawsuit on behalf of the government in 2005. This is a perfect example of how long a whistleblower may have to wait to see results in their qui tam (whistleblower) law suit. This case remained under seal until earlier this month. Therefore, whistleblowers must be patient and follow appropriate steps to ensure their relator's portion of what the government recovers is protected. Having the necessary proof and documentation that is not public knowledge and consulting with a knowledgeable and experienced qui tam attorney are good first steps for a whistleblower. The reward for their patience and bravery can be up to 30% of what the government recovers, depending upon the government's level of involvement in prosecuting the qui tam claim.
Click here to read more on this case from the Justice Department and the WSJ Health Blog
If you are a whistleblower with information on a corporation, defrauding the government and need to discuss your case with an experienced qui tam attorney, contact LaBovick & LaBovick.
The Whistleblower Law Blog is presented as a service of the Private Law Firm, LaBovick & LaBovick, P.A., Civil Justice Prosecutors. LaBovick & LaBovick is a Plaintiff's firm that represents whistleblowers in Florida and throughout the United States in qui tam (False Claims Act) litigation
Posted on July 23, 2007 by LaBovick Law
"Helping the Government serve the People" is the tagline of Virginia based Maximus, Inc., latest corporate citizen entangled in a Medicaid fraud scam. Unfortunately, this company needs a new tagline. The DOJ announced today that Maximus has agreed to pay $30.5 Million to settle qui tam lawsuit. The company admitted to their part in submitting fraudulent Medicaid claims for children who may not have received foster care services. Last September, at the end of their fiscal year the company reported earning $700 million in revenue and predicted a rosy forecast for 2007. Today the Maximus stock closed at $42.05, only down a slight 5% from earlier trading. I wonder, how they will project next year's forecast, in wake of this scandal. It is a scandal, because the good name of this organization has been tarnished due to a few "greedy" and "unscrupulous" workers.
Thanks to the brave whistleblower, Benjamin Turner, a former division manager at Maximus, the acts and deeds of the corporate wrongdoers, did not go unpunished. In recognition for his efforts, Mr. Turner will receive $4.93 million as a result of filing a qui tam or whistleblower lawsuit under the provisions of the False Claims Act. There are times when a whistleblower gets compensated for his brave actions. And there are times when the whistleblower gets nothing, even after going to the Supreme Court, as in the case of Rockwell v. United States, as mentioned here previously on the Whistleblower Law Blog. Take a look at the Whistleblower statistics reported by the US DOJ, from 1986 - 2006. There were over 5,500 whistleblower cases filed. As John Mack, blogger for Pharma Blogoshere points out, that comes to about $326,341 per whistleblower if they all shared the approx. $1.79 billion equally. This is not enough to retire on, but it is not a bad start for a new life after standing up for what is right and turning in an employer for defrauding the government.
According to the US DOJ Press Release, Assistant Attorney General for the Civil Division, Peter D. Keisler said " The Maximus settlement demonstrates the Justice Department’s strong commitment to vigorously pursuing those companies that defraud the Medicaid program.
Let's hope more brave whistleblowers step forward and turn in corporations for qui tam or false claims act violations. If you are a whistleblower, with vital confidential information on your company, fraudulently billing the government, contact an attorney that handles qui tam litigation. You need to protect your rights, and your "relator's" share of what the government recovers from the qui tam claim. The Lawyers of LaBovick & LaBovick are former Federal Prosecutors that know how to prosecute qui tam claims on behalf of the government. Call today for a confidential free consultation.
Click here to read more on Maximus from Forbes and Associated Press and the US Department of Justice.
The Whistleblower Law Blog is presented as a service of the Private Law Firm, LaBovick & LaBovick, P.A., Civil Justice Prosecutors. LaBovick & LaBovick is a Plaintiff's firm that represents whistleblowers in Florida and throughout the United States in qui tam (False Claims Act) litigation
Posted on July 21, 2007 by LaBovick Law
It is finished... Purdue Pharma Executives were sentenced by Federal Judge James P. Jones, yesterday in Virginia. Judge Jones sentenced the three top executives of Purdue Pharma to three years’ probation and 400 hours each of community service in drug treatment programs. The New York Times reported that Judge Jones was "troubled by his inability to send the executives to prison. The federal prosecutors had not produced evidence as part of recent plea deals to show that the officials were aware of wrongdoing at the drug’s maker".
One thing that this sentencing does not do, is bring back the loved ones of the families that have been hurt by OxyContin. One valiant crusader in the fight against OxyContin abuse is Ed Bisch. He is a father that lost an 18 year old son, due to a drug overdose of this drug in 2001. In a quest to shed light on the devastating affects of "Oxy" as the teens called it, the day after his died from it, he started the website www.Oxyabusekills.com. He dedicated the www.Oxyabusekills.com site in memory of his son 18 yearold son Eddie Bisch. His goal is to bring awareness on how easy it is to overdose on Oxycontin (Oxy) and the dangers of prescription drug abuse. He deserves a round of applause for his efforts to bring the awareness to this nationwide public-health crisis. He took on the giant Pharma company to wage a public campaign with the simple, yet powerful message "this stuff is killing our kids, we have to do something". This brave dad, Ed Bisch, took a tragedy (the loss of his 18 year old son ) and has made it his mission to help save the lives and to educate the public before it is too late.
At the Purdue Sentencing on Friday, there were several loved ones and family members who lost loved ones due to OxyContin. I am sure that you could feel the emotions in the courtroom. According to the Rhode Island news, Victor DelRegno, a dad who last his son Andrew, age 20, to OxyContin drug overdose in 2002, was one of the witnesses that made a statement the sentencing. Prior to the sentencing Victot DeRegno is quoted as asking “What should the true cost for justice be?” This is a question that will remain in the minds of several people, for years to come.
Where do we go from here on the war against OxyContin abuse and other prescription drugs? What will it take for pharma companies, such as Purdue Pharma, to be honest about the dangers of their drugs? Creation of public awareness campaigns, with real people like Ed Bisch, Victor DeRegno and others sharing their stories to the community at large. It would be great if all of the Pharma companies would fund a non-profit group that educated the public on the dangers of prescription drug abuse. One that encourages participation from family members that have lost loved ones. This would be a good start for the pharma companies to show they are serious about being a good corporate citizen. Not to say, their charitable donations already being give to communities are not enough. But rather, showing commitment to the fight against prescription drug abuse and all the damage that it does by taking lives, loss to families and communities.
