qui tam

TeamHealth Holdings Settles False Healthcare Claims for $60M; Whistleblower to Get $11.4M

Submitted by mma on February 22, 2017
February 22, 2017
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TeamHealth Holdings, as successor in interest to IPC Healthcare Inc., f/k/a IPC The Hospitalists Inc. (IPC), has agreed to resolve allegations that IPC violated the False Claims Act by billing Medicare, Medicaid, the Defense Health Agency and the Federal Employees Health Benefits Program for higher and more expensive levels of medical service than were actually performed (a practice known as “up-coding”), the Department of Justice announced earlier this month. Under the settlement agreement, TeamHealth has agreed to pay $60 million, plus interest.

The government contended that IPC knowingly and systematically encouraged false billings by its hospitalists, who are medical professionals whose primary focus is the medical care of hospitalized patients. Specifically, the government alleged that IPC encouraged its hospitalists to bill for a higher level of service than actually provided. IPC’s scheme to improperly maximize billings allegedly included corporate pressure on hospitalists with lower billing levels to “catch up” to their peers.

As part of the settlement, TeamHealth entered into a five-year Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) covering the company’s hospital medicine division. This CIA is designed to increase TeamHealth’s accountability and transparency so that the company will avoid or promptly detect future fraud and abuse.

The settlement resolves allegations filed in a lawsuit by Dr. Bijan Oughatiyan, a physician formerly employed by IPC as a hospitalist. The lawsuit was filed in a federal court in Chicago, Illinois, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The Act also allows the government to intervene and take over the action, as it did in this case. Mr. Oughatiyan will receive approximately $11.4 million.

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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MedStar Ambulance Pays $12.7M for False Medicare Claims; Whistleblower to Get $3.5M

Submitted by mma on February 7, 2017
February 7, 2017
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Medstar Ambulance Inc., including four subsidiary companies and its two owners, Nicholas and Gregory Melehov, have agreed to pay $12.7 million to resolve allegations that the Massachusetts-based ambulance company knowingly submitted false claims to Medicare, the Department of Justice announced last month.

The settlement resolves allegations that Medstar submitted false claims to Medicare for ambulance transport services. Specifically, the United States alleged that Medstar routinely billed for services that did not qualify for reimbursement because the transports were not medically reasonable and necessary, billed for higher levels of services than were required by patients’ conditions, and billed for higher levels of services than were actually provided.

As part of the settlement, Medstar has agreed to a corporate integrity agreement with the U.S. Department of Health and Human Services (HHS).

The allegations were filed in a lawsuit by Dale Meehan, a former employee in Medstar’s billing office, under the whistleblower provisions of the False Claims Act. Those provisions allow private individuals to sue on behalf of the United States and to share in the proceeds of any settlement or judgment. Meehan will receive approximately $3.5 million.

As part of the settlement today, Medstar has agreed to a corporate integrity agreement with the U.S. Department of Health and Human Services (HHS).

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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Shire Pharmaceuticals Settles False Claims for $350M; Whistleblower Awards TBD

Submitted by mma on January 13, 2017
January 13, 2017
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Shire Pharmaceuticals LLC and other subsidiaries of Shire plc (Shire) will pay $350 million to settle federal and state False Claims Act allegations that Shire and the company it acquired in 2011, Advanced BioHealing (ABH), employed kickbacks and other unlawful methods to induce clinics and physicians to use or overuse its product “Dermagraft,” a bioengineered human skin substitute approved by the FDA for the treatment of diabetic foot ulcers, the U.S. Department of Justice announced earlier this week. Shire plc is a multinational pharmaceutical firm headquartered in Ireland, with its United States operational headquarters in Lexington, Massachusetts. Shire sold the assets associated with Dermagraft in early 2014.

