Articles Posted in Health Care Fraud

Stethoscope 2AstraZeneca and Cephalon have both reached settlements with the US Department of Justice (DOJ), totaling $54 million. AstraZeneca has agreed to pay the United States and participating states a total of $46.5 million with interest. Cephalon, which is now owned by Teva, has agreed to pay the United States and participating states a total of $7.5 million. The companies were accused of deliberately underreporting Average Manufacturer Prices (AMPs) to public health programs. The cases were brought by a whistleblower, Ronald J. Streck, under the qui tam provisions of the False Claims Act. Continue reading ›

Toviaz-Off-Label-PromotionIn the largest False Claims Act settlement in which the government did not intervene, DaVita Healthcare Partners has come to an agreement to pay the government $450 million. The false claims lawsuit involved DaVita’s largest division, DaVita Kidney Care. The division was accused of intentionally wasting medicine in order to defraud federal healthcare programs out of millions of dollars. This settlement concludes the false claims act cases that DaVita has defended in the past years, paying out nearly $1 billion to settle the three whistleblower lawsuits. Continue reading ›

Hospital_billingChildren’s National Medical Center Inc. has agreed to pay $12.9 million to settle two allegations of defrauding the government in violation of the False Claims Act. The first claim alleged that Children’s National, which has since changed its name to National Health System, inflated its cost reports which forced the Department of Health and Human Services to increase its reimbursement payments. The second claim alleged that Children’s National over reported the number of beds it had available, causing higher payments from the Virginia and D.C. Medicaid Programs and Medicare. Washington D.C. based Children’s National provides pediatric care throughout the D.C area. The Department of Justice (DOJ) alleged that Children’s National cost the Medicare Trust Fund millions of taxpayer’s dollars. Continue reading ›

Yellow-and-Red-PillsA federal judge in Pennsylvania has allowed the majority of a relator’s False Claims Act case against Cephalon Inc. to proceed, alleging a kickback scheme involving off-label drug marketing. Treanda is a chemotherapy drug that was approved by the U.S. Food and Drug Administration (“FDA”) in October 2008 as a treatment for indolent non-Hodgkins lymphoma (“iNHL”). It was approved as a second-line treatment—the FDA approved it only for patients whose cancer progressed after treatment with another regimen. As early as December 2007, Cephalon allegedly promoted Treanda off-label for front-line, rather than second-line, treatment of iNHL, a use not approved by the FDA. Accordingly, this off-label promotion resulted in the submission of false claims for reimbursement from government health programs. Cephalon also allegedly illegally paid kickbacks to physicians in order to further its off-label promotion scheme, conspired with physicians to further its off-label promotion scheme, violated its obligations to the government under its Corporate Integrity Agreement, and retaliated against relator Matthew Cestra for investigating and reporting his concerns regarding Cephalon’s conduct. Cephalon was subsequently acquired by Teva Pharmaceutical Industries Ltd. in 2011. Continue reading ›

A settlement of $7.5 Stethoscopemillion has been reached between Orbit Medical, Inc., Rehab Medical, Inc. and the US Department of Justice, concluding a five-year lawsuit. This lawsuit was brought under the qui tam provisions of the False Claims Act. Two former employees of Orbit Medical, Dustin Clyde and Tyler Jackson, will receive 20% of the settlement as False Claims Act whistleblowers.

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Toviaz-Off-Label-PromotionDr. Alon Vainer’s discovery of alleged waste at a DaVita clinic has led to a $495 million settlement. DaVita, which specializes in treating patients with kidney problems through dialysis, agreed to settle the False Claims Act suit this month. The complaint alleged that DaVita defrauded the government of hundreds of millions of dollars by intentionally wasting medicine in order to increase reimbursement payments from Medicaid and Medicare. Continue reading ›

