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.

Columbus Regional Healthcare System and Physician Ordered to Pay Over $25Million False Claims Violation

Columbus Regional Healthcare System and Dr. Andrew Pippas have agreed to pay more than $25 million to resolve allegations that they violated the False Claims Act by submitting claims in violation of the Stark Law.  Under the settlement agreement, Columbus Regional has agreed to pay $25 million, plus additional contingent payments not to exceed $10 million, for a maximum settlement amount of $35 million, and Pippas has agreed to pay $425,000.

The Stark Law prohibits physician referrals of certain health services for Medicare and Medicaid patients if the physician has a financial relationship with the entity to which he or she refers the patient.  The United States alleged that between 2003 and 2013, Columbus Regional provided excessive salary and directorship payments to Pippas that violated the Stark Law.

The United States also alleged that from May 2006 through May 2013, Columbus Regional submitted claims to federal health care programs for services at higher levels than supported by the documentation, and between 2010 and 2012, they submitted claims to federal health care programs for radiation therapy at higher levels than the therapy that was provided.

 

Of the $25.425 million that Columbus Regional and Pippas have agreed to pay to resolve their respective civil claims, they will pay $24,666,040 to the federal government for federal healthcare program losses and $758,960 to the state of Georgia for the state share of its Medicaid losses. 

Also as part of the settlement, Columbus Regional will enter into a Corporate Integrity Agreement  with the Department of Health and Human Services-Office of the Inspector General that requires Columbus Regional to implement measures designed to avoid or promptly detect future conduct similar to that which gave rise to this settlement.

 

 

Walter Investment Management Corp. Must Pay More than $29 Million

 

The Justice Department announced today that Walter Investment Management Corp. WIMC has agreed to pay $29.63 million to resolve allegations that WIMC, through its subsidiaries, Reverse Mortgage Solution Inc., REO Management Solutions LLC and RMS Asset Management Solutions LLC, violated the False Claims Act in connection with their participation in the Department of Housing and Urban Development’s Home Equity Conversion Mortgages program, which insures “reverse” mortgage loans.  WIMC, through subsidiaries such as RMS and Green Tree Servicing LLC, provides business support to the residential mortgage industry, including servicing of reverse or forward mortgages on behalf of major financial institutions.*

“The Department of Justice is committed to ensuring that those who service HUD-insured reverse mortgages are held accountable for their knowing failure to comply with important HUD requirements,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Schemes such as these undermine an important tool available to older Americans who wish to use a HUD-insured reverse mortgage loan to age in place.”

Reverse mortgage loans allow elderly people to access the equity in their homes.  To encourage reverse mortgage loans, HUD insures such loans through a program administered by HUD’s Federal Housing Administration.  Under HUD’s program, a loan becomes due and payable when the home is sold or vacant for more than 12 months or upon the death of the homeowner, whichever comes first.  The lender is repaid the amount of the loan, including the costs of servicing the loan and interest that accrues, after a loan becomes due and payable.  HUD will reimburse a lender that is unable to recoup the full amount of the loan.  In order to file a claim, the servicer is required to meet a number of requirements and deadlines.  Failure to meet these requirements and deadlines could result in denial of the insurance claim.

The government alleged that, from August 2009 to March 2015, RMS, with the knowledge and support of its corporate parent, WIMC, submitted false claims for debenture interest from HUD by failing to properly disclose that it had not met certain deadlines and, therefore, was not entitled to such interest payments.  In order to obtain such interest, HUD requires lenders and their servicers to obtain appraisals within 30 days of the loan becoming due and payable.  The significance of the 30-day appraisal requirement is, among other things, to establish a mutual understanding between the lender and HUD as to the market value of the property so that a decision can be made as to whether to proceed with foreclosure, engage in a workout with the lender or deal with estate rights issues.