Click Here to read more of this story from the New York Times, NewsDay, Money Times, Rhode Island News
The Whistleblower Law Blog is presented as a service of the Private Law Firm, LaBovick & LaBovick, P.A., Civil Justice Prosecutors. LaBovick & LaBovick is a Plaintiff's firm that represents whistleblowers in Florida and throughout the United States in qui tam (False Claims Act) litigation
Posted on July 20, 2007 by LaBovick Law
The St. Louis Business Journal reports that the United States filed a civil complaint against Renal Care Group, Renal Care Group Supply Co. and Fresenius Medical Care Holdings Inc. alleging that the firms fraudulently billed the Medicare program for supplies and equipment provided to End Stage Renal Disease patients, according to U.S. Attorney Catherine Hanaway, out of Kansas City.
The lawsuit was filed as a qui tam lawsuit, which are usually filed by private individuals on behalf of the government. These type lawsuits are normally sealed and are often associated with whistleblower accusations. Due to the false claims presented to the United States by defendants, the United States has suffered damages and is seeking multiple damages under the False Claims Act, to be determined at trial, plus a civil penalty of $5,500 to $11,000 for each fraudulent claim presented for payment.
Let's hope that the relators or whistleblowers that were involved in the qui tam suit have all their documentation and have sought legal counsel on how to protect their rights for the relator's portion of the government's settlement. There are so many whistleblowers that are denied relator claims because they did not follow the proper steps to protect themselves before they brought their case to the proper authorities.
As fomer Federal Prosecutor, Brian F. LaBovick, mentioned in a previous post on the Whistle Blower Law Blog, you need to follow a few steps when preparing to file a qui tam whistleblower claim. Consult with an attorney that understands and handles qui tam claims. This can make the difference between getting a thank you from the government or a check in the amount of up to 30% of what the government recovers. Unfortunately, the whistleblower has to protect their interest first, and that is not only gathering the documentation and proof. If you have a potential qui tam claim, contact the civil justice prosecutors at LaBovick & LaBovick. They are former Federal Prosecutors and understand how to bring a case on behalf of the government. Consultations are confidential and FREE. Act quickly, protect your rights.
The Whistleblower Law Blog is presented as a service of the Private Law Firm, LaBovick & LaBovick, P.A., Civil Justice Prosecutors. LaBovick & LaBovick is a Plaintiff's firm that represents whistleblowers in Florida and throughout the nation in qui tam (False Claims Act) litigation.
Posted on July 19, 2007 by LaBovick Law
Peter Rost is amazing. He manages to break the best stories and do the best interviews on Pharmaceutical fraud. This time around, is about a fired Novartis Whistleblower, with over 20 years in the pharma industry.
Read Peter Rost's article on OPEDnews.com regarding the new cancer drug, Tasigna by Novartis. It is revealing and has a very important message for pharmaceutical whistleblowers regarding when and how they should report a whistleblower claim. It sheds light on the fact that most people want to believe in the good about their company. They want to inform them when they see an inconsistency in something and expect them to make it right, They are not expecting any rewards, just an acknowledgment and confirmation on how the company will correct the problem.
An important message to people who may bring a potential qui tam or whistleblower claim against a company, is to know your rights . A relator or whistleblower must take the proper steps to protect their qui tam or whistleblower claim. They need to speak to an attorney that understands and handles qui tam claims. This can make the difference between getting a thank you from the government or a check in the amount of up to 30% of what the government recovers. Unfortunately, the whistleblower has to protect their interest first, and that is not only gathering the documentation and proof. If you have a potential qui tam claim, contact the civil justice prosecutors at LaBovick & LaBovick. They are former Federal Prosecutors and understand how to bring a case on behalf of the government. Consultations are confidential and FREE. Act quickly, protect your rights.
The Whistleblower Law Blog is presented as a service of the Private Law Firm, LaBovick & LaBovick, P.A., Civil Justice Prosecutors. LaBovick & LaBovick is a Plaintiff's firm that represents whistleblowers in Florida and throughout the nation in qui tam (False Claims Act) litigation.
Posted on July 17, 2007 by LaBovick Law
Akal Security Inc., one of the largest contract security providers in the country, will pay the United States $18 million to resolve allegations that it violated the terms of its contract to provide trained civilian guards at eight U.S. Army bases.
The brave whistleblowers that filed a civil False Claims Act qui tam suit were: Tony Barnes, Raymond Borggreen and Roger Riche. They had firsthand knowledge of the fraud, since they worked as security gaurds for AKAL at Ft. Riley. After investigations by the Department of Defense into AKAL making false claims for payment regarding work contracts with the government, the following allegations were made about Akal: some of the supplied security guards allegedly failed to satisfy weapons qualification requirements and receive other training, and the contractor allegedly failed to satisfy contractual man-hour requirements.
Of course Akal denied all allegations, however, they have agreed to cooperate in the investigation, and has agreed to pay the United States $18 million, to settle the lawsuit.
A warm round of applause for the brave and diligent following key individuals and organizations: the Department of Defense, the Defense Criminal Investigation Service (DCIS), Assistant U.S. Attorney Richard Schodorf, Assistant U.S. Attorney Emily Metzger, auditor Debra Heston, the U.S. Attorney offices in the Western District of Texas, the Southern District of Georgia, the Eastern District of North Carolina, the Eastern District of Kentucky, the Western District of Kentucky, the Northern District of Alabama, and the Western District of Washington.
As former Federal Prosecutors, we know the importance of teamwork when prosecuting complex cases for the government. When prosecuting civil False Claims Act qui tam cases, it is important to have whistleblowers (relators) with first hand knowledge and proof that is not in the public domain. Brian F. LaBovick mentioned in an earlier post on the Whistleblower Law Blog, there are several things that a whistleblower needs when bringing a successful qui tam suit. Although it is not always easy for a whistleblower, the whistleblower rewards can be great. The relator can receive a reward of 15 percent to 25 percent of what the government recovers, if the government joins the qui tam case and if the government declines to join the qui tam lawsuit, the relator can receive a reward of 25 percent to 30 percent of what the government recovers.
Click Here to read more on the Akal Security story from the US Department of Justice.
The Whistleblower Law Blog is presented as a service of the Private Law Firm, LaBovick & LaBovick, P.A., Civil Justice Prosecutors. LaBovick & LaBovick is a Plaintiff's firm that represents whistleblowers in Florida and throughout the nation in qui tam (False Claims Act) litigation.
Posted on July 7, 2007 by LaBovick Law
Fernando and Ileana Fonts, owners and operators of Free Line Medical Equipment in Miami, were arrested and charged with organized fraud for falsely billing the Florida Medicaid program more than $1 million.
“Our Medicaid program exists to ensure that our citizens receive the medical care they need,” said Florida Attorney General Bill McCollum. “When individuals attempt to steal those funds, other people in genuine need are victimized.”