The settlement resolves allegations that Dermagraft salespersons unlawfully induced clinics and physicians with lavish dinners, drinks, entertainment and travel; medical equipment and supplies; unwarranted payments for purported speaking engagements and bogus case studies; and cash, credits and rebates, to induce the use of Dermagraft. The Anti-Kickback Statute prohibits, among other things, the payment of remuneration to induce the use of medical devices covered by Medicare, Medicaid and other federally-funded health care programs, including the Department of Veterans Affairs (VA). Claims filed in violation of the Anti-Kickback Statute are considered false or fraudulent under the False Claims Act. In addition, the Anti-Bribery statute and the Federal Acquisition Regulations prohibit bribes to government officials or employees, including VA physicians, to obtain a contract or favorable treatment under a supply contract. The United States alleged that as a result of their violation of these provisions, ABH and Shire submitted or caused to be submitted to federally-funded health care programs hundreds of millions of dollars of false claims for Dermagraft.

In addition to the kickback allegations, the settlement also resolved allegations that Shire and its predecessor ABH unlawfully marketed Dermagraft for uses not approved by the FDA, made false statements to inflate the price of Dermagraft, and caused improper coding, verification, or certification of Dermagraft claims and related services.

The allegations resolved by the settlement were brought in six lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims and to receive a share of any recovery. The whistleblower shares to be awarded in this case have 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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Bechtel and AECOM Settle False Claims for $125M; Whistleblower Award TBD

Submitted by mma on December 20, 2016
December 20, 2016
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Bechtel National Inc., Bechtel Corp., URS Corp. (predecessor in interest to AECOM Global II LLC) and URS Energy and Construction Inc. (now known as AECOM Energy and Construction Inc.) have agreed to pay $125 million to resolve allegations under the False Claims Act that they made false statements and claims to the Department of Energy (DOE) by charging DOE for deficient nuclear quality materials, services, and testing that was provided at the Waste Treatment Plant (WTP) at DOE’s Hanford Site near Richland, Washington, the U.S. Department of Justice announced last month.  The settlement also resolves allegations that Bechtel National Inc. and Bechtel Corp. improperly used federal contract funds to pay for a comprehensive, multi-year lobbying campaign of Congress and other federal officials for continued funding at the WTP. 

DOE has paid billions of dollars to the defendants to design and build the WTP, which will be used to treat dangerous radioactive wastes that are currently stored at DOE’s Hanford Site.  The contract required materials, testing and services to meet certain nuclear quality standards.  The United States alleged that the defendants violated the False Claims Act by charging the government the cost of complying with these standards when they failed to do so.  In particular, the United States alleged that the defendants improperly billed the government for materials and services from vendors that did not meet quality control requirements, for piping and waste vessels that did not meet quality standards and for testing from vendors who did not have compliant quality programs.  The United States also alleged that Bechtel National Inc. and Bechtel Corp. improperly claimed and received government funding for lobbying activities in violation of the Byrd Amendment, and applicable contractual and regulatory requirements, all of which prohibit the use of federal funds for lobbying activities.

The allegations resolved by this settlement were initially brought in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act by Gary Brunson, Donna Busche, and Walter Tamosaitis, who worked on the WTP project.  The False Claims Act permits private parties to sue on behalf of the United States when they believe that a party has submitted false claims for government funds, and to receive a share of any recovery.  The Act also permits the government to intervene in such a lawsuit, as it did in part in this case.  The whistleblowers’ reward 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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Biocompatibles to Pay $36M to Resolve False Claims; Whistleblower to Get $5.1M

Submitted by mma on December 13, 2016
December 13, 2016
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Pennsylvania-based medical device manufacturer Biocompatibles Inc., a subsidiary of BTG plc, pleaded guilty today to misbranding its embolic device LC Bead and will pay more than $36 million to resolve criminal and civil liability arising out of its illegal conduct, the Justice Department announced last month. LC Bead is used to treat liver cancer, among other diseases.

