False Claims Act

Shipping Co.’s Settle False Claims for $3.4M ; Whistleblower to Get $512K

Submitted by mma on March 7, 2014
March 7, 2014
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Sea Star Line LLC and Horizon Lines LLC have agreed to pay $3.4 million to resolve allegations that the companies knowingly submitted or caused the submission of false claims to the federal government by fixing the prices of government cargo transportation contracts between the United States and Puerto Rico, the U.S. Department of Justice announced today.  Sea Star Line will pay $1.9 million, while Horizon Lines will pay $1.5 million.

The government alleged that former executives of the defendant ocean shippers used personal email accounts to communicate confidential bidding information, thereby enabling each of the shippers to know the transportation rates that its competitor intended to submit to federal agencies for specific routes.   This information allowed the shippers to allocate specific routes between themselves at predetermined rates.  Among the contracts affected were U.S. Postal Service contracts to transport mail and Department of Agriculture contracts to ship food.   Both Sea Star Line and Horizon Lines previously pleaded guilty, in related criminal proceedings, to anticompetitive conduct in violation of the Sherman Act.

The lawsuit was originally filed by William B. Stallings, a former Sea Star Line executive, under the whistleblower provision of the False Claims Act.  The False Claims Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Stallings will receive $512,719 as his portion 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.

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SelfRefind to Settle False Medicare Claims for $15.8M

Submitted by mma on March 6, 2014
March 6, 2014
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SelfRefind and PremierTox LLC have agreed to pay $15.75 million to resolve allegations that they violated the False Claims Act by submitting claims to Medicare and Kentucky’s Medicaid program for tests that were medically unnecessary, more expensive than those performed, or billed in violation of the Stark Law, the Department of Justice announced. 

Drs. Bryan Wood and Robin Peavler, owners of SelfRefind, each purchased a 20 percent ownership stake in PremierTox LLC, a new clinical laboratory created to perform urine drug testing. Allegedly, after Wood and Peavler became owners of PremierTox, SelfRefind began referring comprehensive urine drug screening tests to PremierTox that were unnecessary and more expensive than other suitable alternative tests. The government also alleged that PremierTox knowingly submitted inflated claims to Medicare and Medicaid that misidentified the class of drug being tested and billed for tests that were referred by SelfRefind in violation of the Stark law.  The Stark Law forbids a laboratory from billing Medicare and Medicaid for certain services referred by physicians that have a financial relationship with the laboratory. 

The lawsuit was filed under the whistleblower provisions of the False Claims Act. Under the False Claims Act, private parties with knowledge of fraud against the government may sue on behalf of the government and share in the recovery. Had there been a whistleblower in this case, their portion of the settlement may have been anywhere from 15 to 30 percent. Of the total $15.75 million settlement amount, the federal share is $13.01 million, and the remaining $2.74 million will be paid to the Commonwealth of Kentucky.

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.

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Omnicare to Settle False Kickback Claims for $4.19M; Whistleblower to Get $398K

Submitted by mma on February 28, 2014
February 28, 2014
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Ohio-based Omnicare Inc. has agreed to pay the federal government $4.19 million to resolve allegations that the company engaged in a kickback scheme in violation of the False Claims Act, the U.S. Department of Justice announced yesterday.  Omnicare provides pharmaceuticals and services to long-term care facilities and residents and other senior populations.

The settlement resolves allegations that Omnicare solicited and received kickbacks from the drug manufacturer Amgen Inc. in return for implementing “therapeutic interchange” programs that were designed to switch Medicaid beneficiaries from a competitor drug to Amgen’s product Aranesp.  The government alleged that the kickbacks took the form of performance-based rebates that were tied to market-share or volume thresholds, as well as grants, speaker fees, consulting services, data fees, dinners and travel. 

The lawsuit was originally filed by an unnamed whistleblower under the whistleblower provision of the False Claims Act.  The Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  The whistleblower in this case will receive $397,925 as his portion 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.

