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

Two Florida Corporations, American Therapeutic Corporation (ATC) and Medlink Professional Management Group Inc., pleaded guilty to a Medicare fraud scheme of $200 million according to the Departments of Justice and Health and Human Services (HHS) announced.

ATC operated partial hospitalization programs (PHPs) in seven different locations throughout Florida. A PHP is a form of intensive treatment for severe mental illness. Medlink operated as a  "management company” for health care businesses. In reality, ATC and a related company, the American Sleep Institute (ASI), were Medlink’s only clients.

ATC and Medlink are each charged with conspiracy to commit health care fraud in a superseding indictment unsealed on Feb. 15, 2011. ATC is also charged with health care fraud and conspiracy to defraud the United States and to pay and receive illegal health care kickbacks.

Lawrence Duran, 48, and Marianella Valera, 39, owners of American Therapeutic Corp., were indicted back in October and  22 others -- including company employees, psychiatrists and patient recruiters -- have also been charged.

U.S. Attorney Wifredo Ferrer for the Southern District of Florida, stated the following:

The defendants altered patient files, diagnoses and medication types and levels to make it appear that patients being treated qualified for PHP treatments. This was done so that the defendants could fraudulently bill Medicare for more than $200 million in medically unnecessary services. We are pleased to have put these unscrupulous operators out of business.”

Special Agent in Charge John V. Gillies of the FBI’s Miami Field Office was on target when he stated the following:

“No matter what the scheme or how elaborately it was disguised, personal and corporate greed by these two corporations and their owners defrauded taxpayers of millions of dollars. Ultimately, health care fraud robs from the elderly and disabled.

As indicated in this case, fraud is usually not accomplished alone. It takes one to mastermind and several players to make it work. This is how a whistleblower comes across information that his company is engaging in fraudulent practices.

Since March 2007, thanks to the valiant efforts of the Medicare Fraud Strike Force, over 1,000 defendants who collectively have billed the Medicare program for more than $2.3 billion, have been prosecuted on fraud charges.This could not have been done without the combined efforts of whistleblowers and the Health Care Fraud Prevention and Enforcement Action Team (HEAT).

Under the False Claims Act. whistleblowers have an added incentive to report fraud. This Act allows whistleblowers to receive a reward of 15-25% if the government intervenes in the lawsuit. If the government chooses not to proceed, the whistleblower can pursue the case on behalf of the government alone and will be entitled to 25-30% of the governments proceeds in qui tam or false claims cases.

If you are considering bringing a Florida lawyers against a former employer, contact a qui tam attorney to evaluate the strength of the complaint and protect your rights.

Click on the following link to read more on the following links:

Two Miami-Area Corporations Plead Guilty to More Than $200 Million Medicare Fraud - FBI

Couple pleads guilty to Medicare Fraud - Sun Sentinel

Understanding Qui tam and How the False Claims Act works - Whistleblower Law Blog

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Did use of information obtained by the Freedom of Information Act (FOIA) just become a little less free? The recent Supreme Court Schindler Elevator Corporation vs. US ex rel. Kirk decision in a False Claims Act (FCA) case sheds some light on this topic. The Supreme Court ruled five to three that information obtained via the FOIA cannot be used for pursuing a claim under the FCA.

To understand the meaning of the Supreme Court's ruling and its potential impact on the role of whistleblowers, it may help to better understand the three parts of this case: The Freedom of Information Act, the False Claims Act, and the specific circumstances of the Schindler vs. Kirk case.

Freedom of Information Act
The Freedom of Information Act went into effect in 1967. It allows for disclosure, in full or in part, of information that has previously been unreleased by the federal government. Under the law, most documents produced by the federal government are available for scrutiny. Exclusions include anything that might threaten national security, hinder law enforcement efforts, or reveal commercial or financial trade secrets, amongst other things.

False Claims Act
Enacted during the Civil War, when many people were fleecing the Union Army, this law allows an individual person to act on behalf of the federal government to file actions against a company trying to falsely bill or exploit the government. This provision is called qui tam and in the case of a successful suit by the government, the person who files the claim receives a portion of what the government receives. In essence, the law rewards whistleblowers with a portion of whatever money the government recoups.

