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College-classroomThe federal government and the state of Florida have filed a civil complaint under the False Claims Act, intervening in a relator’s case against FastTrain College (“FastTrain”). The now defunct Miami-based for profit chain of schools allegedly submitted fraudulent documents to the U.S. Department of Education on behalf of students in order to gain access to federal financial aid programs. The conduct allegedly occurred from at least January 1, 2009 through June 22, 2012 when the schools were closed. Over this period, the school and its students received $4.34 million in student loans and $2.2 million in federal Pell Grants. In October, the school, its owner, and three other employees were charged in a 15-count indictment for conspiring to steal government money. Continue reading

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Doctor-with-ChecklistThe U.S. Department of Justice announced today that North Atlantic Medical Services Inc. (“NAMS”), doing business as Regional Home Care Inc., has agreed to pay $852,378 to settle the allegations of two relators realtor’s that it had violated the federal False Claims Act and the Massachusetts False Claims Act by submitting claims to Medicare and Medicaid for respiratory therapy services provided by unlicensed personnel. From September 2010 through January 2013, NAMS had allegedly used unlicensed employees to set up and provide instructions for sleep apnea masks and oxygen therapy equipment for patients in Massachusetts, even after the state’s Department of Public Health informed the company that the practice was illegal. NAMS is a Massachusetts-based medical device company that provides equipment and services for the treatment of respiratory ailments, such as oxygen deficiency and sleep apnea. Continue reading

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Hospital_billingOn Tuesday, the state of Nevada and the federal government announced that they had elected to intervene in a complaint filed by two relators under the False Claims Act against Creekside Hospice II LLC (“Creekside”) that alleges that it aggressively lured non-terminally ill patients into its care in order to fraudulently seek reimbursement from Medicare and Medicaid since at least 2010. Creekside allegedly paid bonuses to employees who sold its inpatient services to people who did not have the requisite prognoses of six months or less to live and falsified patient medical records accordingly. The hospice received $66.56 million in payments from Medicare between April 2010 and March 2013, and an additional $4.73 million from the Nevada Medicaid program throughout the same period. Creekside’s hospice operations are primarily financed through the receipt of Medicare and Medicaid dollars, with approximately 90% of its revenue is derived from government health care programs. Continue reading

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EarthNew York-based Sevenson Environmental Services Inc. (“Sevenson”), an environmental remediation firm, has agreed to pay $2.7 million to settle allegations of kickbacks, bid-rigging, and rate inflations in connection with its contracts with the Environmental Protection Agency (“EPA”). The alleged violations of the False Claims Act more specifically stem from the prime contractor’s responsibility to clean up of the Federal Creosote Superfund Site in Manville, New Jersey. The EPA is an agency of the federal government created for the purpose of protecting human health and the environment by writing and enforcing regulations based on laws passed by Congress. The agency also conducts environmental assessment, research, and education and is responsible for maintaining and enforcing national environmental standards. The settlement resolves allegations that Sevenson solicited and accepted kickbacks in exchange for the award of subcontracts, that it conspired with the subcontractors to pass the majority of those kickbacks onto the EPA, and that it conspired with one subcontractor to pass onto the EPA additional inflated charges for soil disposal.  Continue reading

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Department-of-Justice-200x300 3The U.S. Department of Justice announced today that it has recovered a record $5.69 billion in settlements and judgments from civil cases involving fraud and false claims against the government during the 2014 fiscal year, ending September 30. Historically, this is the first time the department has exceeded $5 billion in recoveries for cases brought under the False Claims Act, and brings total recoveries over the past five years to $22.75 billion. This total accounts for more than half of all recoveries since Congress amended the False Claims Act 28 years ago in order to strengthen the statute and increase the incentives for whistleblowers to file suit. Most false claims actions are filed under the statute’s qui tam provisions that allow individuals (known as whistleblowers or relators) to file suits on behalf of the government alleging fraud. The number of qui tam suits filed in fiscal year 2014 exceeded 700 for the second year in a row with whistleblowers receiving $435 million in rewards from the $3 billion recovered in cases that they initiated. Continue reading