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DIG to Settle False Health Care Claims for $15.5M; Whistleblowers to Get $2.3M

Submitted by mma on February 26, 2014
February 26, 2014
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Diagnostic Imaging Group (DIG) has agreed to pay $15.5 million to settle allegations that the company knowingly submitted or caused the submission of false claims to state and federal health care programs in connection with medical tests that were not performed or were medically unnecessary, the U.S. Department of Justice announced yesterday.

The settlement resolves allegations that DIG submitted claims to Medicare, as well as the New Jersey and New York Medicaid Programs, for 3D reconstructions of CT scans that were never performed or interpreted.  Additionally, DIG allegedly bundled certain tests on its order forms so that physicians could not order other tests without ordering the additional bundled tests, which were not medically necessary.  The settlement also resolves allegations that DIG paid kickbacks to physicians for the referral of diagnostic tests.  According to the government, the kickbacks were in the form of payments that DIG made to physicians ostensibly to supervise patients who underwent nuclear stress testing.  These payments allegedly exceeded fair market value and were, in fact, intended to reward physicians for their referrals.     

DIG operates a chain of diagnostic testing facilities through its subsidiary, Doshi Diagnostic Imaging Services, which is headquartered in Hicksville, N.Y.  DIG previously operated chains in New Jersey and Florida through subsidiaries Doshi Diagnostic Imaging Services of New Jersey and Signet Diagnostic Imaging Services. 

The settlement resolves three lawsuits originally filed under the whistleblower provision of the False Claims Act.  The False Claims Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  The three whistleblowers—Dr. Mark Novick, Rey Solano, and Dr. Richard Steinman—will receive $1.5 million, $1.07 million, and $209,250, respectively, as their portions 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.

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Endo to Settle False Health Care Claims for $172M

Submitted by mma on February 25, 2014
February 25, 2014
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Delaware-based Endo Health Solutions Inc. and its subsidiary Endo Pharmaceuticals Inc. (Endo) have agreed to pay $171.9 million to settle allegations that the company improperly marketed the prescription drug Lidoderm for uses not approved by the Food and Drug Administration (FDA), resulting in false claims submitted to federal health care programs such as Medicaid, the Department of Justice announced last week.  Endo will pay an additional $20.8 million in penalties and forfeiture of profits, bringing the total payment to $192.7 million.

The government charged that Endo Pharmaceuticals Inc. introduced into interstate commerce Lidoderm that was misbranded under the Federal Food, Drug and Cosmetic Act (FDCA).   The FDCA requires a company, such as Endo Pharmaceuticals Inc., to specify the intended uses of a product in its new drug application to the FDA.   Once approved, a drug may not be introduced into interstate commerce for unapproved or “off-label” uses until the company receives FDA approval for the new intended uses.   During the period of 2002 to 2006, Lidoderm was approved by the FDA only for the relief of pain associated with post-herpetic neuralgia (PHN), a complication of shingles.   The information alleges that, during the relevant time period, the Lidoderm distributed nationwide by Endo Pharmaceuticals Inc. was misbranded because its labeling lacked adequate directions for use in the treatment of non-PHN related pain, including lower back pain, diabetic neuropathy and carpal tunnel syndrome.   These uses were intended by Endo Pharmaceuticals Inc. but never approved by the FDA.   The information further alleges that certain Endo Pharmaceuticals Inc. sales managers provided instruction to certain sales representatives concerning how to expand sales conversations with doctors beyond PHN and encouraged promotion of Lidoderm in workers’ compensation clinics.

In a deferred prosecution agreement to resolve the charge, Endo Pharmaceuticals Inc. admitted that it intended that Lidoderm be used for unapproved indications and that it promoted Lidoderm to health care providers for those unapproved indications.   Under the terms of the deferred prosecution agreement, Endo Pharmaceuticals Inc. will pay a total of $20.8 million in monetary penalties and forfeiture.   Endo Pharmaceuticals Inc. further agreed to implement and maintain a number of enhanced compliance measures, including making publicly available the results of certain clinical trials and requiring an annual review and certification of its compliance efforts by the Chief Executive Officer of its parent company, Endo Health Solutions. 