The government also alleged that from July 2010 to October 2014, WIMC, through its subsidiaries, submitted false claims to HUD for the reimbursement of unlawful referral fees by falsely representing them to be lawful sales commissions.  As part of an insurance claim, HUD will reimburse lenders or their servicers for sales commissions paid to real estate agents as part of the liquidation of foreclosed properties.  HUD will not, however, reimburse lenders or their servicers for fees paid for the referral of liquidation business.  According to the government, RMS often used straw companies to liquidate foreclosed properties.  Upon sale of the foreclosed property, the straw companies split the six-percent sales commissions: the real estate agents shared a five-percent sales commission and the companies kept a one-percent referral fee.  These straw companies, in turn, deducted a small fee from the one-percent referral fee and kicked the remainder back to RMS.  Nonetheless, RMS submitted insurance claims to HUD that included payment for the full six-percent sales commission, when, in fact, the payment included a prohibited referral fee.

The settlement resolves allegations filed in a lawsuit by Matthew McDonald, a former executive of RMS, under the qui tam, or whistleblower, provisions of the False Claims Act.  The act permits private individuals to sue on behalf of the government for false claims and to share in any recovery.  The False Claims Act also permits the government to intervene in such lawsuits, as it did in this case.  Mr. McDonald will receive $5.15 million as his share of the recovery in this case.

This information verified by the Dept. of Justice

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.   

 

EDF Resource Capital Inc. Violates False Claims Act

 

EDF Resource Capital Inc. and its CEO, Frank Dinsmore, have agreed to resolve allegations that they violated the False Claims Act and otherwise failed to remit payments owed to the Small Business Administration (SBA) under the 504 loan program, the Department of Justice announced today.  Under the settlement agreement, EDF and Dinsmore have agreed to make payments and turn over certain assets to the United States for a total settlement of approximately $6 million.

The SBA 504 loan program provides growing businesses with long-term, fixed-rate financing for major fixed assets, such as land and buildings.  Under the program, local lenders like EDF are responsible for arranging, servicing and collecting on these small business loans, which are guaranteed, in part, by the SBA.  In return for the authority to make determinations on 504 loans without prior SBA approval, EDF was required to bear a share of any losses suffered by the SBA on such loans and to maintain a loan loss reserve fund (LLRF) to help ensure payment of its loss-sharing obligations. 

This settlement resolves claims that EDF and Dinsmore violated the False Claims Act in connection with EDF’s failure to maintain adequate reserves in its LLRF.  EDF allegedly was required to fund its LLRF at a level determined by the riskiness of its 504 loan program portfolio yet knowingly concealed from the SBA hundreds of troubled loans to avoid its obligation to fully fund its LLRF.

The settlement also resolves a lawsuit filed by the United States against EDF and a related entity, Redemption Reliance LLC, alleging that EDF failed to remit required payments to the SBA to satisfy its loss-sharing obligations.  The lawsuit also alleges that the SBA agreed to advance funds to EDF in connection with certain defaulted 504 loans but that, after EDF assigned the loan documents for these loans to Redemption Reliance, neither EDF nor Redemption Reliance remitted the monies owed on these loans to the SBA. 

“The 504 Loan Program provides small businesses with access to the capital they need to start, grow and succeed,” said General Counsel Melvin F. Williams Jr. of the SBA.  “SBA has no tolerance for fraud, waste, or abuse by participants in the 504 Loan Program.  Working with the attorneys at the Department of Justice and SBA’s Office of Inspector General, this settlement marks the successful conclusion of a major enforcement action.”        

“The defendants’ misrepresentations to SBA knowingly put the taxpayer’s money at risk,” said Inspector General Peggy E. Gustafson of the SBA.  “As stewards of the taxpayers’ money, the SBA must guard against losses within its loan portfolios.  In this instance, the actions of the defendants did not allow SBA to protect taxpayers from such losses.  I want to thank the Department of Justice and our investigative partners for achieving this settlement.”

This information confirmed via the US Dept. of Justice.

