Prop 65 Warning

The owners of Global Medical Direct, LLC and Global Medical Inc., have agreed to pay $7 million to resolve allegations against them in connection with a scheme to submit false claims to the federal Medicare and Tricare healthcare programs, the United States Attorney’s Office announced yesterday. Global Medical, Inc. and its parent company, Global Medical Direct, LLC, are mail-order diabetic supply companies. 

The United States alleged that owners Robert Shea and Mark Franz caused Global Medical and Global Medical Direct to enter into numerous marketing contracts with insurance brokerage and other companies with customer bases likely to have a high percentage of diabetes patients and paid these companies based on the number of patients referred for diabetic supplies.  The Anti-Kickback Statute makes it unlawful to pay or receive remuneration for patient referrals because of the high potential for billing abuse to federal programs, such as Medicare, resulting from these types of arrangements. 

The companies have agreed to pay to the United States $5 million in proceeds from the sale of all of the companies’ assets to settle civil allegations under the False Claims Act.  Owners Shea and Franz will also receive twenty-year exclusions from participation in any federal healthcare program as part of the settlement. 

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.

Kmart Corporation has agreed to pay the United States and 32 participating states a total of $2.5 million to settle allegations of false prescription claims by its national pharmacy centers to government health insurance programs, the Federal Bureau of Investigation announced yesterday.

Kmart allegedly violated the False Claims Act by billing government health care programs (Medicaid, Tricare and the Federal Employee Health Benefits Program) for all drugs included in a prescription when, for many prescriptions, it dispensed only a portion of the prescribed drugs. Although billed in full to the government health care programs, the remaining portion of the prescriptions were never dispensed to beneficiaries and were later returned to stock. 

The lawsuit was originally filed by Mark Kirsch, a former Kmart 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.  Kirsch will receive $309,687 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 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.