The Agency for Health Care Administration tipped off the Medicaid Fraud Control Unit, with information that the Fonts were failing to perform their services, by either not delivering equipment or delivering faulty equipment while billing Medicaid for fully functional equipment. This is a serious issue because not only were the Fonts stealing from the government, but they were also putting the lives of the patients with severe breathing problems in danger.
If Fernando and Ileana Fonts are prosecuted for Florida False Claims Act (qui tam) violations, they could be face substantial penalties. According to the new Florida False Claims Act violators face civil penalties for making false or fraudulent claims, written or electronically, to the government for the purpose of getting a false or fraudulent claim paid. The penalties can be up to $11,000 per claim and triple the amount of damages the government agency sustains. The new Florida False Claims Act was approved and signed into law in June 2007 by Governor Charlie Crist.
Click Here to read more from the Attorney General's Office on this case.
The Whistleblower Law Blog is presented as a service of the Private Law Firm, LaBovick & LaBovick, P.A., Civil Justice Prosecutors. LaBovick & LaBovick, P.A. is a Plaintiff's firm that represents whistleblowers in Florida and throughout the nation in qui tam (False Claims Act) litigation.
Posted on June 29, 2007 by LaBovick Law
It troubles me that Rudy Giuliani is defending the bad guys at Purdue Pharma. I am almost ready to start preaching on a soapbox about the topic of Presidential election politics and the candidates. Until now I have remained silent on this issue because I feel like the entire group continues to spout off about "non" issue positions. They are giving us dialogue that means nothing. (Lets put aside the voting stances related to the Immigration Bill and the recent vote to fund the troops, since I think the actual voting position will mean much more than their political rhetoric.)
I enjoy listening to Rudy Giuliani, the most, out of all the candidates. He is direct, plain spoken and seems accessible. I think that this is what made him a great prosecutor. Not long ago Rudy helped put away the bad guys. Mr. Giuliani’s reputation was that of a hard-core prosecutor. A punisher of criminal behavior. As a candidate for the Presidency, his employment history encourages me about what Mr. Giuliani will do for America. I venture to say, it makes me feel like I understand him because I understand his passion.
Since he is now running for President, I expected him to continue on this path. But that does not seem like it will happen. Presidential campaigns cost enormous amounts of money and requires candidates to have several friends with money, to run for President. Keeping those "monied" friends out of jail would help gather the funds necessary to run for the President's Office.
There is no doubt that the drug OxyContin has ruined many lives. There is no question that the owner and executives at Purdue Pharma, the manufacturer of OxyContin, was guilty of fraud in how they marketed the drug. Their flagrant behavior caused the government to prosecute both the individuals and the company itself. The Judge fined the company $634.5 million dollars after the company's chief executives (Michael Friedman, the company’s president; Howard R. Udell, its top lawyer; and Dr. Paul D. Goldenheim, its former medical director) plead GUILTY to criminal charges of misleading doctors and patients about the drug.
Continue Reading...
Posted on June 26, 2007 by Brian F. LaBovick, Esq.
Alan Grayson is one of my heroes. He is a United States Qui Tam Attorney trying to get Congress to move faster on qui tam violations that are occurring in the Iraq War. Currently, the government has 60 days to review the disclosure statement as submitted by the Realtor. The courts can give the government more time, if the government asks for more time. However, with the Iraq War, there are a huge number of claims remaining under seal because the Bush Justice Department does not want to investigate them. Therefore, 60 days becomes 60 months.
The Bush administration talks tough about the war on terrorism, but it stalls when it comes to the war on fraud. In fact, it seems as though the current administration is trying to push the investigation of qui tam fraud so far back in the future, where no one will be paying attention.
Brian
Click Here to read more on this issue from the Crime Reporter.
The Whistleblower Law Blog is presented as a service of the Law Firm, LaBovick & LaBovick, P.A., Civil Justice Prosecutors. LaBovick & LaBovick, P.A. is a Plaintiff's firm that represents whistleblowers in Florida and throughout the nation in qui tam (False Claims Act) litigation.
Posted on June 25, 2007 by Brian F. LaBovick, Esq.
Dear Readers:
Get ready for the propaganda storm blitz of the century. If you think cigarettes are healthy and that steroids in cow milk is hunky dory, then you will be happy to know that a bunch of Corporatist Party Think Tanks are ready to do whatever it takes to counter the assertions made by the new Movie SiCKO. Earlier this month, I blogged on pharmaceutical fraud and SiCKO, the new startling news is that Think Tanks such as The Cato Institute are hosting symposiums to mobilize a force to rebut the movie. This is another example of dark forces of the Corporatist Party wanting us to sit back and believe their propaganda and accept that fraud is a "normal" way of doing business, and the sale of untested poison to the American public is A-Okay.
Who knows what they will think up next. It is going to be interesting.
Brian
Preparing my mind for on slaught of Jedi Mind Tricks these people are ready to throw at us.
Click Here to read more ion the subject in a recent blog post by Ed Silverman on Pharmalot.
Posted on June 24, 2007 by LaBovick Law
Eagle Global Logistics, paid the United States $300,000 to settle a qui tam suit. The company’s local agent in Kuwait allegedly overcharged the military for rental charges on shipping containers to Iraq for the period from January through June of 2006, according to the Justice Department. The Houston-based company’s containers were for shipments of military cargo to Iraq under an EGL subcontract with KBR, the prime contractor for the U.S. Army’s LOGCAP III contract for logistical support of military operations overseas.
This matter stems from allegations in a suit filed against EGL under the qui tam or whistleblower provisions of the False Claims Act. Under the False Claims Act, private persons may bring a suit on behalf of the United States alleging the submission of false claims to the government and may receive a portion of the proceeds of the suit. The whistleblowers, David Vavra and Jerry Hyatt, will receive $36,000 as their part of the settlement. Congratulations to these brave whistleblowers for speaking up.
Click Here to read more on this case from the Department of Justice.
Posted on June 22, 2007 by LaBovick Law
Federal authorities have filed a qui tam suit seeking $1 million in fraudulent claims plus civil penalties against a company that operated five nursing homes in the St. Louis area, saying that the facilities provided what amounted to "worthless" health care.
The suit claims that Cathedral Rock Corp., based in Fort Worth, Texas, committed Medicaid and Medicare fraud when it billed the government for care it didn't provide, U.S. Attorney Catherine Hanaway said in a statement to the press.
Investigators, who intervened after two nurses filed a "whistle-blower" lawsuit in 2003, found numerous residents at the facilities suffered from dehydration, weight loss, and preventable bed sores that eventually led to amputations.
