Articles Posted in Health Care Fraud

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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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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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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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Doctor-with-Checklist-150x150United States Attorney Beth Drake announced that the U.S. Attorney’s Office for the District of South Carolina has settled claims of health care fraud with Drayer Physical Therapy Institute, LLC (“Drayer”) for $7.1 million dollars.  Drayer has physical therapy centers in South Carolina and 14 other states from Pennsylvania to Oklahoma.

Former employees alleged that Drayer submitted claims to Medicare and Federal Employee Health Programs for services provided to multiple patients simultaneously, and “up-charged” the programs as though the services were being provided by a physical therapist to one patient at a time.

The investigation into Drayer’s questionable billing practices began because whistleblowers filed a qui tam law suit under the False Claims Act. The suit was filed by former Drayer physical therapists.

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Whistle-300x225The U.S. Department of Justice announced a False Claims Act (“FCA”) settlement this week with Alpharetta, Georgia-based anesthesiology provider “Sweet Dreams Nurse Anesthesiology” for $1.1 million dollars.

The company has agreed to pay the government to resolve allegations that it submitted false claims to Medicare and Georgia’s state-run healthcare program.

Medicare and like state programs pay only for services that are “reasonable and necessary for the diagnosis or treatment of illness or injury.” In submitting claims to Medicare for reimbursement, healthcare providers “certify” that they have complied with relevant and “material” regulations governing the services they provide.

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Govt-Health-Insurance-PolicyOnce a start-up, now a Johnson & Johnson subsidiary, Acclarent Medical will pay $18 million to settle a False Claims Act (“FCA”) suit that alleged its medical sales division promoted its devices to physicians for “off-label” uses and provided those physicians “kick-backs” in exchange for their business. Acclarent Medical describes itself as a medical device company “dedicated to the development of innovative devices providing new technologies to meet the needs of ENT patients.” The company is based in Menlo Park, California and markets products throughout the United States.

The False Claims Act is a federal statute that allows “whistleblowers” to bring lawsuits against government contractors who fraudulently overbill the government for goods or services.

False Claims Act lawsuits are brought under seal, and the Department of Justice has the opportunity to intervene and prosecute the action on behalf of the whistleblower if it so chooses. If the suit is successful, and funds are recovered for the government, regardless of the if the government decides to intervene, the whistleblower receives a substantial portion of the government’s recovery.

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Stethoscope-300x199 2Martin E. Cutler, M.D., an ophthalmologist with offices in Woburn and Gloucester, Massachusetts, has agreed to pay $55,000 to resolve allegations that his company submitted false claims to Medicare.  Medicare pays only for services that are “reasonable and necessary for the diagnosis or treatment of illness or injury.” The program covers specific eye procedures only when they are medically necessary.

Since ophthalmologists are physicians under Massachusetts law, and are regulated by the Massachusetts Board of Registration in Medicine, Cutler is regulated as a physician under the Medicare reimbursement rules.

Brian Sachs, a Boston-based medical consultant, “blew the whistle” on his former client and filed his qui tam False Claims Act lawsuit in Federal District Court in 2013.

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Stethoscope1-150x150Travis Thams, the whistleblower who filed a False Claims Act (“FCA”) lawsuit on behalf of the United States and 28 states, stands to receive a substantial portion of the $8 million settlement reached with his employer, Cardiovascular Systems, Inc. (“CSI”).

Thams was recruited to CSI to act as a District Sales Manager. He was responsible for selling the entire portfolio of CSI products.

CSI manufactures devices to treat peripheral artery disease (“PAD”). The devices in question are electrically driven and use a diamond-coated “crown” to sand away hard plaque within the arteries. As the crown “spins” at between 60,000 to 120,000 revolutions per minute within the artery, the plaque is effectively “sanded” away, and it restores blood flow.

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A teenager who died after receiving mental healthcare services from unlicensed and underqualified professionals is the impetus behind a False Claims Act lawsuit handled by Greene, LLP on behalf of the late Yarushka Rivera. The case is now before the U.S. Supreme Court. The United States Office of the Solicitor General and the Department of Justice argued before the Supreme Court on April 19, 2016 with assistance from Greene, LLP.

Yarushka Rivera was a teenage enrollee of MassHealth benefits (Massachusetts’s state equivalent of Medicare) and began seeing Arbour counselor Maria Pereyra in 2007 after experiencing various behavioral problems at school. Pereyra, an Arbour staff member, lacked a professional license to provide mental-health therapy. Rivera’s parents met with Pereyra’s supervisor, clinical director Edward Keohan, after Yarushka complained that she was not benefiting from counseling. During the meeting, they became worried that Keohan was not properly supervising Pereyra and was unfamiliar with Yarushka’s treatment.

Yarushka was eventually transferred to another staff member, Diana Casado, who was also supervised by Keohan. Casado too, was unlicensed. Yarushka’s parents quickly became dissatisfied with her treatment and believed that Casado too, was not properly supervised.