Missouri Health Care Providers Violate False Claims Act to Pay $5.9 Million

Two Southwest Missouri health care providers have agreed to pay the United States $5.5 million to settle allegations that they violated the False Claims Act by engaging in improper financial relationships with referring physicians, the U.S. Justice Department announced today.  The two providers are Mercy Health Springfield Communities, formerly known as St. John’s Health System Inc., which owns and operates a hospital in Springfield, Missouri, and its affiliate, Mercy Clinic Springfield Communities, formerly known as St. John’s Clinic, which operates health care facilities in southwest Missouri. 

“Financial relationships between heath care providers and their referral sources must be structured to comply with all applicable laws,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, the head of the Justice Department’s Civil Division.  “When physicians are rewarded financially for referring patients to hospitals or other health care providers, it can affect their medical judgment, resulting in overutilization of services that drives up health care costs for everyone.  In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable.”

“This settlement protects patients and the public by enforcing the federal protections against illegal profit incentives for physicians,” said U.S. Attorney Tammy Dickinson of the Western District of Missouri. “A bonus structure that rewards physicians based on the value of their referrals is detrimental to both the quality and the cost of health care. Patients deserve assurances that they are receiving appropriate medical care, unbiased by hidden incentives. And taxpayers deserve assurances that the cost of public health care programs is not inflated by unnecessary procedures and services.”

“Health care organizations paying physicians based on referrals – as alleged in this case – undermines public trust in medical institutions and the financial integrity of federal health care programs,” said Special Agent in Charge Gerald T. Roy of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG).  “We will aggressively pursue organizations that engage in conduct detrimental to taxpayers and government health programs.”

The settlement announced today resolved allegations that the defendants submitted false claims to the Medicare program for services rendered to patients referred by physicians who received bonuses based on a formula that improperly took into account the value of the physicians’ referrals of patients to the clinic.  Federal law restricts the financial relationships that hospitals and clinics may have with doctors who refer patients to them.

The allegations settled today arose from a lawsuit filed by a whistleblower, Dr. Jean Moore, a physician who is employed by one of the defendants, under the qui tam provisions of the False Claims Act.  Under the act, private citizens can bring suit on behalf of the government for false claims and share in any recovery.  Dr. Moore will receive $825,000 from the recovery announced today.

Biomax Pharmacy Guilty of Medicare Fraud

According to the Department of Justice

 

A Miami-area pharmacy owner pleaded guilty today to submitting almost $1.6 million in fraudulent claims to Medicare.

Tamara Esponda, 47, of Miami, pleaded guilty before U.S. District Judge James I. Cohn of the Southern District of Florida to one count of health care fraud.  Sentencing has been scheduled for Nov. 13, 2015.

Esponda owned Biomax Pharmacy Inc.  In connection with her guilty plea, Esponda admitted that, between October 2012 and September 2013, Biomax Pharmacy submitted almost $1.6 million in fraudulent claims to Medicare for prescription drugs that were not prescribed by physicians, not medically necessary, not purchased by Biomax Pharmacy and not provided to Medicare beneficiaries.  Medicare paid 100 percent of the claims.

According to Esponda’s admissions, she and her accomplices stole or illegally paid for unique identifying information of Medicare beneficiaries, and used this information to submit the fraudulent claims.  Esponda also admitted that she controlled Biomax Pharmacy’s bank accounts, and that she transferred the payments received from Medicare to herself and her accomplices.

This case is being investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Southern District of Florida.  This case is being prosecuted by Trial Attorney Timothy P. Loper of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion.  In addition, the U.S. Department of Health and Human Services (HHS) Centers for Medicare & Medicaid Services, working in conjunction with the HHS-Office of Inspector General, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Evelio Penaranda Owner of Naranja Pharmacy Guilty of Medicare Fraud

A Miami-area pharmacy owner pleaded guilty today for his role in the submission of more than $1.8 million in fraudulent claims to Medicare.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s Miami Regional Office made the announcement.

Evelio Fernandez Penaranda, 47, of Miami, Florida, pleaded guilty before U.S. Magistrate Judge Chris M. McAliley of the Southern District of Florida to one count of health care fraud.  Sentencing has been scheduled for Oct. 8, 2015.