The two nurses, Michele Kimball and Anna Juelfs, who filed the original suit, "qui tam action" could receive 15 percent to 25 percent of the damages recovered in the action, according to U.S. Attorney Hanaway.
Click Here to read more about the case in the St. Louis Post Dispatch.
Posted on June 18, 2007 by Brian F. LaBovick, Esq.
Well, well, well! Poor Dr. Palazzo. She was caught with her hand in the fraud cookie jar. Yesterday we found out that the US Attorney’s office in New Orleans is filing a 55 count indictment on Dr. Maria Carmen Palazzo, a local psychiatrist. Dr. Palazzo was falsifying her data on Paxil (manufactured by GlaxoSmithKline) clinical trials on CHILDREN. She made a grand total of just over $653,000 and failed to maintain and prepare the proper records required by the FDA for evaluation of the drug’s safety. Now this error is going to cost her something big! The total indictment could run approximately $10 million in fines and 445 years in prison!
Wow, and who said crime and fraud pays!
Click Here to read more on this topic from an Associated Press article.
Posted on June 15, 2007 by Brian F. LaBovick, Esq.
The level of fraud in America today is sickening. There is no comparison between the qui tam fraud in corporate America and the fraud of fake injury “victims”. I guarantee you the damage done to the American economy, the American ideal and the American tax system from qui tam fraud is 1000 times greater than all of the insurance scams put together. The fraud is so disturbing that it is actually hard to believe.
Coming this summer is a movie called
Sicko. It is a documentary about the health and drug industry. I am almost certain it will document the conspiracy going on between doctors, drug manufacturers and the
FDA.
As we speak (or rather, as you read) the drug lobby and their corporatist party lackeys are trying to make the FDA the final oversight of the drug industry and take away a injured victims right to sue if they are hurt by a drug. It is my prayer that this movie spurs politicians NOT to permit the drug lobby to have the FDA be there ONLY oversight. We must keep the drug companies honest and the only way they will be an honest broker is if they are held accountable through civil lawsuits. Is the system perfect? Certainly not. But it is far better than any other system out there. It is only through the power of the pocketbook that we can control the moral-less corporate beast.
So, you ask, why am I so “up in arms” about the
FDA issue right now?
Continue Reading...
Posted on June 6, 2007 by LaBovick Law
The United States and the State of Texas have settled a qui tam lawsuit against the Harris County Hospital District (Hospital District) for more than $15 million, according to United States Attorney Don DeGabrielle. The terms of the settlement, calls for the Hospital District to pay to the United States and the State of Texas $15,449,126. This is one of the largest settlements for cases brought under the False Claims Act in the Southern District of Texas.
The whistleblower/ relator, Robert E. McCaslin, Jr., an employee in Patient Billing Services for the Hospital, filed a lawsuit under the qui tam provisions of the False Claims Act alleging that the Hospital District was making false claims and false statements with reimbursement claims being submitted to the Medicare and Medicaid programs for the treatment of patients. The Hospital District was accused of submitting claims to the Medicare and Medicaid programs without first seeking reimbursement from primary carriers as required by each program’s rules and regulations. The end result of this practice was that Medicare and Medicaid paid claims that should have been paid by other responsible third party insurers.
The Federal and State False Claims Acts allow private citizens, often known as whistleblowers or relators, with knowledge of fraud against the government to present those claims by bringing a lawsuit on behalf of the government. If the allegations are proven to be true, the private citizen, whistleblower/ relator, may be entitled to share in the recovery. The whistleblower/ relator can receive as much as 30% of what the the government recovers, depending upon the case.
Congratulations to Assistant United States Attorney Andrew A. Bobb and Texas Assistant Attorney General Lara Silva for a job well done in conducting an excellent an investigation and settlement negotiations.
Click Here to read more from the U.S.State Attorneys Office in Texas
Posted on May 29, 2007 by LaBovick Law
Last week, the Justice Department investigators seized records from a major medical helicopter provider, Air Evac Lifeteam. They are being investigated for possible health care fraud.
The company is cooperating with authorities and have turned over documents to the Federal bureau of Investigations. Health Care investigations can typically be about improper billing matters, Medicare or Medicaid Fraud.
Air Evac Lifeteam has grown their business by focusing on servicing communities in rural areas. They sell minimal annual subscriptions under $100. When the subscriber needs emergency medical attention, they call Air Evac instead of 911. This is economical compared to the cost of an ambulance ride. How does Air Evac make their money? They bill the private insurance company, Medicare or Medicaid for anywhere between $5000 - $10,000 for the helicopter ride to the hospital. I know this is a premium, service, but this price seems expensive for the service.
Time will tell if the FBI investigation will uncover a Qui Tam claim for Medicare or Medicaid or even false billing evidence against Air Evac Lifeteam. Let's hope the whistleblower in the qui tam suit had all of the necessary documents, so they can share in an award if there turns out to be one.
Click Here to Read New York Times article on Air Evac and the potential health care fraud.
Posted on May 21, 2007 by LaBovick Law
A recent crackdown on heath care fraud in Miami, a health care fraud hot spot, yielded 38 arrests. The accused were charged with billing Medicare for prosthetic limbs, drugs, and air mattresses among other items. They submitted $142 million in bills for unnecessary or nonexistent equipment and supplies and used funds for personal items such as a $200,000 Rolls Royce.
The Health and Human Services Secretary Michael Leavitt, visited several of the businesses late last year and described his shock at peering into office fronts in a Miami area strip mall and seeing little more than a chair and a few pieces of equipment on the wall. He called the fraud "blatant."
According to a recent release from the Department of Justice, the Medicare Fraud Strike Force is a joint task force of federal prosecutors supervised by the Criminal Divisions Fraud Section in Washington and the Office of U.S. Attorney Alexander Acosta of the Southern District of Florida.
Let's hope there was a whistleblower involved in these arrests and revelation of the $142 million in over-billing. It is always a good thing to have a private citizen act as a whistleblower and receive recognition for their efforts in the fight against Medicare and health care fraud. It is good to know that we have such a strong task force in our own backyard.
Click here to read more from the Department of Justice and the Washington Post on this Southern Crackdown on Health Care Fraud.
Posted on May 12, 2007 by LaBovick Law
The United States Department of Justice celebrates another win in the fight against Medicare Fraud by corporations. This time, it stemmed from a case against The SCOOTER Store Inc. based out of San Antonio. The SCOOTER Store Inc. will pay the United States $4 million, and give up many millions more in pending claims for reimbursement to Medicare.