There is a caveat in this law, though: Suits cannot be based on public information about a company, such as information from the news media or a hearing. This “public disclosure bar” is meant to prevent opportunistic lawsuits against companies.

Schindler Elevator Corporation vs. US ex rel. Kirk
To make a complex legal story short, Daniel Kirk filed a qui tam suit against his former employer, the Schindler Elevator Corporation. Mr. Kirk, a Vietnam vet, felt that the company was in violation of a 1972 law that required companies not to lock veterans out of jobs and promotions.

Mr. Kirk's claims against his former employer were based in his own experience, but also through reports his wife obtained via the Freedom of Information Act. In the Supreme Court's recent 5-3 decision, they dismissed Kirk's case citing that this latter source of information violated the public disclosure bar of the FCA.

Impact
This case will have quite an impact on future qui tam/ whistleblower cases. The dissenting judges seem to concur. In Justice Ruth Bader Ginsberg's dissent, she stated the following: 

"The decision "severely limits whistleblowers' ability to substantiate their allegations before commencing suit." 

Whistleblowers bringing future False Claims Act cases must use their own experience. Their claim can't rely upon information obtained via the FOIA. The majority opinion of the Supreme Court argued that this will prevent parasitical lawsuits; the dissenting members of the Supreme Court fear that the outcome of this case.

We encourage whistleblowers not to be disheartened by this recent decion. If you have firsthand knowledge about fraud against the government, come forward and report the fraud.  Due to whistleblowers stepping forward the government has collected billions in revenue from penalties and fines from the wrongdoers. Also, whistleblower rewards are in place for whistleblowers bringing information that is helpful in uncovering the fraud.

Click on the following link to read more on  Supreme Court Makes it Harder to Hold Contractors Accountable for Fraud - HuffingtonPost.com
 
Understanding How The False Claims Act Works - Whistleblower Law Blog

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Pharmaceutical giants: Serono Laboratories Inc., EMD Serono Inc., Merck Serono S.A, and Ares Trading S.A. have agreed to settle False Claims Act allegations in connection with the marketing of the drug Rebif for $44.3 million, according to a recent announcement by the Department of Justice.

Under the Serno agreement, proceeds from the settlement will be split between the federal government and various states, with the United States receiving $34.6 million to resolve the federal claims and the states receiving $9.7 million to settle their respective claims under Medicaid.

As a Florida False Claims Act and Whistleblower Law Firm, we applaud the whistleblower, Tim Amato, who brought the qui tam suit in 2005. The False Claims Act permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in any recovery.  Mr Amato will receive $5.19 million out of the federal share of the Serno civil settlement.

Allegedly, health care providers were paid from the launch of Rebif in January 2002 through December 2009, to promote or prescribe Rebif, a recombinant interferon that is used to treat relapsing forms of multiple sclerosis. The payments were made to providers for hundreds of speaker training meetings and programs, as well as payments for attending consultant, marketing and advisory board meetings, all at upscale resorts and other locations. Serono’s actions allegedly resulted in the submission of false claims to federal health care programs including Medicare and Medicaid for the payment of Rebif, i.e., claims that were tainted by kickbacks.

It is a great day in America when the government can combat corporate greed and health care fraud. The False Claims Act is a powerful tool in that effort and allows the government to recover triple the amount of its actual damages, plus a civil penalty of $5,500 to $11,000 for each false claim.

We encourage whistleblowers to come forward and report fraud against the government. If you are aware of corporate fraud against the federal or state government, contact a whistleblower or qui tam lawyer to discuss your legal rights and steps to take on reporting the fraud.

Click on the following links to read more on the $44.3M Serno FCA Settlement:

Pharmaceutical Giant, Serono, Agrees to Pay $44.3 Million to Settle False Claims Act Case - DOJ

Serono to Pay $44.3 Million to Resolve False Claims Act Allegations in Connection With Promotion of Drug Rebif - PharmaLive

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