Penaranda owned Naranja Pharmacy Inc.  In connection with his guilty plea, Penaranda admitted that, between May 2013 and March 2014, Naranja Pharmacy submitted fraudulent claims to Medicare for prescription drugs that were not prescribed by physicians, not medically necessary and not provided to Medicare beneficiaries.  According to admissions made in connection with Penaranda’s guilty plea, Naranja Pharmacy submitted these false claims by obtaining and using the unique identifying information of Medicare beneficiaries and doctors without their consent.

Penaranda admitted that he controlled Naranja Pharmacy’s bank accounts, and that he transferred the payments received from Medicare to himself and his accomplices.  According to admissions made in connection with Penaranda’s plea, during the course of the scheme, Naranja Pharmacy submitted to Medicare over $1.8 million in false claims for prescription drugs, and Medicare paid 100 percent of the claims.

The case is being investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Southern District of Florida.  The case is being prosecuted by Trial Attorney Nicholas E. Surmacz of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

DaVita To Pay $450 Million For Violating False Claims Act

DaVita Healthcare Partners, Inc., the largest provider of dialysis services in the United States, has agreed to pay $450 million to resolve claims that it violated the False Claims Act by knowingly creating unnecessary waste in administering the drugs Zemplar and Venofer to dialysis patients, and then billing the federal government for such avoidable waste.  Davita is headquartered in Denver, Colorado, and has dialysis clinics in 46 states and the District of Columbia.

“This settlement is an example of what can be accomplished as a result of the successful cooperation between the government and whistleblowers in protecting our vital federal health care programs,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.

This civil settlement resolves allegations brought in a whistleblower action that DaVita devised and employed dosing grids and/or protocols specifically designed to create unnecessary waste of the drugs Venofer and Zemplar.  These drugs are packaged in single-use vials, which are intended for one-time use. Sometimes, the amount of the drug in the vials does not match the dosage specified by the physician, resulting in the remainder of the drug in the vial being discarded.

At the time of the alleged scheme, Medicare would reimburse a dialysis provider for certain waste if the dialysis provider – acting in good faith – discarded the remainder of the drug contained in a single-use vial after administering the requisite dose and/or quantity of the drug to a Medicare patient.

The whistleblowers’ complaint alleged that, to create unnecessary Zemplar waste, DaVita required its employees to provide Zemplar to dialysis patients pursuant to mandatory and wasteful “dosing grids.”  Zemplar, a Vitamin D supplement usually administered at every dialysis session, is packaged in single-use vial sizes of 2 mcg, 5 mcg, and 10 mcg. Davita allegedly created unnecessary waste by requiring its employees to provide Zemplar to dialysis patients pursuant to mandatory “dosing grids,” which were designed to maximize the amount of Zemplar administered to patients.  DaVita then allegedly billed the government not only for the amount of Zemplar administered to patients, but also for the amount “wasted.”
With regard to Venofer, an iron supplement packaged only in a single-use vial size of 100 mg during the relevant time period, DaVita allegedly enacted protocols that required nurses to administer this drug in small amounts, and at frequent intervals, to maximize wastage. For instance, in certain instances, DaVita’s protocol called for a patient to receive 25 mg of Venofer per week, which resulted in 300 mg of waste per month that was billed to the Government.  In contrast, if the order had been filled by giving the patient the entirety of a single 100 mg vial, once per month, no waste would have resulted.

In 2011, the Centers for Medicare and Medicaid Services changed the manner by which it reimbursed dialysis providers for such drugs.  As a consequence, wastage derived from single-use vials was no longer profitable, and, as a result, DaVita allegedly changed its practices and reduced its drug wastage dramatically.

“Through personal sacrifice and courage, two whistleblowers exposed knowingly wasteful dosing practices designed simply to increase profits and improperly drain the government’s resources,” said Acting U.S. Attorney John Horn of the Northern District of Georgia.  “This settlement returns hundreds of millions of dollars to the treasury that had been improperly obtained by DaVita through these wasteful practices.”

