Adventist Health Systems To Pay Out $118.7 Million

Three former employees of a North Carolina hospital were the first to expose an alleged scheme by Adventist Health System to pay doctors excessive compensation to lock in their patient referrals to Adventist-owned hospitals, clinics and other outpatient services in Florida, North Carolina, Tennessee and Texas.

The US Justice Department announced today that Adventist will pay a total of $118.7 million to the federal government and four states to settle a whistleblower (qui tam) lawsuit filed in December 2012 by those former employees. The settlement agreement also covers a separate qui tam lawsuit filed in 2013 that made the same allegations as some of those made earlier in Phillips & Cohen's qui tam lawsuit.

The Adventist settlement is the largest healthcare fraud settlement ever made involving physician referrals to hospitals. It is nearly twice the previous largest settlement involving hospital kickback allegations, which was North Broward Hospital District's recent $69.5 million settlement.

It was alleged Adventist's hospitals paid doctors outrageous sums and offered overly generous benefits and lax billing oversight as part of a corporate strategy to capture and control physician referrals for inpatient and outpatient services near its hospitals. Federal law prohibits hospitals from paying doctors directly or indirectly for referrals so that doctors make recommendations for care based on what's best for the patient – not what's best for the doctor's bank account.

A substantial portion of the settlement amount is based on allegations involving Florida Hospital Medical Group, an Adventist-owned physician practice in Florida whose doctors worked at several Adventist hospitals and dozens of Adventist-owned outpatient clinics. Those hospitals include Florida Hospital Altamonte, Florida Hospital Apopka, Florida Hospital Celebration Health, Florida Hospital Kissimmee, Florida Hospital Orlando, Florida Hospital Waterman (Tavares, Fla.), Florida Hospital for Children (Orlando, Fla.) and Winter Park Memorial Hospital.

The three whistleblowers were longtime employees at Adventist's Park Ridge Health in Hendersonville, NC, where they became aware of the alleged system-wide kickback scheme. Michael Payne was a risk manager and Melissa Church was the executive director of physician services at Park Ridge. Gloria Pryor was a compliance officer for physician offices at Park Ridge.

Kmart Guilty of False Claims Act Violation

KMART Corp. (Kmart), a discount department store chain that operates approximately 780 in-store pharmacies, has paid the United States $1.4 million to resolve allegations that it violated the False Claims Act by using drug manufacturer coupons and gasoline discounts as improper Medicare beneficiary inducements, the Justice Department announced today. 

 

The settlement resolves allegations that Kmart violated the False Claims Act by providing illegal benefits to beneficiaries of the Medicare program.  The government alleged that from June 2011 to June 2014, Kmart knowingly and improperly influenced the decisions of Medicare beneficiaries to bring their prescriptions to Kmart pharmacies by permitting the Medicare beneficiaries to use drug manufacturer coupons to reduce or eliminate prescription co-pays that they otherwise would be obligated to pay.  Federal law prohibits a person from offering beneficiaries of certain federal health programs, such as Medicare, remuneration that is intended to influence the beneficiary’s choice of provider.  The government alleged that Kmart’s conduct caused the Medicare beneficiaries to seek expensive, brand name drugs in lieu of cheaper generic drugs, which caused the government’s costs to increase without any medical benefit to the beneficiary.  The government also alleged that Kmart improperly encouraged Medicare beneficiaries to bring their prescriptions to Kmart pharmacies by offering them varying levels of discounts on the purchase of gasoline at participating gas stations based on the number of prescriptions that they filled at Kmart pharmacies.

 

The settlement resolves allegations in a lawsuit filed by Joshua Leighr, a former Kmart pharmacist, under the qui tam, or whistleblower provisions of the False Claims Act.  The act authorizes private parties, such as Mr. Leighr, to sue for fraud on behalf of the United States and to share in any recovery.  Mr. Leighr will receive approximately $248,500 of the settlement.   