This settlement is part of our ongoing commitment to fighting abuse of Medicare's durable medical equipment benefit," said Assistant Attorney General Peter D. Keisler.
The Scooter Store Inc. was accused of fraudulent medicare claims for their motorized scooter. The company ran a savvy tv and print advertising campaign that enticed seniors to call them regarding a mobilized scooter. The ads were very effective in getting the seniors to sign up and purchase the scooters. How could anyone refuse, when they were told that medicare and insurance would pick up the cost? The real problem began when the company coerced doctors into prescribing the mobile scooter as a medically necessary item. It does not stop there, The company would then bill Medicare for power wheelchairs which cost about $5000 to $7000. This was considerably more than the $1,000 to $2,000 advertised motorized scooter. If it could not get any worse, The Scooter Store Inc., sold used equipment as new and unnecessary additional accessories.
Thankfully, the brave whistleblower, a former Scooter Store, Inc., employee came forward with this information. As a result of this bravery, the whistleblower will be awarded the statutory amount of $3,228,251, according to the Department of Justice.
Continue Reading...
Posted on May 11, 2007 by LaBovick Law
Medicis Pharmaceutical Corporation of Scottsdale, Ariz., agreed to pay the United States $9.8 million to settle allegations that the company violated the False Claims Act with respect to claims submitted to Medicaid, according to a Department of Justice announcement earlier this week. The settlement resolves allegations that Medicis promoted the use of a topical skin preparation, Loprox, for use on children under the age of 10, without approval by the Food & Drug Administration (FDA).
The United States and the whistleblowers – four former Medicis employees – alleged that from approximately November 2001 through April 2004, Medicis sales personnel targeted pediatricians, urging the doctors to use Loprox as a treatment for diaper rash.
According to Assistant Attorney General Peter D. Keisler, "Pharmaceutical companies need to know that they will be held accountable for off-label marketing schemes and other illegal activities that affect those programs.” More pharmaceutical companies should be put on notice, they will pay for their illegal activities.
The four whistleblowers will collectively receive in excess of $1,078,000 as their statutory award. Under the qui tam provisions of the False Claims Act, whistleblowers can file an action on behalf of the United States and receive a portion of the settlement if the government reaches a monetary agreement with the defendants.
Click Here to read more on this Medicis Settlement from the Department of Justice.
Medicis announced this week, their first quarter 2007 profits were better than expected. I guess confession is good for the soul. They are trying to put their past misdeeds behind them and move forward. Hopefully, they will learn from the past.
Posted on May 8, 2007 by LaBovick Law
Is there corruption in our Student Financial Aid System by Student Lending Companies: Kickbacks and Payoffs to Schools? According to a recent article in The New York Times, the answer is yes. Jon Oberg, a veteran researcher at the Department of Education warned his supervisors in 2003, that student lending companies were improperly collecting millions of dollars. Since he was set to retire in 18 months, he was told to work on other projects and not to worry about this. Thankfully he did not listen. Although being reassigned and being treated like a pest in the department, he continued his research on his free time and uncovered startling reports of massive subsidy over payments by lenders. This whistleblower deserves much praise for his bravery and perseverance.
Click Here to read The New York Times article on how this retired whistleblower helped save taxpayers millions of dollars if not billions.
Posted on May 4, 2007 by LaBovick Law
Is there a correlation between a doctor's prescriptions to patients and the relationship with the prospective pharmaceutical company? There could be. According to a survey, The New England Journal of Medicine recently reported physician relationships with the pharmaceutical industry. Most physicians (94%) reported some type of relationship with the pharmaceutical industry, and most of these relationships involved receiving food in the workplace (83%) or receiving drug samples (78%). More than one third of the respondents (35%) received reimbursement for costs associated with professional meetings or continuing medical education, and more than one quarter (28%) received payments for consulting, giving lectures, or enrolling patients in trials.
The survey found that 83% of physicians reported they had received food or beverages paid for by a pharmaceutical or medical products company. Similarly, 78% of doctors received free drug samples, 35% were reimbursed for professional meetings, and 28% were paid for consulting, speaking, or enrolling patients in clinical trials.
This gives one food for thought: Are doctor's prescribing the best drugs to patients based on relationships or the best drug of choice? There is a fine line between marketing and buying an endorsement from a doctor. Whose job is it to determine if anyone crossed the line? Who looks out for the patients? These are just a few of the questions that need to be answered. Hopefully, brave men and women in the pharmaceutical industry will come forward and shed light on any unfair and deceptive practices that put the public at risk.
Posted on May 3, 2007 by LaBovick Law
The federal government has accused southwest Oklahoma City hand surgeon Houshang Seradge of Medicaid and Medicare fraud and is seeking more than $40 million in damages from the surgeon, his associates and family members.
The government's civil lawsuit accuses Seradge and his associates of filing more than 6,400 false Medicare, Medicaid and TRICARE/CHAMPUS claims totaling more than $2.6 million.
The Whistleblowers/relators are being accused of being former disgruntled employees. The suit became public on April 19th after the federal government decided to intervene in the case.
Click Here to read more in The Oklahoman Newspaper
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Posted on April 27, 2007 by LaBovick Law
The U.S. Supreme Court recently refused to throw out a massive False Claims Act suit against University of Phoenix, that charged the private university with defrauding the government of millions of dollars in federal education loan funds. The suit will proceed to Trial in Sacramento. It will be interesting to see the developments of this high profile education case.
In 2003, a False Claims Act suit was filed by two former employees who alleged that the University of Phoenix, which offers degrees to midcareer workers, violated federal rules that bar giving incentives to employees to recruit students to enroll in the college.
Two years ago, after a probe by the U.S. Department of Education, the University of Phoenix paid the government $9.8 million in compensation to settle the False Act suit.
Click Here to Read more of the story in the L.A. Times
Posted on April 27, 2007 by LaBovick Law
The United States has intervened in three qui tam suits accusing Health Essentials Solutions Inc. (HES) of false claims billings to Medicare, the Justice Department announced today. Specifically, HES is accused of upcoding – the practice of improperly assigning a diagnosis code to a patient discharge that is not supported by the medical record for the purpose of obtaining a higher level of reimbursement. Additionally, it is alleged that the Kentucky-based provider of geriatric care knowingly charged Medicare for medically unnecessary services.
The investigation of the allegations in the qui tam complaints was conducted by the U.S. Attorney's Office in Louisville, Ky., the Department's Civil Division, and the Office of Inspector General of the Department of Health and Human Services.
Click Here to Read more about the case from the DOJ
Posted on April 27, 2007 by LaBovick Law
Dey Pharmaceuticals is back in the news. Earlier this month, they settled a Medicaid Fraud claim with Hawaii for $1 million. Reported in this blog April 10.