The allegations resolved today arose from a lawsuit filed and ultimately litigated to this succesful resolution by two whistleblowers, Dr. Alon Vanier and nurse Daniel Barbir, under the qui tam provisions of the False Claims Act.  Under the Act, private citizens can bring suit on behalf of the government for false claims and share in any recovery.  The United States may intervene in the action or, as in this case, the whistleblower may pursue the matter.

Trinity Ordered To Pay Settlement Of $663 Million

Joshua Harman, a Virginian with two small highway safety companies, made a discovery in late 2011 that perhaps only a guardrail maker could: A big competitor had changed the dimensions of its roadside safety device by as much as an inch here and there, he said, without telling federal regulators.

As designed, Trinity Industries Inc.’s ET-Plus system was meant to turn the end of a guardrail into a de facto shock absorber. The altered units, as Harman saw it, were locking up when hit, spearing cars and their occupants.

 

Harman, 46, spent 3 1/2 years trying to prove his point, driving hundreds of thousands of miles to inspect twisted guardrails at crash sites. In 2012 he sued Trinity, accusing it of hiding the potentially deadly alterations from the Federal Highway Administration. On Tuesday, almost eight months after a Texas jury agreed Trinity had defrauded taxpayers, the judge issued a final penalty: Trinity must pay $663 million, with $199 million of that going to Harman and the rest to the government.

It was one of the largest awards to taxpayers under the U.S. False Claims Act as well as the largest to an individual whistle-blower, said Patrick Burns, co-director of the nonprofit group Taxpayers Against Fraud Education Fund.

Harman, who lost his left leg in a construction accident two decades ago, said he brought the case to raise awareness about a safety risk that he says cost many victims their limbs. At least nine deaths have been linked in personal-injury lawsuits to the ET-Plus.

“I have sacrificed everything I’ve got to facilitate this situation,” Harman said. “With this $663 million judgment, it opens the eyes, hopefully, of the nation.”

Harman, whose guardrail manufacturing company filed for bankruptcy protection in March, may never collect on the award if Trinity, the biggest U.S. maker of highway safety equipment, wins on appeal.

Jeff Eller, a spokesman for Dallas-based Trinity, said in an e-mail that “the judgment is erroneous and should be reversed in its entirety.”

Trinity has said the changes didn’t detract from the safety of its ET-Plus units, which have been successfully tested multiple times. The company, whose shares have fallen 18 percent since the verdict, is defending more than 20 lawsuits over the safety of the ET-Plus.

One day after the October verdict, the FHWA, which evaluates highway devices before declaring them eligible for federal reimbursement, ordered a review of the ET-Plus. The system passed all eight crash tests since then, the agency said in March.

Health Diagnostics Lab To Pay $47 Million in False Claims Settlement

 

 

Cardiovascular testing disease laboratories Health Diagnostics Laboratory Inc. (HDL), of Richmond, Virginia, and Singulex Inc., of Alameda, California, have agreed to resolve allegations that they violated the False Claims Act by paying off physicians in exchange for patient referrals and billing federal health care programs for medically unnecessary testing, the Department of Justice announced today.

Under the settlements, which stem from three related whistleblower actions filed under the federal False Claims Act, HDL will pay $47 million and Singulex will pay $1.5 million.  The government also intervened in the lawsuits as to similar allegations against another laboratory, Berkeley HeartLab Inc.; a marketing company, BlueWave Healthcare Consultants Inc., and its owners, Floyd Calhoun Dent and J. Bradley Johnson; and former CEO Latonya Mallory of HDL.

As alleged in the lawsuits, HDL, Singulex and Berkeley induced physicians to refer patients to them for blood tests by paying them processing and handling fees of between $10 and $17 per referral and by routinely waiving patient co-pays and deductibles.  In addition, HDL and Singulex allegedly conspired with BlueWave to offer these inducements on behalf of HDL and Singulex.  As a result, physicians allegedly referred patients to HDL, Singulex and Berkeley for medically unnecessary tests, which were then billed to federal health care programs.