 

Update on Trinity Industries

A Texas federal judge tripled a $175 million False Claims Act verdict against Trinity Industries Inc. on June 9 and assessed more than $138 million in penalties. This comes after a jury verdict in October finding that the company defrauded the U.S. government by selling it defective guardrails. U.S. District Judge Rodney Gilstrap entered final judgment of $663.4 million against Trinity, including a $199 million to whistleblower Joshua Harman. Since the U.S. did not participate in the trial and left the defense solely to the whistleblower, he was awarded the 30 percent commission along with more than $16 million in attorneys’ fees, $2.3 million in expenses and $177,830 in taxable costs, for a total award of $218 million. The government was awarded $464.4 million.

We’ve been perplexed by the government’s position from day one in this case. We pursued this case without any help from the government. In fact, we pursued this case in the face of the government’s hostility.

The judgment stems from an October verdict finding Trinity liable for changing the design of the guardrails without getting approval from the U.S. Federal Highway Administration (FHWA), then misrepresenting them as the earlier, approved version even though they were more dangerous. Harman filed his original False Claims Act (FCA) complaint in 2012, alleging that Trinity falsely claimed its modified ET-Plus guardrail was properly crash-tested.

Trinity contended that the government cannot be defrauded because it was fully aware of the facts at the time the representations in question were made. But Harman argued that Trinity intentionally withheld information about the modifications from the government. Trinity says the FHWA has confirmed that the ET-Plus is fully compliant with federal safety regulations, and has always been eligible for reimbursement under the federal aid highway program. It’s certain that, after post-judgement motions, Trinity will appeal to the Fifth Circuit.

Agents from the U.S. Department of Transportation Inspector General’s office and from the FBI’s Boston office have opened a criminal investigation into Trinity and its relationship with the FHWA, according to Bloomberg and ABC News. The original ET-Plus was designed to absorb and dissipate a collision’s impact by flattening the guardrail and pushing it out into a ribbon that is deflected away from the collision, reducing the impact force felt inside a crashing vehicle.

The FHWA approved that device in 2000. But Harman claimed the company changed that design sometime between 2002 and 2005 and that the new design locks up, folds over and protrudes into the crashing vehicle. He says Trinity never disclosed those changes to the FHWA, nor did it test the units according to FHWA protocols. The FHWA partially approved the guardrails after a 2005 crash test, but it’s unclear whether Trinity used the new ET-Plus for the test.

 

Davita To Pay $495 Million

DaVita HealthCare Partners said Monday it will pay up to $495 million to settle a whistle-blower lawsuit accusing the Denver company of defrauding the federal Medicare program of millions of dollars.

The company, which said it does not admit any wrongdoing, has now settled its third whistle-blower lawsuit since 2012, with payouts totaling nearly $1 billion.

The civil suit, filed in Atlanta in 2011, revolves around a claim by Dr. Alon J. Vainer and nurse Daniel D. Barbir, who both worked for DaVita. They noticed that DaVita was throwing out good medicine that it then billed Medicare and Medicaid for, according to the lawsuit.

Vainer and Barbir, who could be paid up to $135 million as part of the settlement, said in court filings that they questioned DaVita about the waste and claimed the company submitted fraudulent claims for reimbursement between 2003 and 2010.

Lin Wood, the Atlanta-based attorney for the plaintiffs, and co-counsel Marlan B. Wilbanks did not return requests for comment on Monday.

DaVita Kidney Care CEO Javier Rodriguez said in a statement: "Our 67,000 teammates across 11 countries look forward to putting this behind us. We can now renew our focus on collaborating with regulators to avoid situations like this going forward."

The case began as a sealed lawsuit filed with the federal government in 2007. But, after two years of investigating, the government decided not to join the lawsuit, according to The New York Times.
Vainer and Barbir filed the case again under the False Claims Act in civil court in 2011.

