False Claims Act

Florida-based Hebrew Homes Health Network and its former president and executive director William Zubkoff have agreed to pay $17 million to resolve allegations that they knowingly submitted or caused the submission of false claims to Medicare, the U.S. Department of Justice announced yesterday.  Hebrew Homes provided skilled nursing services at seven rehabilitation and skilled nursing facilities in Miami-Dade County, Florida.  

Hebrew Homes allegedly operated a sophisticated kickback scheme in which they hired numerous physicians ostensibly as medical directors pursuant to contracts that specified numerous job duties and hourly requirements.  The various facilities had several such medical directors under contract at any given time, paying each several thousand dollars monthly.  The United States alleged that in reality these were ghost positions, and that most of the medical directors were required to perform few, if any, of their contracted job duties.  Instead, they were allegedly paid for their patient referrals to the Hebrew Homes facilities, which increased exponentially once the medical directors were put on the payroll.

The Anti-Kickback Statute is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives.  The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by federal health care programs, including Medicare. 

As part of the settlement, Mr. Zubkoff has agreed to resign as Hebrew Homes’ Executive Director and to no longer be an employee of the company.  Also, as part of the settlement announced today, Hebrew Homes has entered into a five-year corporate integrity agreement with HHS-OIG, and has agreed to change its policies on hiring and maintaining medical directors.

The settlement announced today resolves allegations made in a lawsuit filed by Stephen Beaujon, a former CFO of Hebrew Homes, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery.  Mr. Beaujon will receive $4.25 million. 

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

New Jersey-based Garden State Cardiovascular Specialists P.C. (“Garden State”), which owns and operates several facilities in New Jersey under the names NJ Medcare/NJ Heart, has agreed to pay over $3.6 million to resolve allegations that it knowingly submitted or caused the submission of false claims to federal health care programs for tests that were not medically necessary, the U.S. Department of Justice announced last week.

The settlement announced today resolves allegations that Garden State and its principals, Jasjit Walia M.D. and Preet Randhawa M.D., submitted claims to Medicare for various cardiology diagnostic tests and procedures, including stress tests, cardiac catheterizations and external counterpulsation, which were not medically necessary. 

The allegations resolved by today’s settlement were raised in a lawsuit filed under the qui tam, or whistleblower provisions of the False Claims Act.  The act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery.  The whistleblower, Cheryl Mazurek, will receive more than $648,000 as part of today’s settlement.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

Missouri-based Medco Health Solutions Inc., a wholly owned subsidiary of Express Scripts Holding Company, based agreed to pay the federal government $7.9 million to settle allegations that the company knowingly submitted or caused the submission of false claims to the federal health care program Medicare, the U.S. Department of Justice announced earlier this week.  Medco provides pharmacy benefit management services to clients who receive subsidies under the Medicare Retiree Drug Subsidy program.

The settlement resolves allegations that Medco solicited remuneration from AstraZeneca, a pharmaceutical manufacturer, in exchange for identifying Nexium as the “sole and exclusive” proton pump inhibitor on certain of Medco’s prescription drug lists known as formularies.  The United States alleged that Medco received some or all of the remuneration from AstraZeneca in the form of reduced prices on the following AstraZeneca drugs: Prilosec, Toprol XL and Plendil.  The United States contended that this kickback arrangement between Medco and AstraZeneca violated the Federal Anti-Kickback statute, and thereby caused the submission of false or fraudulent claims for Nexium to the Retiree Drug Subsidy Program.  In January 2015, the United States and AstraZeneca reached a $7.9 million settlement to resolve kickback allegations arising out of the same conduct.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

PharMerica Corporation has agreed to pay $31.5 million to resolve allegations that the company knowingly submitted or caused the submission of false claims to Medicare for improperly dispensed drugs, the U.S. Department of Justice announced yesterday.

PharMerica is a long-term care pharmacy that dispenses medications to residents of long-term care facilities, including nursing homes and skilled nursing facilities.  Many of the prescriptions filled by PharMerica are for controlled substances listed in Schedule II under the Controlled Substances Act.  Schedule II drugs, such as oxycodone and fentanyl, can cause significant harm if used improperly and have a high potential for abuse.

The government’s suit alleged that PharMerica pharmacies operating across the country routinely dispensed Schedule II controlled drugs in non-emergency situations without first obtaining a written prescription from a treating physician.  According to the complaint, PharMerica’s actions violated the Controlled Substances Act by enabling nursing home staff to order narcotics, and pharmacists to dispense them, without confirming that a physician had made a medical judgment as to whether the narcotics were necessary and should be administered to the resident.  Under the settlement, PharMerica has agreed to pay $8 million to resolve these allegations. 

The government’s complaint also alleged that PharMerica violated the False Claims Act by knowingly causing the submission of false claims to Medicare Part D for improperly dispensed Schedule II drugs.  The False Claims Act imposes treble damages and penalties for the knowing submission of false claims for federal funds.  PharMerica has agreed to pay $23.5 million to resolve its alleged False Claims Act violations.

As part of the settlement announced today, the settling defendant has also agreed to enter into a corporate integrity agreement with the U.S. Department of Health and Human Services – Office the Inspector General (HHS-OIG), which obligates PharMerica to undertake substantial internal compliance reforms and to submit federal health care program claims for an independent review for the next five years. 

The False Claims Act claims resolved by today’s settlement were originally brought by Jennifer Denk, a pharmacist formerly employed by PharMerica, under the whistleblower provisions of the act, which authorize private parties to sue on behalf of the United States and to receive a portion of any recovery.  The act permits the United States to intervene and take over the lawsuit, as it did in this case with respect to some of Ms. Denk’s allegations.  Ms. Denk will receive $4.3 million as her share of the settlement.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

Sixteen separate hospitals and their corporate parents have agreed to collectively pay $15.69 million to resolve allegations that they knowingly submitted or caused the submission of false claims to Medicare for services that were not medically reasonable or necessary, the U.S. Department of Justice announced yesterday.

This case concerns claims to Medicare for Intensive Outpatient Psychotherapy (IOP) services.  IOP services represent a continuation of ambulatory psychiatric services and provide active treatment to individuals with mental disorders using a variety of treatment methods.  Medicare will pay for an appropriate course of IOP treatment provided a number of specific requirements are met including, most notably, that the services in question are reasonable and necessary for the diagnosis and treatment of the patient’s condition.

These settlements resolve allegations that the hospitals knowingly submitted claims for IOP services that did not qualify for Medicare reimbursement because: the patient’s condition did not qualify for IOP; the patient’s treatments were not provided pursuant to an individualized treatment plan designed to help the patient address specific mental health needs and reach achievable goals; the patient’s progress was not being adequately tracked or documented; the patient received an inappropriate level of treatment; and/or the therapy provided was primarily recreational or diversional in nature, and not therapeutic.  The IOP services in question were typically performed on the providers’ behalf by Allegiance Health Management (Allegiance), a post-acute healthcare management company based in Shreveport, Louisiana, but billed to Medicare by the providers.

For a list of the providers who have reached agreements with the United States, please see the full press release on the Department of Justice website.

The allegations resolved by today’s settlements arose from a lawsuit filed under the False Claims Act.  The act allows private individuals known as “relators” to sue on behalf of the United States and to share in the proceeds of any settlement or judgment that may result.  The relator in this case will receive $2,667,300. 

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.