 

The lawsuits were filed by Dr. Michael Mayes, Scarlett Lutz, Kayla Webster and Chris Reidel under the qui tam, or whistleblower, provisions of the False Claims Act.  Under the act, private citizens can bring suit on behalf of the government for false claims and share in any recovery.  The whistleblowers’ share of the settlements has yet to be determined.  The act also permits the United States to intervene in and take over a whistleblower suit, as it has done in part in the three actions.  The United States advised the court that it would be filing its own complaint against the corporate and individual defendants against whom it has intervened within 120 days.

Medtronic Guilty Of Violating False Claims Act While Producing Medical Implants

Medtronic to Pay $4.41 Million to Resolve Allegations that it Unlawfully Sold Medical Devices Manufactured Overseas

The Justice Department announced today that Medtronic plc and affiliated Medtronic companies, Medtronic Inc., Medtronic USA Inc., and Medtronic Sofamor Danek USA Inc., have agreed to pay $4.41 million to the United States to resolve allegations that they violated the False Claims Act by making false statements to the U.S. Department of Veterans Affairs (VA) and the U.S. Department of Defense (DoD) regarding the country of origin of certain Medtronic products sold to the United States.

“Today’s settlement demonstrates our commitment to ensure that our service members and our veterans receive medical products that are manufactured in the United States and other countries that trade fairly with us,” said Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “The Justice Department will take action to hold medical device companies to the terms of their government contracts.”

“Domestic manufacture is a required component of many military and Veterans Administration contracts,” said U.S. Attorney Andrew M. Luger of the District of Minnesota.  “Congress has mandated that the United States use its purchasing power to buy goods made in the United States or in designated countries.  We take that mandate seriously and will not hesitate to take appropriate legal action to ensure compliance.”

According to the settlement agreement, between 2007 and 2014, Medtronic sold to the VA and DoD products it certified would be made in the United States or other designated countries.  The Trade Agreements Act of 1979 (TAA) generally requires companies selling products to the United States to manufacture them in the United States or in another designated country.  The United States alleged that Medtronic sold to the United States products manufactured in China and Malaysia, which are prohibited countries under the TAA.The specific Medtronic products at issue included anchoring sleeves sold with cardiac leads and used to secure the leads to patients, certain instruments and devices used in spine surgeries, and a handheld patient assistant used with a wireless cardiac device.  The agreement covers the period from Jan. 1, 2007, to Dec. 31, 2013, and for one device (the handheld patient assistant), the period from Jan. 1, 2014, to Sept. 30, 2014.The settlement resolves allegations originally brought in a lawsuit filed by three whistleblowers under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and share in any recovery. The relators will receive a total of $749,700 of the recovered funds. This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $23.9 billion through False Claims Act cases, with more than $15.2 billion of that amount recovered in cases involving fraud against federal health care programs.

The case was handled by the U.S. Attorney’s Office of the District of Minnesota with assistance from the Civil Division, DoD, Defense Logistics Agency and Defense Criminal Investigative Service and the VA’s Office of General Counsel.

Adventist Healthcare Admits Guilt For ViolatingFalse Claims Act

Adventist Health System Sunbelt Healthcare Corporation (Adventist) has agreed to pay $5,412,502 to resolve claims that it violated the False Claims Act by providing radiation oncology services to Medicare and TRICARE beneficiaries that were not directly supervised by radiation oncologists or similarly qualified persons, the Department of Justice announced.  Adventist is a non-profit healthcare organization operating a large network of hospitals in the South and the Midwest, and doing business in Florida as Florida Hospital.         

“The settlement demonstrates our continued vigilance to ensure that federal health care beneficiaries receive the highest quality of patient care,” said Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “It is critical that health care providers adequately supervise the services they provide to their patients.”

