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Blowing-the-Whistle-2-3-300x199A U.S. hospital chain, TeamHealth, agreed to settle allegations that a recently acquired subsidiary, IPC, violated the False Claims Act by “up-coding” Medicare and Medicaid for services that were not performed, or were exaggerated. The lawsuit settled by TeamHealth was initiated by Dr. Bijan Oughatiyan, a physician formerly employed by a subsidiary acquired by the company.

False Claims Act (“FCA”) cases often hinge around information gathered from corporate whistleblowers who file lawsuits against their employers who allegedly commit fraud against the government. The Act was passed in response to rampant fraud on President Abraham Lincoln’s Union army. The army, Lincoln’s government, and taxpayers alike were outraged by businesses and “pork-barrel” businessmen that profited greatly from selling American civil war soldiers rotten food, boots with holes in the soles, and guns that could not fire.

The statute is unique amongst civil fraud remedies, as it empowers individuals with “inside” information about fraud on the government to share in any recovery the government may make. These individuals, referred to as “relators” in legalese, and who are often referred to as corporate “whistleblowers” frequently obtain 15-30% of recoveries made because of their FCA lawsuits.

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Stethoscope-2-300x199A midwest healthcare provider agreed to resolve False Claims Act allegations brought by two whistleblowers for $18 million dollars.

The plaintiffs in the qui tam case were former employees of the company. Evercare, now known as Optum Palliative and Hospice Care, is a Minnesota-based provider of hospice care in Arizona, Colorado, and other states across the United States.

The False Claims Act (“FCA”) allows the government to recover damages and penalties of three times those damages. The fraudulent government contractor is also hit with an $11,000 penalty per false claim.  Last November, those penalties per claim will raise to nearly $22,000.

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mmmmeeeeeddddstaaar-300x200MedStar Ambulance Inc., a large Massachusetts ambulance company, will pay $12,700,000 dollars to settle False Claims Act (“FCA”) allegations brought by a corporate “whistleblower.”

The False Claims Act allows individuals with information about fraud on the government to bring suits on behalf of the United States to recover ill-gotten funds from contractors. If an individual’s suit proves successful, the “whistleblower” is generally entitled to 15-30% of the recovered funds. Congress adopted the law in the 19th century to expose fraud among contractors.

The case leading to MedStar’s settlement, filed by Dale Meehan, a former MedStar “Patient Account Representative” working in Worcester, Massachusetts, alleged various fraudulent schemes the company employed to bilk funds from federal healthcare programs.

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shire-300x178This month, the Department of Justice (“DOJ”) announced that Shire Pharmaceuticals will pay $350 million to settle False Claims Act (“FCA”) allegations that Shire and the company it acquired in 2011, Advanced BioHealing (“ABH”), used kickbacks and other prohibited sales methods to compel hospitals, Doctors, and their firms to overuse its product “Dermagraft.”

Shire is a pharmaceutical company headquartered in Ireland. Its United States headquarters are located in Lexington, Massachusetts.

The allegations resolved by the settlement were brought in six lawsuits filed under the qui tam whistleblower provisions of the FCA. Those provisions permit private parties to sue on behalf of U.S. and state governments for false claims.

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detroit-skyl-300x151A Michigan mortgage services company settled a protracted $48 million dollar False Claims Act (“FCA”) lawsuit this week. The U.S. Attorney for the Eastern District of Michigan announced, “the settlement announced today holds United Shore accountable for its endorsement of ineligible loans for FHA mortgage insurance.”

United Shore Financial Services LLC (“USFS”) agreed to pay the U.S. government $48 million to resolve allegations that it violated the FCA by underwriting and originating “bad” mortgage loans that were insured by the U.S. Department of Housing and Urban Development (“HUD”). The loans USFS originated were disproportionality soured by borrowers’ inability to pay, in part, the Government alleged, because of the company’s improper process of approving hundreds of loans that HUD would not normally insure.

The False Claims Act was passed following the American Civil war, after widespread fraud on the Union army frustrated citizens, soldiers, and lawmakers alike. Sometimes dubbed “[President] Lincoln’s Law,” the FCA has become one of the U.S. government’s most effective tools in combating frauds on government-funded programs.

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Scott-Bridge-Townshend-Vermont-300x201A physician practicing in Townshend, Vermont, paid $76,000 to the U.S. government to resolve allegations that she violated the federal False Claims Act (“FCA”) by submitting “false claims” for reimbursement to Medicare for unnecessary and unapproved “pain management” injection procedures.