Under the terms of the plea agreement before the U.S. District Court for the District of Columbia, Biocompatibles pleaded guilty to a misdemeanor charge in connection with the company’s misbranding of LC Bead, in violation of the Food, Drug and Cosmetic Act.  LC Bead was cleared by the U.S. Food and Drug Administration (FDA) as an embolization device that can be placed in blood vessels to block or reduce blood flow to certain types of tumors and arteriovenous malformations.  LC Bead has never been cleared or approved by FDA as a drug-device combination product or for use as a drug-delivery device or “drug-eluting” bead.  As part of the criminal resolution, Biocompatibles will pay an $8.75 million criminal fine for the misbranding of LC Bead and a criminal forfeiture of $2.25 million. 

n addition, Biocompatibles will pay $25 million to resolve civil allegations under the False Claims Act that the company caused false claims to be submitted to government healthcare programs for procedures in which LC Bead was loaded with chemotherapy drugs and used as a drug-delivery device.  When LC Bead was combined with prescription drugs for use as a drug-eluting bead, it constituted a new combination drug-device product that was not approved or cleared by the FDA and not covered by Medicare and other federal health care programs.  The federal share of the civil settlement is approximately $23.6 million, and the state Medicaid share of the civil settlement is approximately $1.4 million. 

The civil settlement with Biocompatibles resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery.  The civil lawsuit was filed in the Western District of Texas and is captioned United States ex rel. Ryan Bliss v. Biocompatibles, Inc., et al.  As part of today’s resolution, Bliss will receive approximately $5.1 million from the civil 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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Best Choice Settles False Medicaid Claims for $1.8M; Whistleblower to Get $43K

Submitted by mma on November 29, 2016
November 29, 2016
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Kansas-based Best Choice Home Health Care Agency Inc. (Best Choice) and its owner, Reginald King, have agreed to pay $1.8 million to resolve allegations that Best Choice and King violated the False Claims Act by paying kickbacks for the referral of Medicaid-covered patients for home and community-based healthcare services from Best Choice, the U.S. Department of Justice announced last month.
 
This settlement resolves allegations that Best Choice submitted claims for home and community-based healthcare services to Medicaid that resulted from a kickback arrangement between King, on behalf of Best Choice and Christopher Thomas, who transported patients from their homes to healthcare facilities in Kansas City.  Specifically, under this alleged arrangement, King paid Thomas $58,000 in kickbacks for new patients referred to Best Choice based on a formula which accounted for each hour of service that Best Choice billed to Medicaid. The Medicaid Program is a jointly-funded federal and state program.  Of the $1.8 million that King and Best Choice will pay under the settlement, the United States will receive $1,011,780 and the state of Kansas will receive $788,220.
 
The settlement resolves allegations originally brought under the qui tam, or whistleblower, provisions of the False Claims Act by Thomas, the recipient of the alleged kickbacks.  The act permits private parties to sue on behalf of the United States for false claims for government funds and to receive a share of any recovery.  The whistleblower reward in this case will be $43,178 which represents 10 percent of the federal share of the settlement, minus the amount that the relator received in kickbacks during the duration of the scheme.
 
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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Life Care Centers Settles False Medicare Claims for $145M; Whistleblower to Get $29M

Submitted by mma on November 22, 2016
November 22, 2016
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Tennessee-based Life Care Centers of America Inc. (Life Care) and its owner, Forrest L. Preston, have agreed to pay $145 million to resolve allegations that Life Care violated the False Claims Act by knowingly causing skilled nursing facilities (SNFs) to submit false claims to Medicare and TRICARE for rehabilitation therapy services that were not reasonable, necessary or skilled, the Department of Justice announced last month.

This settlement resolves allegations that Life Care submitted false claims for rehabilitation therapy by engaging in a systematic effort to increase its Medicare and TRICARE billings.  Medicare reimburses skilled nursing facilities at a daily rate that reflects the skilled therapy and nursing needs of their qualifying patients.  The greater the skilled therapy and nursing needs of the patient, the higher the level of Medicare reimbursement.  The highest level of Medicare reimbursement for skilled nursing facilities is for “Ultra High” patients who require a minimum of 720 minutes of skilled therapy from two therapy disciplines (e.g., physical, occupational, speech), one of which has to be provided five days a week.    