Radiation oncology services provided to patients served by Medicare and TRICARE, the Department of Defense’s health care program, must be directly supervised by a radiation oncologist or similarly qualified personnel.  The United States alleged that, from Jan. 1, 2010, through Dec. 31, 2013, Adventist violated this supervision requirement for radiation oncology services provided to federal health care program beneficiaries at several Florida locations, including in Altamonte Springs, Daytona Beach, Deland, Kissimmee, Orange City, Orlando, Palm Coast and Winter Park.  These services included radiation simulation, dosimetry, radiation treatment delivery and devices, and intensity-modulated radiation therapy.

“Medicare and TRICARE patients deserve high quality health care,” said U.S. Attorney A. Lee Bentley III of the Middle District of Florida.  “We will not tolerate providers recklessly cutting corners, particularly when furnishing such critical medical services as radiation oncology.”
The settlement partially resolves allegations made in a qui tam lawsuit under the False Claims Act filed in Tampa, Florida, by Dr. Michael Montejo, a radiation oncologist and former employee of Florida Oncology Network P.A., a radiation oncology group.  The act permits private individuals to sue on behalf of the government for false claims and to share in any recovery.  Dr. Montejo will receive $1,082,500 as his share of the recovery. 

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Cardiac Monitoring Company to Pay $6.4 Million Thanks to the False Claim Act

BioTelemetry Inc., a heart monitoring company headquartered in Malvern, Pennsylvania, has agreed to pay $6.4 million to resolve allegations made under the False Claims Act that its subsidiary, CardioNet, overbilled Medicare and other federal health programs for Mobile Cardiac Outpatient Telemetry services when those services were not reasonable or medically necessary.

“Billing for a higher-level service that is not necessary to treat a patient’s condition to receive higher reimbursement from federal health care programs will not be tolerated,” said Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “Such conduct wastes critical federal health care program funds and drives up the costs of health care for all of us.”

 “This settlement should send a message to all providers: do not misuse federal billing systems to improperly gouge the healthcare system upon which so many Americans rely.”

An MCOT monitor provides real-time, outpatient cardiac monitoring.  MCOT monitors are worn by patients for a period of time during which the device continuously records the activities of the patient’s heart, including any irregular rhythms or other cardiac event, and transmits data to CardioNet’s diagnostic center using cell phone technology.  Traditional, less expensive event monitors only download patient data periodically over a landline.

The government alleges that CardioNet was aware that MCOT services were not eligible for Medicare reimbursement when provided to patients who had experienced only mild or moderate heart palpitations, since less expensive monitors could effectively collect data about those patients’ conditions.  Nonetheless, CardioNet allegedly submitted claims to Medicare for those patients containing the billing code for the more expensive MCOT services along with an inaccurate diagnostic code that misrepresented the true condition of the patients and their need for MCOT services.

“Federal employees deserve health care providers, including remote monitoring companies, that meet the highest standards of ethical and professional behavior,” said Inspector General Patrick E. McFarland of the U.S. Office of Personnel Management.  “Today's settlement reminds all providers that they must observe those standards, and reflects the commitment of federal law enforcement organizations to pursue improper and illegal billings that increase the cost of medical care.”

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.

  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $23.8 billion through False Claims Act cases, with more than $15.2 billion of that amount recovered in cases involving fraud against federal health care programs.

False Claims Act Enforced With Back Surgeons- Investors

Federal probe of doc-owned   distributorship yields False Claims suit



The Justice Department is moving forward with False Claims Act allegations against a company that sells spine implants to hospitals, alleging that the company and its owners made improper payments to surgeons to use the company's medical devices in the procedures they performed.

A complaint was filed in U.S. District Court in the Central District of California against Reliance Medical Systems, a marketer and distributor of spine-implant devices; the three owners of Reliance Medical; and Dr. Aria Sabit, a neurosurgeon who invested in Reliance Medical.

Physician-owned distributors and distributorships, or PODs, sell and distribute medical implants.Hospitals buy the devices and the surgeons who perform procedures using the implants are often owners or investors in the PODs.

 

Over the last few years, these kinds of companies have come under scrutiny. That led the HHS' Office of the Inspector General to last year issue a special fraud alert calling PODs “inherently suspect” under the anti-kickback statute and a report that found hospitals that purchased implants from PODs reported increases in volumes of spinal surgeries.