In addition, Endo agreed to settle its potential civil liability in connection with its marketing of Lidoderm.   The government alleged that Endo caused false claims to be submitted to federal health care programs, including Medicaid, a jointly funded federal and state program, by promoting Lidoderm for unapproved uses that were therefore covered by the federal health care programs.   Of the $171.9 million Endo has agreed to pay to resolve these civil claims, Endo will pay $137.7 million to the federal government and $34.2 million to the states and the District of Columbia.  

Also as part of the settlement, Endo Pharmaceuticals Inc. has agreed to enter into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General that requires Endo to implement measures designed to avoid or promptly detect conduct similar to that which gave rise to this resolution.   Among other things, the CIA requires Endo to implement an internal risk assessment and mitigation program and requires numerous internal and external reviews of promotional and other practices.   The CIA also requires key executives and individual board members to sign certifications about compliance, and it requires the company to publicly report information about its financial arrangements with physicians.

The settlement resolves three lawsuits originally filed by two former Lidoderm sales representatives and one physician under the whistleblower provision of the False Claims Act.  The False Claims Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  The whistleblowers’ share of the settlement has not yet been determined.

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.

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Govt Intervenes in Lawsuit Against Tenet Healthcare

Submitted by mma on February 21, 2014
February 21, 2014
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The U.S. government has intervened in a False Claims Act Lawsuit against Tenet Healthcare Corp. and four of its hospitals in Georgia and South Carolina, as well as another hospital in Georgia that is owned by Health Management Associates (HMA), the Department of Justice announced earlier this week.  Tenet and HMA are two of the largest owner/operators of hospitals in the United States.  The government also is intervening against the clinics and related entities known as Hispanic Medical Management d/b/a Clinica de la Mama. 

The hospitals allegedly paid kickbacks to obstetric clinics serving primarily undocumented Hispanic women in return for referral of those patients for labor and delivery at the hospitals.  The hospitals then billed the Medicaid programs in Georgia and South Carolina for the services provided to the referred patients and, in some instances, also obtained additional Medicare reimbursement based on the influx of low-income patients. 

The lawsuit alleges that four Tenet hospitals, Atlanta Medical Center, North Fulton Regional Hospital, Spalding Regional Hospital and Hilton Head Hospital in South Carolina, and one HMA facility, Walton Regional Medical Center (since renamed Clearview Regional Medical Center), paid kickbacks to Hispanic Medical Management d/b/a Clinica de la Mama (Clinica) and related entities in return for Clinica’s agreement to send pregnant women to their facilities for deliveries paid for by Medicaid, in violation of the federal Medicare and Medicaid Anti-Kickback Statute.  The kickbacks were disguised as payments for a variety of services allegedly provided by Clinica.

The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally funded programs.  The Anti-Kickback Statute is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and is instead based on the best interests of the patient. 

The lawsuit was originally filed by an unnamed whistleblower under the whistleblower provision of the False Claims Act.  The False Claims Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  The False Claims Act also allows the government to intervene in the lawsuit, which it has elected to do in this case.

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.

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EndoGastric Settles False Claims For $5.25M; Whistleblower to Get $945K

Submitted by mma on February 20, 2014
February 20, 2014
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Washington-based EndoGastric Solutions has agreed to pay the U.S. government up to $5.25 million to resolve allegations that the company violated the False Claims Act and the Anti-Kickback Statute by misleading health care providers in how to bill federal health care programs and paying kickbacks to certain physicians, the Department of Justice announced yesterday.

EndoGastric Solutions manufactures and sells a device called EsophyX that is intended to treat gastroesophageal reflux disease, developed as an alternative to a more invasive procedure that requires incisions in the abdomen.   The government alleged that EndoGastric Solutions knowingly caused health care providers to bill for the less invasive EsophyX procedure using codes applicable to the more invasive procedure, which provided for a higher level of reimbursement.   As a result, federal health care programs allegedly paid more than they should have for the procedures using EsophyX.