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Hospital_billingA federal judge in California denied Prime Healthcare Services, Inc.’s (“Prime”) motion to dismiss a relator’s False Claims Act case alleging that the hospital group overcharged Medicare and Medicaid by more than $50 million. Prime was founded in 2001 by Dr. Prem Reddy. Thereafter, Prime engaged in a strategy of acquiring hospitals in financial distress and transforming them into financially stable businesses. Prime claims to have “saved” 29 hospitals. It operates 14 hospitals throughout California. In order to achieve some of these successes, Prime allegedly required hospital personnel to charge government health care programs the highest possible rates for patient admissions by falsely including comorbidities and complications including encephalopathy, septicemia, and malnutrition. Additionally, Prime allegedly eliminated less costly observation stays and refused to discharge patients to post-acute care centers in order to fraudulently increase its payments. Continue reading

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Natural-GasThe state of California has decided to intervene in a relator’s complaint filed under the state’s False Claims Act alleging that London-based BP plc (“BP”) and its subsidiaries defrauded taxpayers by inflating natural gas prices under their contractual arrangements as the exclusive supplier to the state of California and its subdivisions. The complaint was unsealed on Wednesday. BP is one of the world’s largest energy companies and it is the largest supplier of natural gas in North America. It had contracts with California’s Department of General Services (“DGS”) under the Natural Gas Services (“NGS”) program. Between 2004 and 2012, BP and its subsidiaries allegedly charged California many times more than what its non-governmental customers were charged. The fraudulent overcharges are claimed to have amounted to between $150 million and $300 million of the $2 billion in natural gas supplied to the program during the period in question. Continue reading

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Govt-Health-Insurance-Policy 3The U.S. Department of Justice announced today that CareAll Management LLC and its affiliated entities (“CareAll”) have agreed to pay $25 million, plus interest, to the United States and the state of Tennessee to settle a relator’s allegations that the home health provider violated the False Claims Act by submitting fraudulent and upcoded home health care billings to the Medicare and Medicaid programs. The settlement resolves conduct that allegedly occurred between 2006 and 2013 where CareAll overstated the severity of its patients’ conditions in order to increase the billing of, and in turn the reimbursement for, services that were not medically necessary and were rendered to patients who were not in fact homebound. The company had allegedly predetermined its desired profit margins and billed government health care programs accordingly to hit those targets. The wrongdoing was claimed to have permeated all branches of the CareAll system throughout Tennessee. Continue reading

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WhistleOn Friday, the United States Attorney for the Western District of Oklahoma and the Attorney General for the State of Oklahoma jointly announced that Ocean Dental, P.C. has agreed to pay $5 million to settle civil claims stemming from allegations that it violated the False Claims Act by submitting fraudulent Medicaid claims. Oklahoma-based Ocean Dental operates 28 clinics in seven states. As part of its practice, it provides dental services to patients, including children, covered by the Oklahoma’s Medicaid program. The federal government and the state of Oklahoma specifically alleged that Ocean Dental submitted false claims for payment to the Oklahoma Medicaid program for dental restorations that took place during the period from January 1, 2005 through September 30, 2010. Claims for dental restorations furnished to Medicaid beneficiaries by Ocean Dental’s then-employee Robin Lockwood, D.D.S., were false because they were either not performed, or upcoded by billing for more restored surfaces than were actually performed. Continue reading

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florida-medical-license1The U.S. Department of Justice announced yesterday that Jacksonville-based North Florida Shipyards and its president will pay the federal government $1 million to resolve a relator’s allegations that they violated the False Claims Act by creating a fraudulent company in order to win contracts from the U.S. Coast Guard intended for Service Disabled Veteran Owned Small Businesses (“SDVOSB”). In order to qualify as a SDVOSB on Coast Guard ship repair contracts, a company must be owned and managed by service disabled veterans, and must perform a majority of the labor. Ind-Mar Services Inc. (“Ind-Mar”), however, was allegedly set up to serve as a sham contracting vehicle. The company allegedly had no employees or facilities and North Florida Shipyards actually performed all of the work and received all of the profits under the awarded contracts. As a result of the scheme, Ind-Mar was falsely awarded contracts to repair five ships between 2010 and 2013. Continue reading