Whistleblower Lawyer & Attorney : LaBovick Law Firm, Florida : Federal False Claims Act, Qui Tam

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.

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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.

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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.). 

 

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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.

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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

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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

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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.

 

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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

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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

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"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".

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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.

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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.

 

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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.

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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.

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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 and the ex. Rel. Melanie Hagan. The Defendant's named in The USA et al Relator v McKesson et al  include McKesson, Cardinal Health, Amerisourcebergen and Henry Schein, Inc.

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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.  

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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.

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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.

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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.

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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

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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.

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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...

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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.

 

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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

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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

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"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

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It is finished... Purdue Pharma Executives were sentenced by Federal Judge James P. Jones, yesterday in Virginia. Judge