qui tam lawsuit

Pennsylvania-based Shire Pharmaceuticals LLC has agreed to pay $56.5 million to resolve allegations that the company knowingly submitted or caused the submission of false claims to Medicaid, the U.S. Department of Justice announced today.  Shire manufactures and sells pharmaceuticals, including Adderall XR, Vyvanse, and Daytrana, which are approved for the treatment of attention deficit hyperactivity disorder (ADHD), and Pentasa and Lialda, which are approved for the treatment of mild to moderate active ulcerative colitis.

The settlement resolves allegations that Shire promoted Adderall XR for certain uses despite a lack of clinical data to support such claims and overstated the efficacy of Adderall XR, particularly relative to other ADHD drugs.  Among the allegedly unsupported claims was that Adderall XR was clinically superior to other ADHD drugs because it would “normalize” its recipients.  Shire allegedly stated that its competitors’ products could not achieve similar results, which the government contended was not shown in the clinical data that Shire collected.  Shire also allegedly marketed Adderall XR based on unsupported claims that Adderall XR would prevent poor academic performance, loss of employment, criminal behavior, traffic accidents and sexually transmitted disease.  In addition, Shire allegedly promoted Adderall XR for the treatment of conduct disorder without approval from the Food and Drug Administration (FDA).

The settlement further resolves allegations that Shire sales representatives and other agents allegedly made false and misleading statements about the efficacy and “abuseability” of Vyvanse to state Medicaid formulary committees and to individual physicians.  For example, one Shire medical science liaison allegedly told a state formulary board that Vyvanse “provides less abuse liability” than “every other long-acting release mechanism” on the market.  However, the government contended that no study Shire conducted had concluded that Vyvanse was not abuseable, and, as an amphetamine product, the Vyvanse label included an FDA-mandated black box warning for its potential for misuse and abuse.  Shire also made allegedly unsupported claims that treatment with Vyvanse would prevent car accidents, divorce, arrests and unemployment. 

Additionally, the settlement resolves allegations that Shire representatives improperly marketed Daytrana, administered through a patch, as less abuseable than traditional, pill-based medications, and, for part of this period, improperly made phone calls and drafted letters to state Medicaid authorities to assist physicians with the prior authorization process for prescriptions to induce these physicians to prescribe Daytrana and Vyvanse. 

Finally, the settlement resolves allegations that Shire sales representatives promoted Lialda and Pentasa for off-label uses not approved by the FDA and not covered by federal healthcare programs.  Specifically, the government alleged that Shire promoted Lialda off-label for the prevention of colorectal cancer.

As a result of today’s $56.5 million settlement, the federal government will receive $35,713,965, and state Medicaid programs will receive $20,786,034.  The Medicaid program is funded jointly by the federal and state governments.  In addition, Shire has separately reached agreement with the U.S. Department of Health and Human Services-Office of the Inspector General (HHS-OIG) on a corporate integrity agreement, which will address the company’s future marketing efforts.

The lawsuits were originally filed by Dr. Gerardo Torres, a former Shire executive, and Anita Hsieh, Kara Harris, and Ian Clark, former Shire sales representatives, 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. Torres will receive $5.9 million 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.

Maryland-based Episcopal Ministries to the Aging Inc. (EMA) has agreed to pay $1.3 million to the federal government to settle allegations that the nonprofit knowingly submitted or caused the submission of false claims to Medicare for unreasonable or unnecessary rehabilitation therapy provided by one of its subsidiaries, the U.S. Department of Justice announced earlier this week.

EMA allegedly submitted false claims for rehabilitation therapy at William Hill Manor, a skilled nursing facility EMA owns in Easton, Maryland.  EMA hired RehabCare to provide rehabilitation therapy services to its patients at that facility starting in 2010.  The government alleges that EMA failed to prevent RehabCare from providing unreasonable or unnecessary therapy to patients in order to increase Medicare reimbursement to the facilities.  The government contended that among other things the reported therapy did not reflect the lower amounts of therapy generally provided to patients over the course of their stay. 