The lawsuit cited DaVita's inefficient use and costly waste of the drugs Zemplar, or vitamin D, and Venofer, an iron supplement. If a patient, for example, needed 25 milligrams of Venofer, the physician would use that much and toss the rest of the 100 mg vial. Medicare would be billed for the 100 mg.

In other instances, if a patient needed 8 mg of Zemplar, DaVita doctors were instructed to a use a 10 mg vial, instead of four 2 mg vials.

According to the lawsuit, the National Centers for Disease Control and Prevention recommended against allowing multiple uses of the same vial in 2001, based on infection outbreaks caused by the re-entry of another drug, Epogen. But a year later, CDC changed its policy and allowed re-entry of single-use vials Epogen, Zemplar and Venofer if procedures were followed.

DaVita did not do this but "should have," according to the lawsuit, "but they (DaVita) intentionally did not do so in order to purposefully create and maximize their waste and receive significantly higher reimbursements and revenue for Venofer and Zemplar usage."

False Claims Act cases have the strongest whistle-blower protection in the U.S., according to the National Whistleblowers Center. Violators face huge penalties of $5,000 to $10,000 for each false claim. The whistle-blower could get between 15 to 30 percent of the settlement funds.

Because of its False Claims status, a DaVita loss during a jury trial could mean it must pay thousands of dollars per claim, which could be millions because it would count every instance a patient was given a dose of the drugs. DaVita announced the settlement in an April 15 Securities and Exchange Commission filing.

As part of the settlement, DaVita will pay the government $450 million, plus reserve an additional $45 million to cover fees. The government would then work with Vainer's and Barbir's lawyers to compensate the former DaVita employees.

"Although we believe strongly in the merits of our case, we decided it was in our stakeholders' best interests to resolve it," DaVita's chief legal officer Kim Rivera said in a statement Monday. "The potential mandatory penalties for being found in the wrong in even a small percentage of instances were simply too large."

Since the case was filed, DaVita has settled on two other lawsuits brought on by whistle-blowers. In 2012, DaVita agreed to pay $55 million to the federal government and others over fraud claims that it medically overused and double-billed the government for Epogen, an anemia drug. The suit was filed by Ivey Woodard, a former employee of Epogen-maker Amgen, in 2002.

In October, the company paid $389 million to settle criminal and civil investigations into whether DaVita offered kickbacks to kidney doctors for patient referrals. David Barbetta, a DaVita senior financial analyst, filed the suit in 2009. The company in January paid an additional $22 million to settle related claims by five states, including Colorado.

Whistleblower Awards Nearing $50 Million

Washington D.C., March 2, 2015 — 
                    
The Securities and Exchange Commission today announced a whistleblower award payout between $475,000 and $575,000 to a former company officer who reported original, high-quality information about a securities fraud that resulted in an SEC enforcement action with sanctions exceeding $1 million.

Officers, directors, trustees, or partners who learn about a fraud through another employee reporting the misconduct generally aren’t eligible for an award under the SEC’s whistleblower program.  However, there is an exception to this exclusion that makes an officer eligible if he or she reports the information to the SEC more than 120 days after other responsible compliance personnel possessed the information and failed to adequately address the issue.  This is the first SEC whistleblower award to an officer under these circumstances. 

“Corporate officers have front-row seats overseeing the activities of their companies, and this particular officer should be commended for stepping up to report a securities law violation when it became apparent that the company’s internal compliance system was not functioning well enough to address it,” said Andrew Ceresney, Director of the SEC’s Division of Enforcement. 

The SEC has now awarded 15 whistleblowers since its whistleblower program began more than three years ago.  Payouts have totaled nearly $50 million out of an investor protection fund established by Congress.  The fund is financed entirely through monetary sanctions paid to the SEC by securities law violators, and no money is taken or withheld from harmed investors to pay whistleblower awards.

Whistleblower awards can range from 10 percent to 30 percent of the money collected in a case.  By law, the SEC protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity.