The United States alleged in its complaint that Life Care instituted corporate-wide policies and practices designed to place as many beneficiaries in the Ultra High reimbursement level irrespective of the clinical needs of the patients, resulting in the provision of unreasonable and unnecessary therapy to many beneficiaries.  Life Care also sought to keep patients longer than was necessary in order to continue billing for rehabilitation therapy, even after the treating therapists felt that therapy should be discontinued.  Life Care carefully tracked the minutes of therapy provided to each patient and number of days in therapy to ensure that as many patients as possible were at the highest level of reimbursement for the longest possible period.  The settlement also resolves allegations brought in a separate lawsuit by the United States that Forrest L. Preston, as the sole shareholder of Life Care, was unjustly enriched by Life Care’s fraudulent scheme.

As part of this settlement, Life Care has also entered into a five-year chain-wide Corporate Integrity Agreement with the  Department of Health and Human Services Office of Inspector General (HHS-OIG) that requires an independent review organization to annually assess the medical necessity and appropriateness of therapy services billed to Medicare.  

The settlement, which was based on the company’s ability to pay, resolves allegations originally brought in lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act by Tammie Taylor and Glenda Martin, former Life Care employees.  The act permits private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery.  The government may intervene and file its own complaint in such a lawsuit, as it has done in this case.  The whistleblower reward in this case will be $29 million.

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 Settles False Medicare Claimes for $28M; Whistleblower to Get $3M

Submitted by mma on October 26, 2016
October 26, 2016
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Omnicare Inc. has agreed to pay $28.125 million to resolve allegations that it solicited and received kickbacks from pharmaceutical manufacturer Abbott Laboratories in exchange for promoting the prescription drug, Depakote, for nursing home patients, the U.S. Department of Justice announced earlier this month.

Nursing homes rely on consultant pharmacists, such as those employed by Omnicare, to review their residents’ medical charts at least monthly and make recommendations to their physicians about what drugs should be prescribed for those residents.  The settlement resolves allegations that Omnicare solicited and received kickbacks from Abbott in exchange for recommending that physicians prescribe Depakote, an anti-epileptic drug manufactured by Abbott, to elderly nursing home residents.

According to the government’s complaint, Omnicare disguised the kickbacks it received from Abbott in a variety of ways.  Abbott allegedly made payments to Omnicare described as “grants” and “educational funding,” even though their true purpose was to induce Omnicare to recommend Depakote.  For example, Omnicare allegedly solicited substantial contributions from Abbott and other pharmaceutical manufacturers to its “Re*View” program.  Although Omnicare claimed that Re*View was a “health management” and “educational” program, the complaint alleges that it was simply a means by which Omnicare solicited kickbacks from pharmaceutical manufacturers in exchange for increasing the utilization of their drugs on elderly nursing home residents.  In internal documents, Omnicare allegedly referred to Re*View as its “one extra script per patient” program.  The complaint also alleges that Omnicare entered into agreements with Abbott by which Omnicare was entitled to increasing levels of rebates from Abbott based on the number of nursing home residents serviced and the amount of Depakote prescribed per resident.  Finally, the complaint alleges that Abbott funded Omnicare management meetings on Amelia Island, Florida, offered tickets to sporting events to Omnicare management and made other payments to local Omnicare pharmacies.

In May 2012, the United States, numerous states and Abbott entered into a $1.5 billion global civil and criminal resolution that, among other things, resolved Abbott’s liability under the False Claims Act for alleged kickbacks to nursing home pharmacies, including Omnicare and PharMerica Corp.  In October 2015, PharMerica agreed to pay $9.25 million to the United States and numerous states to resolve civil liability under the False Claims Act for the alleged kickbacks from Abbott.  The settlement announced today resolves Omnicare’s role in that alleged kickback scheme.