The government also alleged that EndoGastric Solutions knowingly paid illegal remuneration to certain physicians for participating in patient seminars and co-marketing agreements to induce them to use EsophyX, in violation of the Federal Anti-Kickback Statute.  The Anti-Kickback Statute prohibits offering or paying remuneration to induce referrals of items or services covered by federally funded health care programs. 

EndoGastric Solutions has also agreed to enter into a Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General.   The agreement provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to the settlement.

The lawsuit was originally filed by Glenn Schmasow, a former EndoGastric employee, under the whistleblower provision of the False Claims Act.  The False Claims Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Schmasow will receive up to $945,000 as his portion 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.

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Vector to Settle False Billing Claims for $6.5M; Whistleblower to Receive $1.3M

Submitted by kludowitz on February 18, 2014
February 18, 2014
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Vector Planning and Service Inc. (VPSI) has agreed to pay the government $6.5 million to settle False Claim Act allegations that the company inflated claims for payments under several Navy contracts, the Justice Department announced today.

VPSI, an information technology and systems engineering firm, has a number of contracts with the U.S. Navy to provide information technology, systems engineering, and management consulting services. Under these contracts, VPSI is entitled to bill the government for indirect costs, such as overhead expenses that cannot be allocated directly to a particular contract. VPSI allegedly inflated its indirect cost billings to the government by improperly including direct costs, for which it had already been paid, in indirect cost accounts that were then allocated across its government contracts, and billed again. The government further alleged that VPSI submitted claims for other costs that were never incurred.

The lawsuit was originally filed by an unnamed whistleblower under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery. The whistleblower will receive $1.28 million as his or her portion of the settlement.

This case was prosecuted by the Hirst Law Group.

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.

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MPRI to Settle False Labor Claims for $3.2M; Whistleblower to Receive $576K

Submitted by kludowitz on February 14, 2014
February 14, 2014
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MPRI Inc. has agreed to pay $3.2 million to resolve allegations under the False Claims Act that it submitted false labor charges on a contract to support the Army in Afghanistan, the Justice Department announced earlier this week.

MPRI allegedly billed for employees who had been granted leave and were out of the country and were thus not working.  Under its contract with the Army, MPRI was required to provide support to the Army in its efforts to re-design and build from a new Afghan Defense Sector that would establish an Afghan national security system.  Among other things, MPRI was required to provide support for program and financial management, development/implementation of core systems for the Afghan Ministry of Defense, General Staff, and intermediate Commands. MPRI was also responsible for sustaining institutions, training in logistics, acquisitions, installation management, and intelligence. 

The lawsuit was originally filed by Byron Scott Lankford, a former employee for MPRI in Afghanistan, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery. Lankford will receive $576,000 as his portion 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.

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Sanborn to Settle False Contract Claims for $2.1M

Submitted by kludowitz on February 12, 2014
February 12, 2014
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Sanborn Map Company Inc. (Sanborn) has agreed to pay $2.1 million to the U.S. government to resolve allegations under the False Claims Act that it submitted false claims in connection with U. S. Army Corps of Engineers contracts, the Justice Department announced earlier this week.

The U.S. Army Corp of Engineers contracted Sanborn to produce maps for U.S. convoy routes in Iraq, Marine Corps bases in the U. S., and other military and civilian projects. Allegedly, Sanborn used unapproved foreign subcontractors on three projects, which violated contractual obligations and caused delays for these projects. Sanborn also allegedly used unapproved domestic subcontractors when Sanborn was required to complete all map work in-house and charged unrelated work to the government contracts. 

The lawsuit was originally filed by James Peterson, a former Sanborn employee, under the whistleblower provisions of the False Claims Act. The False Claims Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery. Peterson’s portion of the settlement has not yet been determined.

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.

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