“Receiving information and cooperation from company insiders is particularly useful in the early detection of securities fraud, and we will continue to leverage whistleblower information to help combat securities law violations and better protect investors and the marketplace,” said Sean McKessy, Chief of the SEC’s Office of the Whistleblower.  “Meanwhile, companies must have rigorous internal compliance programs that adequately address and remedy potential violations voiced by their employees as well as by their officers, directors, or other individuals.”

Whistblower Being Wronged For Doing Right!

    
Thomas Drake became a symbol of the dangers whistleblowers

face when they help journalists and Congress investigate

wrongdoing at intelligence agencies. He claims he was subjected to

a decade of retaliation by the National Security Agency that

culminated in his being charged with espionage.

But when the Pentagon Inspector General’s Office opened an

inquiry into the former senior NSA official’s allegations of

retaliation in 2012, it looked at only two of the 10 years detailed in

his account, according to a recently released Pentagon summary of

the probe, before finding no evidence of retaliation. That finding

ended Drake’s four-year effort to return to government service.

Whistleblower advocates say Drake’s experience, spelled out in a

document McClatchy obtained this month through the Freedom of I

information Act, underscores the problem that intelligence and

defense workers face in bringing malfeasance to the surface. The

agencies that are supposed to crack down on retaliation are not up

to the task, especially when the alleged wrongdoing involves

classified information, they charge.

“This report epitomizes the utter lack of protection for national

security whistleblowers,” said Jesselyn Radack, Drake’s attorney.

“This is a pathetic, anemic excuse for an investigation.”

Although investigators appear to have rejected Drake’s claims

almost a year ago, the Pentagon Inspector General’s Office did not

publicly disclose its findings and hadn’t shared them even with

Drake’s attorneys. McClatchy gave the attorneys a copy of the

report.


The news of the rejection comes as McClatchy has learned that the

same officials who are supposed to be helping whistleblowers such

as Drake claim that they themselves have been forced to blow the

whistle on their own office.

Multiple former and current officials from the Pentagon Inspector

General’s Office have alleged to the Office of Special Counsel, the

independent government agency that investigates whistleblower

claims, that they’ve been retaliated against for objecting to how

cases are handled. Drake’s case is one of several singled out for

criticism.
  “It illustrates the bleak landscape faced by whistleblowers and IG  investigators,” said one of the several people who described the  accusations but asked to remain anonymous because of the  sensitivity of the matter. “The numerous allegations of reprisal and  misconduct directed against senior IG officials call into question  the efficacy of the whistleblower mission. If true, one can make the  case that the office of inspector general has failed.”

Read more here: http://www.charlotteobserver.com/2015/02/23/5534356/rejection-of-nsa-whistleblowers.html#storylink=cpy

Whistleblower Advocate Attorney General Eric Holder



U.S. Attorney General Eric Holder on Wednesday called for Congress to take steps to help prosecutors build criminal cases against senior Wall Street executives, saying companies often insulated their leaders from responsibility for misconduct.

Holder made some of his most extensive comments yet on improving the prosecution of white-collar crime. He called on Congress to boost rewards for Wall Street whistleblowers and fund more FBI agents with forensic accounting expertise.

It has reached multibillion-dollar settlements with institutions including JPMorgan Chase & Co, Bank of America Corp and Citigroup Inc, for misrepresenting risks of shoddy mortgage bonds sold before the crisis. But no individuals have faced related charges.

"When it comes to financial fraud, the department recognizes the value of bringing enforcement actions against individuals, as opposed to simply the companies that employ them," Holder said. But he said prosecutors could not always prove that operations knew about a particular scheme. He said blurred lines of authority often make it hard to name the person responsible for individual business decisions.

Holder suggested lawmakers consider a rule in the Sarbanes-Oxley Act of 2002 that requires a single executive to sign accounting forms and bear liability for misrepresentations, and examine whether it could be applied to other areas of corporate wrongdoing.