The settlement further resolves allegations that EMA failed to prevent other RehabCare practices designed to inflate Medicare reimbursement, including: in lieu of using individualized evaluations to determine the level of care most suitable for each patient’s clinical needs, presumptively placing patients in the highest reimbursement level unless it was shown that the patients could not tolerate that amount of therapy; providing the minimum number of minutes of therapy required to bill at the highest reimbursement level while discouraging the provision of therapy in amounts beyond that minimum threshold, despite the Medicare requirement that the amount of care provided be determined by patients’ clinical needs; arbitrarily shifting the number of minutes of planned therapy between therapy disciplines to ensure targeted reimbursement levels were achieved and reporting estimated or rounded minutes instead of reporting the actual minutes of therapy provided. 

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.  Had there been a whistleblower in this case, they would have been eligible to receive up to 30 percent 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.

The United States federal government has elected to intervene in two whistleblower lawsuits that allege Evercare Hospice and Palliative Care, now known as Optum Palliative and Hospice Care, knowingly submitted or caused the submission of false claims to Medicare, the U.S. Department of Justice announced last week.

The Medicare hospice benefit is available for patients who elect palliative care (medical care focused on providing patients with relief from pain, symptoms or stress) for a terminal illness and have a life expectancy of six months or less if their illness runs its normal course.  When a Medicare patient is admitted to hospice, that individual is no longer entitled to Medicare coverage for care designed to cure his or her illness.

The lawsuits allege that defendants violated the False Claims Act by knowingly submitting false claims for hospice benefits for patients who did not have a life expectancy of six months or less.  The complaints include allegations that management pressured employees and physicians to admit and retain patients who were not terminally ill and challenged or disregarded physicians’ decisions that patients should be discharged.  

The lawsuits were originally filed by former Evercare employees under the whistleblower provision of the False Claims Act, which allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  The government may also intervene on its own behalf, 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.

The Washington Metropolitan Area Transit Authority (WMATA) has agreed to pay $4.2 million to settle allegations that it knowingly submitted or caused the submission of false claims in connection with the use of federal funds to impermissibly award a contract, the U.S. Attorney’s Office for the District of Columbia announced last week.

The conduct at issue involves a contract that WMATA awarded to Metaformers, Inc., a Virginia-based business, to integrate the Authority’s financial and business systems.  The total cost of this integration project was approximately $14 million. WMATA funded the project with approximately $9 million in grant funds from the Federal Transit Administration (FTA). 

As a condition of receiving grant funds, WMATA certified that it would comply with statutes, regulations, and FTA rules mandating full and open competition when procuring goods and services using FTA grant funds. Also, as a condition of receiving the funds, WMATA certified that it would not award contracts in a manner that created a conflict of interest – for example, giving an unfair advantage to one bidder or contractor over others.  WMATA allegedly violated both the competition requirement and avoidance of “conflict of interest” rule in awarding the financial management information technology contract.

The lawsuit was originally filed by Shahiq Khwaja, a former WMATA employee, 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.  Khwaja will receive $996,480 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.

Arizona non-profit Carondelet Health Network, doing business as Carondelet St. Mary’s Hospital and Carondelet St. Joseph’s Hospital in Tucson, Ariz., has agreed to pay the United States $35 million to settle allegations that the hospitals knowingly submitted or caused the submission of false claims to Medicare and other federal health care programs, the U.S. Attorney’s Office for the District of Arizona announced yesterday.

The settlement agreement resolves allegations that Carondelet St. Mary’s Hospital and Carondelet St. Joseph’s Hospital billed Medicare, the Federal Employees Health Benefit Program, and the Arizona Health Care Cost Containment System (Arizona’s Medicaid agency) for inpatient rehabilitation facility services that were not properly reimbursable under applicable coverage criteria because the patients were not appropriate for inpatient rehabilitation facility services.  The United States alleged that as a result of these false claims, federal health care programs paid substantially more than was warranted.

Shortly before becoming aware of the United States’ investigation, Carondelet disclosed to the government some inpatient rehabilitation overpayments and tendered a substantial repayment.  However, based on its investigation, the United States had concerns about the nature of Carondelet’s disclosure, including concerns that the disclosure and the repayment Carondelet tendered were not timely, complete, or adequate.  Despite these concerns, the United States considered Carondelet’s efforts in this regard as one of several factors in reaching the settlement amount and the resolution of the case.  The settlement is neither an admission of liability by the hospitals, nor is it a concession by the United States that its claims are not well founded.

The lawsuit was originally filed by Jacqueline Bloink under the whistleblower provision of the False Claims Act, which allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Bloink’s portion of the settlement has yet to be 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.