False Claims Act

The Ensign Group Inc. (Ensign) has agreed to pay $48 million to resolve allegations, under the False Claims Act, that it knowingly submitted or caused the submission of false claims to Medicare for medically unnecessary rehabilitation therapy services, the Justice Department announced today. 

Ensign, a skilled nursing provider, allegedly submitted false claims to the government for physical, occupational and speech therapy services provided to Medicare beneficiaries that were not medically necessary. The investigation alleged that Ensign provided therapy to patients whose conditions and diagnoses did not warrant it, solely to increase its reimbursement from Medicare.  The government further alleged that Ensign created a corporate culture that improperly incentivized therapists and others to increase the amount of therapy provided to patients to meet planned targets for Medicare revenue.  These targets were set without regard to patients’ individual therapy needs and could only be achieved by billing at the highest reimbursement levels.  The government also alleged that Ensign billed for inflated amounts of therapy it had not provided and that certain patients were kept in these facilities for periods of time exceeding what was medically necessary for treatment of their conditions. 

In addition to the settlement amount, Ensign also agreed that each of its skilled nursing facilities across the nation would be bound by the terms of a Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG).

The lawsuit was originally filed by Gloria Patterson and Carol Sanchez, two former Ensign therapists, 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 amount that the whistleblowers will receive has not 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 uncover fraud of every kind perpetrated against our 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.

CA, Inc. (CA) has agreed to pay the United States $8 million to settle allegations that it violated the False Claims Act in connection with contracts administered by the General Services Administration (GSA) and the Department of Defense (DOD), the U.S. Attorney’s Office announced earlier this week.

The U.S. government, which purchased software maintenance services from CA, alleged that CA knowingly double-billed federal agencies by charging for periods of software maintenance for which the agencies had already paid.  Specifically, when federal customers entered into software maintenance renewal agreements with CA, the company began the renewal periods on the day CA processed the order, rather than the day after the expiration of the customer’s then-existing maintenance period. 

The government also claimed that CA prevented DOD from taking advantage of pre-paid software inventory and discounts available under several contracts known as Blanket Purchase Agreements (BPAs). CA allegedly steered DOD away from BPA purchases and toward purchases under more costly contracts, with the result that the government paid more than it should have for certain software.

The lawsuit was originally filed by Ann-Marie Shaw, a former CA 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. Shaw’s 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 uncover fraud of every kind perpetrated against our 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.

LG Chem Michigan, Inc. (LGCMI) will pay the United States $1.2 million to resolve allegations, under the False Claims Act, that the company improperly sought and obtained federal funds to pay employees who were engaged in recreational and volunteer activities, the U.S. Attorney’s Office announced last week. This amount is in addition to the $8,500 that LGCMI refunded to the U.S. Department of Energy (DOE) based on the same allegations.

DOE awarded LGCMI over $150 million in funds under the American Recovery and Reinvestment Act to construct and operate a lithium-ion battery manufacturing plant. The United States alleged that before LGCMI transitioned battery production from foreign sources to their plant, LGCMI submitted claims to obtain the federal share of wages and benefits paid to domestic workers who were engaged in non-work activities such as watching movies, playing games and performing volunteer work. The United States further alleged that in response to governmental inquiries about those activities LGCMI failed to fully disclose the number of employees involved in those activities, the nature and scope of those activities, and the resulting losses to the government.

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.

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 uncover fraud of every kind perpetrated against our 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.

Johnson & Johnson (J&J) will pay more than $2.2 billion to resolve criminal and civil liability allegations relating to the prescription drugs Risperdal, Invega and Natrecor, including promotion for uses not approved as safe and effective by the Food and Drug Administration (FDA) and, payment of kickbacks to physicians and to pharmacy providers, the U.S. Department of Justice announced earlier this week.  The global resolution is one of the largest health care fraud settlements in U.S. history, including criminal fines and forfeiture totaling $485 million and civil settlements for False Claims Act violations totaling $1.72 billion.

The government alleged that Janssen Pharmaceuticals Inc., a J&J subsidiary, introduced the antipsychotic drug Risperdal, which was approved by the FDA only to treat schizophrenia, into interstate commerce for an unapproved uses. Janssen’s sales representatives allegedly promoted Risperdal to physicians and other prescribers who treated elderly dementia patients by urging the prescribers to use Risperdal to treat symptoms such as anxiety, agitation, depression, hostility and confusion. 

Janssen also allegedly created written sales aids for use by their ElderCare sales force that emphasized symptoms and minimized any mention of the FDA-approved use, treatment of schizophrenia.  The company also provided incentives for off-label promotion and intended use by basing sales representatives’ bonuses on total sales of Risperdal in their sales areas, not just sales for FDA-approved uses. The settlement also resolves allegations that, in furtherance of their efforts to target elderly dementia patients in nursing homes, J&J and Janssen paid kickbacks to Omnicare Inc., the nation’s largest pharmacy specializing in dispensing drugs to nursing home patients. 

The government alleged that J&J and Janssen caused false claims to be submitted to federal health care programs by promoting Risperdal for off-label uses that federal health care programs did not cover, making false and misleading statements about the safety and efficacy of Risperdal and paying kickbacks to physicians to prescribe Risperdal.

In addition to imposing substantial monetary sanctions, the resolution will subject J&J to stringent requirements under a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG).  This agreement is designed to increase accountability and transparency and prevent future fraud and abuse.

The lawsuit was originally filed by former employees across multiple states 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.  Whistleblowers in the Eastern District of Pennsylvania will receive $112 million while whistleblowers in the Districts of Massachusetts and the Northern District of California will receive $28 million as their 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 uncover fraud of every kind perpetrated against our 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.

Infosys Corporation has agreed to pay $34 million to settle allegations of systematic visa fraud and abuse of immigration processes, the U.S. Attorney’s Office announced earlier this week.  The $34 million payment made by Infosys, an Indian company involved in consulting, technology, and outsourcing, represents the largest payment ever levied in an immigration case.

Infosys brings foreign nationals into the United States in order to perform work and fulfill contracts with its customers under two visa classification programs, H-1B and B-1. The government alleged that Infosys knowingly circumvented the requirements, limitations and governmental oversight of the H-1B visa program by unlawfully using B-1 visa holders to perform skilled labor that would otherwise be performed by United States citizens or require legitimate H-1B visa holders.  The government also alleged that Infosys did so in order to increase profits, minimize costs of securing visas, increase flexibility of employee movement, obtain an unfair advantage over competitors and avoid tax liabilities.

The settlement agreement also requires additional auditing for I-9 forms; a reporting requirement for B-1 usage; an agreement to continue to use only detailed invitation letters and the continued use of corporate disciplinary processes for employees that violate the immigration laws of the United States.

The lawsuit was originally filed by Jack Palmer, a former Infosys employee in America, 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.  Palmer’s case was dismissed last year by a federal judge but spurred federal investigation, and he could receive $5 million to $8 million as his share of this 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 uncover fraud of every kind perpetrated against our 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.