"We need not tolerate a system that permits top executives to enjoy all of the rewards of excessively risky activity while bearing none of the responsibility," he said, before an audience that included Manhattan U.S. Attorney Preet Bharara and U.S. District Judge Jed Rakoff.

COOPERATORS

Also on Wednesday, another top Justice Department official said prosecutors have put individuals at the center of probes into corporate misconduct.

"If you want full cooperation credit, make your extensive efforts to secure evidence of individual culpability the first thing you talk about when you walk in the door to make your presentation," Marshall Miller, the No. 2 official in the Criminal Division told an audience of lawyers who conduct corporate investigations
.
Reuters reported last week that prosecutors in cases of foreign bribery and other white-collar crimes have used more investigative tools such as body wires and search warrants and also improved relationships with counterparts overseas to build stronger cases against individuals.
Since the financial crisis, prosecutors have stepped up efforts to pursue bankers, traders and others in finance for other types of fraud including insider trading and manipulation of interest rate benchmarks and foreign exchange rates.

Holder confirmed that the department had obtained undercover cooperators as part of its probe into the manipulation of foreign exchange rates, and expected to bring charges against individuals in financial fraud cases in the "coming months."

But the law caps rewards for potential whistleblowers in cases that do not involve fraud against government programs and hurts the ability of prosecutors to get Wall Street executives to cooperate, Holder said in his speech. "We should seek to better equip investigators to obtain this often elusive evidence," Holder said.

In one recent case in which a federal judge ordered Bank of America to pay $1.27 billion for fraud at its Countrywide unit, a whistleblower who served as the government's star witness is entitled to $1.6 million. Holder described that amount as a "paltry sum" for an industry in which the collective bonus pool stood above $26 billion last year and median executive pay was $15 million.

In addition to cooperators, Holder said prosecuting white-collar crime also requires FBI agents sophisticated enough to know what questions to ask and what to look for when those witnesses do come forward. He called on Congress to consider more resources for the FBI to sustain efforts to investigate financial crime.

Whistleblower Settlements Summary 2014

There were a number of settlements and verdicts around the country in whistleblower cases in August. This is an area of litigation that is expanding rapidly.



COMMUNITY HEALTH SYSTEMS TO PAY $98 MILLION IN SETTLEMENT

The nation’s largest operator of acute care hospitals, Community Health Systems, Inc., has agreed to pay $98 million to settle claims that the company billed government health care programs for inpatient services that should have been billed as significantly less expensive outpatient or observation services. CHS was said to have engaged in a corporate-driven scheme to increase inpatient admissions of Medicare, Medicaid and TRICARE beneficiaries older than 65. The government further claimed that the inpatient admissions were not medically necessary and should have been provided in a less costly outpatient or observation setting.

The settlement resolves lawsuits filed by several whistleblowers under the qui tam provisions of the False Claims Act. Since January 2009, the Justice Department has recovered more than $20.2 billion through False Claims Act cases.


MCKESSON TO PAY $18 MILLION TO END CDC DRUG SHIPMENT CLAIMS

Pharmaceutical distributor McKesson Corp. will pay $18 million to settle whistleblower claims that it improperly set temperature monitors outside contractual limits when shipping vaccines for the Centers for Disease Control and Prevention . The U.S. Department of Justice announced the settlement on August 8. San Francisco-based McKesson signed a contract with the CDC in 2007 requiring it to set electronic devices in shipping containers to detect whether temperatures strayed outside a slim range just above freezing. The False Claims Act suit, filed by a former financial director, alleged the company instead set the monitors for a much wider range that would have allowed vaccines to freeze or reach room temperature without alerting personnel.

The CDC said the monitors were a backup system and that the vaccines were properly packed in insulated containers and transported at the right temperatures. McKesson maintained that the temperature monitors complied with the contract. The relator in the lawsuit, Terrell Fox, alleged that from April to November, McKesson shipped vaccines from manufacturers to health care providers and set monitors to go off only if the vaccines were colder than -1 degree Celsius and warmer than 25 degrees.
It was alleged that the vaccines were supposed to stay refrigerated and never freeze and that the correct range should have been from 2 to 8 degrees Celsius. Fox said that McKesson violated the contract and knowingly submitted false claims in an attempt to avoid liability for replacing potentially ruined vaccines. The vaccines shipped by McKesson were intended for children. 