This week, Dey settled a new Medicaid Fraud Claim in Massachusetts for $2.9 million. The Massachusetts Attorney General Martha Coakley successfully settled the Medicaid Fraud case, against the generic pharmaceuticals manufacturer for $2.9 Million. In the settlement, Dey agreed to pay the Commonwealth of Massachusetts to settle litigation pending in Boston.
The Commonwealth sued Dey for allegedly inflating the "wholesale acquisition cost" (WAC) it reported to national price reporting services. The Commonwealth alleged that by reporting the inflated prices, Dey caused the Massachusetts Medicaid program to pay inflated amounts for Dey drugs dispensed by pharmacies to Medicaid recipients.
Click here to read more from the Office of the Massachusetts Attorney General
Posted on April 18, 2007 by LaBovick Law
Cell Therapeutics, Inc. (CTI) settled all government claims arising out of a Department of Justice investigation into allegations regarding alleged overpayments by Medicare to doctors who prescribed the anti-cancer drug, TRISENOX. As part of the settlement, CTI will pay $10.5 million plus interest and the Department of Justice has agreed to fully release CTI from all liability for the issues under investigation, including claims asserted in a qui tam lawsuit. The terms of the settlement contain no admission of wrongdoing by CTI.
According to a recent Seattle Times Article, Peter Kessler, Assistant Attorney General for the Justice Department's Civil Division, stated "They misled a lot of doctors by telling them that the drug was medically accepted." Cell Therapeutics blamed Medicare billing issues on consulting firm, Lash Group, a unit of pharmaceuticals distributor AmerisourceBergen. Lash denies the company's allegations.
Click Here to read more on the Seattle Times Article
Posted on April 13, 2007 by LaBovick Law
Two subsidiaries of Pfizer Inc. have agreed to pay fines totaling $34.7 million for offering a kickback to recommend company drugs and for illegally promoting the human growth hormone product Genotropin for nonapproved uses, according to federal prosecutors in a Boston Globe article.
Prosecutors allege that Pharmacia & Upjohn Co. offered to overpay a subsidiary of a pharmacy benefit manager by $12.3 million in the hope the company would, in turn, recommend Pharmacia's drug products to its clients.
In a Press Release by the U.S. Attorney's Office in Massachusetts, U.S. Attorney Michael Sullivan, states that “It is important for the public to recognize that growth hormone has not been shown to be safe and effective for anti-aging, cosmetic or athletic uses, and it must not be promoted for such uses. Sullivan noted that Pfizer, acted responsibly when it self-disclosed to various federal government agencies, in May 2003, PHARMACIA’s unlawful promotion of human growth hormone.
Whistleblower, Peter Rost, former Vice President at Pfizer had a different spin on the events. He told the Corporate Crime Reporter "The Justice Department praised Pfizer for self-reporting; but Pfizer would have done nothing if I didn’t twist its arm. I was floored when I read the press release. They have one guy who lost his career, lost his job for doing the right thing. That would be me. And they praised the company that fired me?”
Posted on April 10, 2007 by Brian F. LaBovick, Esq.
Does anyone watch TV out there? I can’t believe what is going on. Since I started prosecuting whistleblower cases I see the entire world through big Qui Tam colored glasses. If not looking at an actual Qui Tam case, then judging by TVs latest content, the world is very aware of the huge number of fraud claims which are being made on our government and which are tax dollars are actually paying.
What am I talking about? The
Sopranos on HBO. The lead character,
Tony Soprano is taking on a new and burgeoning criminal enterprise called Medicaid/Medicare fraud. In the first episode of The Soprano’s last season Tony Soprano is making plans to use a doctor to defraud Medicaid and Medicare for ghost MRIs. In other words, he is trying to conspire with a doctor to bill Medicare and Medicaid for MRI tests that are never actually completed. Now that is good business and it doesn’t take Tony Soprano to think it up. Anyone who pays any attention to fraud cases can see that
80% of the claims now being prosecuted are for health care related fraud. Ghost MRIs are real, not spooky, but real none the less.
But Tony is an enterprising man. He isn’t going to stop at some low level Medicare fraud. He is also jumping into the prescription drug fraud mess that our country refuses to face head on. Tony is creating a prescription drug ring by importing Fosamax in from Canada. Importing may be a bit euphemistic; we could say smuggling for clarity’s sake. Fortunately the people who are buying the Fosamax are not getting very effective dosages of Fosamax because the drugs Tony chooses to import are expired.
Continue Reading...
Posted on April 10, 2007 by LaBovick Law
Dey, Inc, pharmaceutical manufacturer of prescription drugs for the treatment of respiratory diseases has agreed to pay the state of Hawaii over $1 million to settle claims for price-gouging Hawaii's Medicaid program. Since 2003, Dey has settled similar lawsuits in Texas, Connecticut, Idaho, Ohio and Missouri.
Click here to read more about the Dey, Inc. Medicaid settlement in Hawaii
Posted on March 29, 2007 by LaBovick Law
The owner of three Miami durable medical equipment companies, Ricardo R. Aguera, was recently convicted by a jury of Medicare fraud - part of a larger kickback conspiracy. Federal prosecutors have launched new efforts to combat the growing problem of medicare Fraud in South Florida. The government is seeking to recoup an additional $30 million from 23 clinics and durable medical equipment companies. Four other defendants - Ivan Aguera, Robert Berenguer, Aristides Berenguer and Carlos Berenguer - entered guilty pleas to all counts in the indictment without plea agreements prior to trial. All five defendants are related and run health care companies that were involved in the fraud scheme.
The medicare fraud scheme involved, pharmacy owners billing the Medicare program over $20 million. Half the money paid was kicked-back to the six defendants in exchange for bringing patients to the pharmacies.
Click here to read more on this medicare fraud case in South Florida Business Journal.
Posted on March 26, 2007 by Brian F. LaBovick, Esq.
Corporate America wake up. The fraud penalties in the Federal False Claims Act are the most civilized penalties in the world. The worst thing the government will do in a civil fraud case is give you triple damages and penalties. Yes, it is a lot of money, but if you ever feel the full force of the law against you, you had it coming.
Now, in the real world, the penalties are much stiffer. Take China for example. In a recent Washington Post article, a nice guy named Wang Zhendong figured out that selling his fellow citizens ant farms would be a great idea. Unfortunately he priced his ant farms in a way that the government of China found to be fraudulent.
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Posted on March 22, 2007 by Brian F. LaBovick, Esq.