Pill-Bottle-Money1-150x150CVS Caremark Corporation (“CVS”) allegedly used $5 discount coupons to attract Medicare and Medicaid beneficiaries to fill prescriptions at its stores in violation of the Anti-Kickback Statute. Relator Richard Carmel is arguing that the coupons do not fall under an exemption that allows providers to offer items of nominal value. According to Carmel, the nominal value safe harbor provision does not apply to this case because the safe harbor is only available under the Civil Monetary Penalty Act. The Anti-Kickback Statute has no such limitations or qualifiers. In addition, the safe harbor provision, which permits nominal incentives of $10 per item or $50 in the annual aggregate, does not apply because the prescription rewards can be added together to exceed the $10 per item threshold and ExtraBucks Rewards are considered to be cash equivalents. Finally, the aggregate value of the ExtraBucks received by Medicare and Medicaid beneficiaries at CVS’s more than 7,000 nationwide stores, far exceeds the $50 per year limit. The Anti-Kickback Statute is a federal criminal statute that prohibits any party from knowingly and willfully offering remuneration to induce someone to purchase a good or service reimbursable under a federal health care program. Violation of the Anti-Kickback Statute predicates liability under the False Claims Act. Continue reading ›

Stethoscope1-300x199Three relators are alleging that AIDS Healthcare Foundation Inc. (“AHF”) violated the federal False Claims Act, the Florida False Claims Act, and the Anti-Kickback Statute through a fraudulent scheme to generate consumer demand for its programs. It was allegedly designed to defraud Medicare, Medicaid, and HIV/AIDS grant programs sponsored by the Health Resources and Services Administration and the Centers for Disease Control and Prevention—two agencies located within the U.S. Department of Health & Human Services. AHF allegedly conducted an organization-wide effort across at least twelve states to enhance funding from the government by paying financial inducements to employees and patients in order to generate referrals to AHF’s various service centers, including clinical services, insurance services, pharmacy services, and testing services. According to the complaint, improper billing in just a single year was estimated to exceed $20 million. AHF is a California corporation headquartered in Los Angeles, California. In addition to Florida and California, AHF conducts operations in at least ten other states. The company describes itself as a global organization providing cutting-edge medicine and advocacy to more than 200,000 patients in 28 countries. AHF is also the largest provider of HIV/AIDS medical care in the U.S. Continue reading ›

Billing1-300x200 2Frontier Home Health and Hospice LLC (“Frontier”) filed a complaint yesterday against Amedisys Holding, L.L.C. and Amedisys, Inc. (collectively, “Amedisys”), alleging that the company lied about its fraudulent billing of Medicare in the sale of a group of Wyoming hospices to Frontier. Frontier allegedly learned after it acquired the business that Amedisys had routinely billed Medicare, contrary to law, for patients who were not eligible for hospice care coverage. Frontier purchased the hospices on an expedited timeline and had to rely on Amedisys’ representations about the company. Upon conducting further review, Froniter allegedly discovered that Amedisys had effectively implemented a bonus system incentivizing employees to keep ineligible patients in hospice care and that half of the Medicare hospice patients it inherited from Amedisys didn’t meet the six-month prognosis requirements for receiving such care. Continue reading ›

Govt-Health-Insurance-Policy-300x200 3Yesterday the Court of Appeals for the First Circuit revived the False Claims Act case against Universal Health Services Inc. (“Universal Health”) filed by two relators that alleges that the company improperly billed the government for mental health services provided by unsupervised and unqualified staff. Universal Health owns and operates Arbour Counseling Services (“Arbour clinic”), a provider of mental-health services in Lawrence, Massachusetts. The Arbour clinic participates in MassHealth, the Medicaid program of the state of Massachusetts, and bills MassHealth for services rendered to individuals insured by the program. United States ex rel. Escobar et al. v. Universal Health Services Inc. was filed in 2011 by the parents of Yarushka Rivera who died in 2009 after suffering seizures allegedly caused by a reaction to the medication she received from unlicensed counselors and nurses at the Arbour clinic. The decision almost entirely reverses the district court’s dismissal of the suit, the Court of Appeals finding that the cost of staff supervision is automatically built into MassHealth reimbursement rates. Continue reading ›

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