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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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Dongwon Sued Under False Claims Act for Falsely Obtained Fishing Licenses

Submitted by kludowitz on February 10, 2014
February 10, 2014
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A lawsuit against StarKist’s parent company, Dongwon Industries (Dongwon), has been filed under the False Claims Act for making false statements to secure vessel certification and fishing licenses, Undercurrent News announced last week.

Allegedly, Dongwon knowingly submitted false information to obtain documentation allowing two Korean owned companies, Majestic Blue and Pacific Breeze, to receive tuna fishing licenses under the South Pacific Tuna Treaty (SPTT). These licenses are reserved only for vessels registered in the United States and are paid for using U.S. taxpayer dollars.

Jaewoong Kim, former executive of Dongwon, is reported to have registered his two daughters as the managers, in name only, of Majestic Blue and Pacific Breeze. By registering his daughters, whom hold U.S. citizenship, Majestic Blue and Pacific Breeze were able to receive the U.S. licenses needed to fish the profitable zones of the South Pacific. Dongwon is further alleged to have created a false identity under the American-sounding alias “William Phil”, as a fictitious manager when dealing with U.S. officials.

It is also alleged that Dongwon failed to report oil discharge and sea dumping in an attempt to avoid penalties for violating the Act to Prevent Pollution from Ships.

The lawsuit was filed by a private whistleblower 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.  The whistleblower may receive anywhere from 15 to 30 percent 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.

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JPMorgan to Settle False Claims for $614M

Submitted by kludowitz on February 5, 2014
February 5, 2014
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JPMorgan Chase (JPMC) will pay $614 million for violating the False Claims Act by knowingly originating and underwriting non-compliant mortgage loans submitted for insurance coverage and guarantees, the Department of Justice announced yesterday.

JPMC admitted that, for more than a decade, it approved thousands of Federal Housing Administration (FHA) loans and hundreds of Veterans Affairs (VA) loans that were not eligible for FHA or VA insurance because they did not meet applicable agency underwriting requirements. JPMC further admitted that it failed to inform the FHA and the VA when its own internal reviews discovered more than 500 defective loans that never should have been submitted for FHA and VA insurance. 

JPMC also falsely certified that loans it originated and underwrote were qualified for FHA and VA insurance and guarantees. As a consequence of JPMC’s misrepresentations, both the FHA and the VA incurred substantial losses when unqualified loans failed and caused the FHA and VA to cover the associated losses.

The lawsuit was originally filed by a Keith Edwards 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. Edwards’ 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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Prime Healthcare Sued Under False Claims Act

Submitted by kludowitz on January 31, 2014
January 31, 2014
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Prime Healthcare Services Inc. (PHS) is being sued by an employee whistleblower, Karin Berntsen, for allegations under the False Claims Act that they knowingly falsified patients’ admission information, Law360 announced earlier this month.

PHS allegedly directed hospital staff to falsify patients’ diagnoses in order to charge the highest amount to Medicare and Medicaid. PHS also refused to release patients to post-acute care centers so they could further their profits. It is further alleged that PHS bought failing hospitals and enhanced their revenue by having those hospitals engage in similar fraudulent practices. PHS allegedly cost Medicare and Medicaid around $50 million in reimbursements.

The lawsuit was originally filed by Karin Berntsen, a former PHS 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. The government has elected not to intervene in this case, and Berntsen could receive up to 30 percent of the settlement, if there is one.

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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St. Joseph to Settle False Medicare Claims for $16.5M; Whistleblowers to Receive $2.5M

Submitted by kludowitz on January 29, 2014
January 29, 2014
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Saint Joseph Health System, Inc. has agreed to pay the U.S. Government $16.5 million to resolve allegations under the False Claims Act that they submitted false or fraudulent claims to the Medicare and Kentucky Medicaid programs for a variety of medically unnecessary heart procedures, the Justice Department announced today.

Several doctors working at the Saint Joseph London Hospital allegedly performed numerous invasive cardiac procedures on Medicare and Medicaid patients who did not need them. The hospital then billed the federal programs for these unnecessary procedures, which include coronary stents, pacemakers, coronary artery bypass graft surgeries (“CABGS”), and diagnostic catheterizations. Medicare and Medicaid programs only reimburse health care providers for operations that are deemed medically necessary. Hospitals generally receive between $10,000 and $15,000 for medical procedures such as heart stents.

The settlement also resolves allegations that Saint Joseph violated the federal Stark Law and Anti-Kickback Statute by entering into management agreements with doctors at the Cumberland Clinic. These agreements served as an inducement for the doctors to refer patients to Saint Joseph. The government contends that Medicare and Medicaid are not responsible for claims that resulted from this improper financial relationship between the doctors and the hospital.

Saint Joseph has also agreed to enter into a Corporate Integrity Agreement with the Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), which obligates the hospital to undertake substantial internal compliance reforms and commit to a third-party review of its claims to federal health care programs for the next five years.

The lawsuit was originally filed by Doctors Michael Jones, Paula Hollingsworth, and Michael Rukavina, three Lexington cardiologists, 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 three whistleblowers will receive $2,458,810 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 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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