Approximately $20.3 million of the settlement will go to the United States, while $7.8 million has been allocated to cover Medicaid program claims by states that elect to participate in the settlement.  The Medicaid program is jointly funded by the federal and state governments.

The settlement with Omnicare announced today, together with the prior settlements with Abbott and PharMerica, resolves allegations in two lawsuits filed in federal court in the Western District of Virginia by Richard Spetter and Meredith McCoyd, former Abbott employees.  The lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery.  The act also allows the government to intervene and take over the action, as it did in part in this case in May 2014.  The United States filed a complaint-in-intervention against Omnicare in December 2014.  As part of today’s resolution, McCoyd will receive $3 million from the federal share of the settlement amount.

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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Vibra Healthcare Settles False Medicare Claims for $32.7M; Whistleblower to Get $4M

Submitted by mma on September 30, 2016
September 30, 2016
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Vibra Healthcare LLC (Vibra), a national hospital chain headquartered in Mechanicsburg, Pennsylvania, has agreed to pay $32.7 million, plus interest, to resolve claims that Vibra knowingly submitted or caused the submission of false claims by billing Medicare for medically unnecessary services, the Department of Justice announced earlier his week. 

Vibra operates approximately 36 freestanding long term care hospitals (LTCHs) and inpatient rehabilitation facilities (IRFs) in 18 states.  LTCHs provide inpatient hospital services for patients whose medically complex conditions require long hospital stays and programs of care.  IRFs are intended for patients needing rehabilitative services that require hospital-level care.  The government alleged that Vibra admitted numerous patients to five of its LTCHs and to one of its IRFs who did not demonstrate signs or symptoms that would qualify them for admission.  Moreover, Vibra allegedly extended the stays of its LTCH patients without regard to medical necessity, qualification and/or quality of care.  In some instances, Vibra allegedly ignored the recommendations of its own clinicians, who deemed these patients ready for discharge.

As part of the settlement, Vibra also agreed to enter into a chain-wide corporate integrity agreement with the Inspector General of the U.S. Department of Health and Human Services. 

Part of the allegations resolved by this settlement were originally filed under the qui tam or whistleblower provisions of the False Claims Act by Sylvia Daniel, a former health information coder at Vibra Hospital of Southeastern Michigan.  Daniel filed her suit in the Southern District of Texas, where one of Vibra’s LTCHs was located.  Under the False Claims Act, a private party, known as a relator, can file an action on behalf of the United States and receive a portion of the recovery.  Daniel will receive at least $4 million. 

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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University of Pittsburgh Medical Center Settles False Medicare Claims for $11.5M; Whistleblower Award TBD

Submitted by mma on August 15, 2016
August 15, 2016
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 Atrium Medical Corp. has agreed to pay $11.5 million to settle allegations that the company knowingly submitted or caused the submission of false claims to federal health care program Medicare and also violated the federal Anti-Kickback Statute, Standly Hamilton LLP announced last month.

Atrium allegedly engaged in an extensive nationwide scheme to promote its iCast brand stent for use in the vascular system even though it was federally approved only for treating tracheobronchial obstructions.  According to the lawsuit, Atrium used a system of referral dinners to induce physicians to implant the stents in the arteries of elderly patients while submitting payment claims to Medicare. The lawsuit also alleged Atrium provided financial grants and other kickbacks to doctors in violation of the federal Anti-Kickback Statute.

Atrium sold an estimated $382 million in iCast stents from 2007 to 2012 nearly 100 percent of which are believed to have been implanted for unapproved uses and that more than 70 percent of which were paid for by state and federal health care programs such as Medicare, Medicaid, military hospitals, and the U.S. Department of Veterans Affairs.

The settlement is one of the largest in U.S. history under the federal False Claims Act involving a medical device where the government declined to intervene. 

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.  This lawsuit was filed by Esther Grace Sullivan, a former sales representative and territory business manager for Atrium.  Her share 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.

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