The False Claims Act, passed in the aftermath of the American Civil War, and signed into law by President Abraham Lincoln, is a legal vehicle for people with knowledge about fraud on the government to recover money on behalf of the United States and to which they are entitled to a portion. If the case proves successful, the FCA plaintiff, called a “relator” or a “whistleblower,” is generally entitled to 15-30% of the recovered money.

In 2015 alone, the U.S. government recovered over $3.6 billion in either settlements or judgments in cases brought under the False Claims Act.

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StethoscopeThe Lexington County Health Services District (“Lexington Medical Center” or “LMC”) located in West Columbia, South Carolina, has agreed to pay $17 million dollars to resolve allegations that it violated the Physician Self-Referral Law (the “Stark Law”) and the False Claims Act (“FCA”) by maintaining improper financial arrangements with 28 physicians.

The FCA is a federal statute that allows whistleblowers, or “relators,” to bring qui tam lawsuits on behalf of the United States government and against their employers who commit fraud against the government.

The action was initiated by Dr. David Hammett, a former physician at Lexington Medical Center. He filed his FCA lawsuit in 2013. FCA suits are filed “under seal,” and the government has 60 days to elect to intervene. If the lawsuit is successful, no matter if the government chose to intervene, and the government recovers money from a fraudulent contractor, the whistleblower who is the source of the information stands to take-home a considerable portion of the government’s recovery.

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A long awaited Supreme Court decision that held major implications for False Claims Act litigants was handed

New-York-City2down this week. On Tuesday, the United States Supreme Court upheld a jury verdict that found State Farm Insurance Company (“State Farm”) defrauded a federal flood insurance program to avoid paying a homeowner’s insurance claim in the wake of Hurricane Katrina.

The False Claims Act (“FCA”) is a law Congress adopted to expose rampant fraud among contractors supplying the Union Army during the American Civil War. Frauds included businesses that sold guns that did not shoot and boots that fell apart after a day’s use. The statute encourages private parties, (“whistleblowers”) or (“relators”), with knowledge of fraud to file suit and collect a share of the government’s recovery.

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Supreme-Court-PillarsGreene LLP secured another win for its clients in the U.S. Court of Appeals for the First Circuit in the firm’s seminal False Claims Act case, U.S. ex rel. Escobar v. Universal Health Services. The First Circuit’s decision will allow Greene LLP’s clients to continue pursuing fraud claims against the healthcare company, Universal Health Services Inc., the largest provider of mental health services to Medicaid programs across the country. Courts and lawyers across the country were tracking the First Circuit’s most recent Escobar ruling, as the decision could have made bringing False Claims Act cases considerably more onerous for whistleblowers from the outset.

In June, Greene LLP secured a favorable and unanimous decision for its clients in the U.S. Supreme Court. The Escobar decision represents the Supreme Court’s willingness to bolster the variety of viable theories of recovery under the statute. The June decision promises to have lasting consequences for a wide variety of whistleblower suits filed under the False Claims Act.

Greene LLP’s clients were prompted to file an FCA suit under Massachusetts’ qui tam provision by the death of their daughter, Yarushka Rivera, a Massachusetts teenager who died from an epileptic seizure after being treated at a mental health facility run by Universal Health Services (“UHS”). Under Massachusetts Medicaid (“MassHealth”) regulations, health care professionals must meet licensing and minimum qualification requirements to provide services reimbursed by the government.

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Shipping-ContainersTwo whistleblowers brought fraud allegations against shippers of military freight and helped the U.S. Government recover $13 million in a False Claims Act settlement announced this month. The case involved a nationwide contract described by Transport Topics Newspaper as “the largest logistics outsourcing in history.”

Richard Ricks, 58, and Marcelo Cuellar, 30, filed a complaint under the federal False Claims Act, alleging that contractors under the Defense Transportation Coordination Initiative (“DTCI”) knowingly inflated charges to the Government for shipping military freight throughout the United States.

The Defense Transportation Coordination Initiative was a massive initiative by the U.S. Department of Defense (“DoD”) to manage distribution of military freight in the continental United States. The purpose of the DTCI was to “increase the operational effectiveness of the U.S. Military and at the same time, obtain efficiencies. The premise is that DoD will increase operational effectiveness… [and] also obtain efficiencies through best business practices such as increased consolidations and mode conversions.” In effect, the DTCI was an attempt to outsource and reduce transportation costs—a fact lost on the fraudulent contractors. In 2015, the program was abandoned because of rampant fraud.