I don’t know why, but I just love it when big corporate powers get hammered. Maybe you don’t read the Chicago Sun Times newspaper or keep up with Qui Tam based fraud nationally, but if you do then you know that last week an Illinois HMO was hit with a $334 million dollar judgment. This is the largest fraud verdict in the history of Illinois.
The beauty of the judgment is that not only did the company get hit with a $144 million dollar judgment but they were also slapped with a huge penalty by the Judge. God Bless him for using the law to correct bad behavior. Everyday huge corporations laugh at the anti fraud laws and say to themselves, “we are above the law, even if we are caught, we will tie this thing up forever in court and when the chips finally fall we will “negotiate” out of paying any penalty and just pay back what we defrauded our great nation. “ Be warned, if you end up in Judge Leinenweber’s court, he is going to properly punish your company for fraud.
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Posted on March 2, 2007 by LaBovick Law
Universal Health Services is being investigated for possible Medicare fraud. This case is regarding an investigation under the False Claims Act of compliance with Medicare and Medicaid rules and regulations pertaining to the employment of physicians and the solicitation of patient referrals from physicians.
The company was downgraded by Bear Stearns after an announcement that United Health Services received a search warrant in a criminal investigation of its South Texas affiliates.
Posted on February 20, 2007 by LaBovick Law
Long line of pending cases involves milking government health-care program
According to a recent report by federal officials, members of Congress and a Watchdog group, the nation's big drugmakers have been systematically overcharging the Medicaid health-care program for the poor. They have been reaping billions of dollars in illegal windfalls at the expense of the taxpayers.
Drugmakers are required by law to provide Medicaid with the same discounts they offer to big managed-care plans and hospital chains, but they have been disguising those prices, Ronald Tenpas, a U.S. associate deputy attorney general, told the House Committee on Oversight and Government Reform earlier this month. Read More on the Article from Star Ledger
Posted on February 18, 2007 by Brian F. LaBovick, Esq.
My favorite fraud is defense contractor fraud. This is the original fraud that old Abe Lincoln wanted to sniff out when he signed into law the first incarnation of our present law in 1863. Think about it, at that time the country was engaged in a great civil war. On both sides the governments were promising huge benefits to anyone who could supply the armies with guns, mortar, bullets and food. It only made sense that the wonderful patriotic citizens of the northeast would screw the government to make outrageous profits whenever possible.
Well not much has changed. On January 18, 2007 we found out that ITT Corp. the largest manufacturer of night-vision goggles, failed to supply the U.S Army in Bosnia with up to $200 million of security guards. (See: Blanc v. ITT, 07-cv-401, So. Dist of New York). In 2002 ITT was given the contract to supply the Bosnia multinational security forces with 245 security guards. Instead of actually giving the guards ITT decided to supply ghosts or rather imaginary people as guards at the station. This type of deception has been coined ``ghost-posting.'' ITT failed to post guards at the armory, the base defense operations center, and at least three of the five guard towers according to the whistleblower.
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Posted on February 16, 2007 by LaBovick Law
Senator John F. Kerry and Sen. Byron Dorgan sponsored legislation that punishes war profiteers and protects whistleblowers. According to Senator Kerry, in a Boston Herald article " Millions have been wasted in the Iraq reconstruction effort. It’s a disgrace that we have to answer to parents who ask how we can allow corporate cheaters to reap massive profits on the battlefield of Iraq when their sons and daughters are serving without proper equipment." The legislation seeks to prevent Defense Contractor fraud, waste and abuse.
Pamela Leavy, Editor of the Democratic Daily Blog, wrote an excellent Section- by- Section Analysis of the Honest Leadership and Accountability in Contracting Act Legislation. Key Highlights:
1. Punishes War Profiteers – Sec. 101 -Max. 20 years in prison and minimum $1 million in fines
2. Cracks Down on Big Corporate Cheaters – Sec. 102 - suspension and debarment
3. Requires Full Disclosure of Contract Abuses – Sec. 103 - greater transparency in contracting
4. Forces Real Contract Competition – Secs. 201 and 202 no umbrella contracts over $100 million
5. Bans Corporate Cronyism in Contracting – Sec. 211 - requires conduct contract oversight
6. Eliminates Conflicts of Interest for Federal Contracting Employees – Sec. 212 -
7. Ends Cronyism in Key Government Positions – Sec. 301 end unqualified political appointees from holding key jobs relating to (1) federal contracting or (2) public safety.
8. Strengthens Whistleblower Protections – end retaliation against whistleblowers
Read Pamela's Section Analysis of the Honest Leadership and Accountability in Contracting Act
Posted on February 15, 2007 by Brian F. LaBovick, Esq.
Does the thought of unsealed enriched radioactive uranium sitting next door sound fun? Does the Department of Energy not investigating an energy company who failed to clean up the radioactive material sound typical for the Bush administration? Well a four year old lawsuit was finally unsealed in Ohio in November 2006. The lawsuit alleges that the companies the government paid to clean up a uranium enrichment plant in Southern Ohio simply did not do the work. Since I am from a small town in Southern Ohio and I now live in Florida this hits home. It is especially hurtful because it wasn’t until I came to Florida that I realized there were people in the world who would take your money and NOT do the work. It is sad that it actually happens in Ohio too.
Continue Reading...
Posted on February 14, 2007 by Brian F. LaBovick, Esq.
Everyone knows that if you blow the whistle on your company for ripping off the Federal Government that the False Claims Act will protect you. In fact, the law specifically states that …. Any employee who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment by his or her employer because of lawful acts done by the employee on behalf of the employee or others in furtherance of an action under this section, including investigation for, initiation of, testimony for, or assistance in an action filed or to be filed under this section, shall be entitled to all relief necessary to make the employee whole. Such relief shall include reinstatement with the same seniority status such employee would have had but for the discrimination, twice the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys' fees. An employee may bring an action in the appropriate district court of the United States for the relief provided in this subsection.
However, under a new decision of December 2006 this law will not apply unless, like the detectives in Drag Net you have the facts. Just the facts. The whistleblower can’t rely on rumors to report fraud.
Continue Reading...
Posted on February 13, 2007 by LaBovick Law
A Florida engineering firm, PBSJ, paid over $6.4 million to settle allegations that it submitted false and fraudulent claims to the government thereby violating the False Claims Act, according to the Department of Justice.
A $36 million embezzlement scheme that took place over 13 years was perpetrated by PBSJ’s former Chief Financial Officer and two other employees. The scheme involved shifting funds and fabricating entries in the company’s books and records to cover up the fraud, and resulted in PBSJ’s audited overhead rates being overstated. More than a dozen federal agencies were affected by the fraud, including the Departments of the Army, Transportation, Interior and Homeland Security. All three involved parties plead guilty to criminal charges.