VASCULAR SOLUTIONS SETTLES FALSE CLAIMS ACT CASE

Vascular Solutions (VSI) will pay $520,000 to resolve allegations that it caused false claims to be submitted to federal health programs by marketing a medical device for the ablation (or sealing) of perforator veins without U.S. Food and Drug Administration (FDA) approval and despite the failure of its own clinical trial. VSI, a medical device company based in Minneapolis, Minn., markets and sells medical devices that treat varicose veins by sealing the veins with laser energy – endovenous laser ablation. Their products include consoles, which generate the laser energy, and accessory kits.
In 2010, DeSalle Bui, a former Vascular Solutions salesperson, sued the company. The U.S. Attorney’s Office in Texas subsequently intervened in the case. The lawsuit accused VSI of “off-label promotion” of its Vari-Lase products, saying the company marketed the product for the treatment of perforator veins despite the fact that it wasn’t approved for such uses. The lawsuit alleged that the improper promotion of the product, as well as kickbacks that VSI paid to physicians, caused the government to lose roughly $20 million, as health care providers submitted claims to government programs such as Medicare.


JURY AWARDS $730,000 IN WHISTLEBLOWER LAWSUIT

A jury has returned a $730,000 verdict in favor of a whistleblower who reported on an unethical pain management study on prison inmates by researchers at the University of California, Davis. Janet Keyzer, a former UC Davis administrative nurse, claimed in a lawsuit that her career was ruined when she raised questions about whether the research project on physically and mentally disabled inmates at San Quentin Prison had obtained consent from its subjects. The Superior Court jury’s verdict was in favor of the 59-year-old Keyzer. She had worked for the university’s Center for Healthcare Policy and Research for more than nine years at the time of her termination in 2007.

Whistleblower-Rules To Live By

 

WARNING: If you believe your employer or individuals at your work place are committing federal fraud, DO NOT communicate with us from your company e-mail, computers, fax, phone or any communication device.

If you have information about fraud taking place in your workplace, we can help you resolve the problem without risking your job, your health, or your family. There may also be a substantial cash reward for reporting the fraud, sometimes in the millions of dollars. But we can’t help you if you get fired for calling us or emailing us from your workplace.

Because we cannot guarantee that your employer is not monitoring your communications, we recommend contacting us from your home telephone or computer. We can help you if you are worried about what will happen because you did the right thing and reported potential fraud, but there is no need to take unnecessary risks.

So please, be safe and use your home computer or telephone to talk with us. We’re here to help.

LB & B claims to be minority owned to qualify for grant money!

Funny what some people will do for money isn't it.

This information taken directly from the LB & B Website

Success
            Our success is a combination of customer satisfaction, employee satisfaction, high productivity and efficient operations.

 Ethics and Integrity
            Our integrity and ethics will never be compromised. Each and every employee must be challenged, recognized and involved.

It's amazing the lengths people will go to get free money. This company thought it would be a good idea to claim that it was owned by someone who was socially and economically disadvantaged in order to qualify for a Section 8(a) program. They also used this status to qualify for SBA's Mentor Protégé program. They were eventually brought to justice on both counts. The first was headed by former employees and the latter was prosecuted by the Federal government.

The question I have is how many other free money sources did they oust before people caught on to what they were doing and also how many other fraudulent companies are adhering to the same type of false funding options. This is very frustrating to the common person who not only supports and donates to these false causes, but also to the other legitimate company's that lost out on financial assistance.

How do you feel about this company? Do you know of any such false organizations? If so please contact our office today. James Vander Linden  (612) 339-6841,or email   jim@vanderlindenlaw.com.