The lawsuit is considered significant because "it appears to be the first time any of the government's POD investigations have caused the government to file its own (False Claims Act) lawsuit based on the theory" that a physician's return on the investment is a kickback.

Drug Promoting and Marketing Error Costs Shire Pharmaceuticals $56.5 Million

Shire Pharmaceuticals LLC to Pay $56.5 Million to Resolve False Claims Act Allegations Relating to Drug Marketing and Promotion Practices

 

 

Pharmaceutical company Shire Pharmaceuticals LLC will pay $56.5 million to settle civil allegations that it violated the False Claims Act as a result of its marketing and promotion of several drugs.Shire, located in Wayne, Pennsylvania, 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.

 

“Patients and health care providers must receive accurate information about available prescription drugs so that they can make safe and informed treatment decisions,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division.  “The Department of Justice will be vigilant to hold accountable pharmaceutical companies that provide misleading information regarding a drug’s safety or efficacy.”

The settlement resolves allegations that, between January 2004 and December 2007, 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 also resolves allegations that, between February 2007 and September 2010, 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. 

Shire also made allegedly unsupported claims that treatment with Vyvanse would prevent car accidents, divorce, arrests and unemployment. 

Finally, the settlement resolves allegations that between January 2006 and June 2010, 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.

"This settlement represents another important step in our fight against fraud in federally-funded healthcare programs such as Medicare and Medicaid,” said U.S. Attorney Zachary T. Fardon for the Northern District of Illinois.  

The allegations resolved by the settlement arose from a lawsuit filed by Dr. Gerardo Torres, a former Shire executive, and a separate lawsuit filed by Anita Hsieh, Kara Harris and Ian Clark, former Shire sales representatives.  The lawsuits were filed under the False Claims Act’s whistleblower provisions, which permit private parties to sue for false claims on behalf of the government and to share in any recovery.  Torres will receive $5.9 million.   

 

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.

 

 

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Whistleblowers-Doing The Right Thing and Being Rewarded!



The U.S. Department of Justice announced settlements with several healthcare companies accused of fraud — including a massive $150 million deal with Amedisys Inc. in which the government resolved seven lawsuits with the giant homecare provider, leading to more than $26 million in payouts to whistleblowers and a jackpot for U.S. taxpayers.

The largest whistleblower reward, more than $15 million, went to April Brown, an Alabama nurse and single mother who was fired by Amedisys after she questioned its Medicare billing practices.
The False Claims Act penalizes fraud against the U.S. government, including programs such as Medicare. Its qui tam provision allows whistleblowers to sue on behalf of the government, and to get up to 30% of recovered funds as a reward.

• In the Amedisys cases, the Justice Department was able to prove the homecare company had misrepresented patients’ conditions in order to inflate Medicare payments — and also had violated the law by paying doctors for referring business to Amedisys. The company denied wrongdoing. Ms.Brown filed the original FCA complaint against Amedisys in 2012, and was followed by six other whistleblowers with similar qui tam claims, who will split about $11 million between them.
• In another case a Florida healthcare provider agreed to pay taxpayers $2.5 million to settle claims that two neurologists in its network misdiagnosed patients with various neurological disorders, including multiple sclerosis, causing Baptist Health to bill government insurance programs for medically unnecessary services. The FCA lawsuit was filed originally by Verchetta Wells, a former Baptist Health employee who will receive $424,155 for her role as a whistleblower in the case, according to the Justice Department.
• In U.S. ex rel. Simmons v. Health Management Associates, Inc., an Oklahoma hospital group agreed to pay more than $1.4 million to settle charges that, among other things, it billed the state’s Medicaid program for unnecessary surgical procedures performed on children — and for other procedures that were never performed. The FCA case was filed originally by Sandra Simmons, a former manager for the group who was fired after raising concerns about the practices; she will receive $159,750 for acting as a whistleblower, the Justice Department said.