DOJ Release on this case
Posted on February 12, 2007 by Brian F. LaBovick, Esq.
The medical profession is always under attack. Doctor reimbursements are constantly being reduced by health maintenance organizations or insurance companies. Doctors, in their desire to keep making significant revenue, have had to get tough; and when the going gets tough the tough get creative. In Chicago the MRI centers and the doctors got real creative in developing a sophisticated scheme to make more money on MRIs.
In their scheme the MRI centers would “lease” the MRI facility to the doctors. The MRI facility made it appear that the doctors were in charge of the machines and the staff. In reality, the doctors only referred patients to the MRI center. Also, the doctors billed the insurance company for the entire charge and the MRI facility worked at a reduced fee. This allowed doctors to keep the difference between the actual cost of the MRI (a low amount) and the amount of money the health insurance paid on the claim (a much greater amount). For instance, in this case, the doctor obtains a lease rate that costs $300 for an MRI. They refer patients to the MRI center, where the MRI is completed at a cost of $300.00. However, the doctor charges the Health Insurance Carrier $1500.00 for the MRI. When the health insurance pays the $1500.00 claim, the doctor makes $1100 for only referring the patient to the MRI center.
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Posted on February 12, 2007 by LaBovick Law
Medicare is a lifeline to millions of Americans. For the elderly it is often the only source of medical care, treatment, and nursing facility options. Medicare also creates jobs for thousands of doctors, nurses, technicians and other health care workers, whose livelihoods are funded by Medicare programs. The program is massive, and like many large government programs, opportunities for fraud frequently arise. The Medicare Ombudsman's Office is devoted to controlling waste and fraud, but can only do so much with limited resources. Thus the bulk of the responsibility for identifying unscrupulous medical billing practices is placed upon front line health care workers including caregivers, specialists, and medical billing and office staff.
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Posted on February 11, 2007 by LaBovick Law
“In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex.” - President Dwight D. Eisenhower, 1960
Having served as army general and President, Eisenhower saw potential for the military-industrial complex to perpetrate massive fraud on the American people. But he was not the first President to issue such caveats. Abraham “Honest Abe” Lincoln urged lawmakers to reform military-industrial oversight upon discovering massive fraud in government military contracts as far back as 1863. Today, thanks to concerns voiced by great men like Eisenhower and Lincoln, our government has agencies devoted to controlling waste and fraud. But these agencies can only do so much, and like much of what makes America great, the bulk of the responsibility is placed upon the American people themselves.
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Posted on February 11, 2007 by LaBovick Law
Department of Justice (DOJ) - False Claims Act Compliance and National Initiatives
In fiscal year 2001, the Department of Justice (DOJ) reported recoveries over $1.2 billion related to civil health care fraud. The DOJ’s use of its False Claims Act authority has included several nationwide investigations of hospitals—projects known as national initiatives. These investigations resulted in significant concerns from hospital industry representatives.
The DOJ issued guidance on the appropriate use of the act in civil health care matters, including national initiatives to emphasize the importance of using the act in a fair and even-handed manner and to implement new procedures regarding national initiatives.
whistleblower.labovick.com/GAO_Med Fraud_DOJ_FCA_compliance_2002.pdf
Posted on February 10, 2007 by LaBovick Law
Federal Statute 31 USC 3730 - Civil Actions for False Claims
(a) Responsibilities of the Attorney General. - The Attorney General diligently shall investigate a violation under section 3729. If the Attorney General finds that a person has violated or is violating section 3729, the Attorney General may bring a civil action under this section against the person.
whistleblower.labovick.com/31 USC3730_PDF.pdf
Posted on February 10, 2007 by LaBovick Law
Whistleblower guidelines - Directions and guidance for Aviation employees.
The whisleblower protection program provides protection against discrimination for employees of air carriers, employees of contractors to air carriers, and sub contractors to air carriers, who report air safety information to their employer or to the federal government.
whistleblower.labovick.com/FAA_whistleblower_Guidelines.pdf
Posted on February 10, 2007 by LaBovick Law
31 USC 3729 - Federal statute re: liability for False Claims Acts
(a) Liability for Certain Acts. - Any person who knowingly presents, or causes to be presented, to an officer or employee of the United States Government or a member of the Armed Forces of the United States a false or fraudulent claim for payment or approval;
whistleblower.labovick.com/31 USC 3729_PDF.pdf
Posted on February 10, 2007 by LaBovick Law
Payments resulting from improper billing represent a major threat to the fiscal integrity of Medicare—the federal health insurance program serving approximately 39 million elderly and disabled Americans. The Department of Justice (DOJ) places a high priority on identifying improper billing of Medicare and other federally funded health care programs, and it reported recoveries of over $840 million in fiscal year 2000 related to civil health care fraud. Many of these recoveries are related to the False Claims Act, which provides for substantial damages and penalties against providers who knowingly submit false claims to federal programs
whistleblower.labovick.com/GAO_Med_ DOJ_False_Claims_Act_Guidance(2).pdf
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Posted on February 10, 2007 by LaBovick Law
Under the qui tam provision of the False Claims Act, the relator (plaintiff) files an action on behalf of the U.S. Government. The Act allows a wide variety of people and entities to file a qui tam action, common types include: employees, former employees, state and local governments, federal employees, public interest groups, corporations and private organizations
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Posted on February 10, 2007 by LaBovick Law
“There is no kind of dishonesty into which otherwise good people more easily and frequently fall than that of defrauding the government." Benjamin Franklin
In Qui Tam litigation a private citizen (the whistleblower) who knows of fraud committed against the government may, through his own privately retained lawyers, file a lawsuit to recover the losses caused by the government fraud. The False Claims Act provides huge financial incentives to citizen whistleblowers to retain attorneys and come forward, prosecute these lawsuits and fight government fraud.
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Posted on February 10, 2007 by Brian F. LaBovick, Esq.
When preparing for a False Claims Act case, you can never be over prepared. Documentation with dates, files, records and detailed accounts are required to move forward with a False Claims Act case. See below for a few questions that need to be answered when you are preparing for a False Claims Act case:
Do you have a list of the documents, computer files and other proof? Are these documents in a safe place?
Do you have a list of everyone that has knowledge of the matter? Can you locate them?
Do you have names of supervisors and others who would have participated in the false claim?
Do you have a breakdown of the Corporate structure of the company involved in the false claim?
Do you know specific laws, regulations, rules and procedures that were violated by the false claim?
All of the above information is necessary to determine if a false claim or fraud has taken place.
