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. 

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.

If you have any questions on the subject of qui tam or Federal/State False Claims, Former U.S. DOJ Attorney, Brian F. LaBovick, is available to answer your questions, via email or phone.

Click here to read more from the United States Attorney Office, Southern District of Florida.

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.

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.

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.

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.). 

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.

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

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

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.

 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

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

Click Here to read the article "How Qui tam helps fight Medicaid Fraud".

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.

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.

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.

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.

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.

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.  

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.