Friday, February 20, 2015

Whistleblower and fraud news summary for week of February 16

Compassionate Care Hospice of New York will pay the government $6 million to settle allegations that the for-profit hospice submitted false claims to Medicare and Medicaid programs for services that were never provided. (A.G. Schneiderman Announces $6 Million Settlement with Bronx For-Profit Hospice Provider Following Joint Investigation with U.S. Attorney Bharara)

The owner of Longcare Home Health, a Miami home health care company, pleaded guilty to a $13 million Medicare fraud scheme that involved paying kickbacks and bribes to Medicare beneficiaries, doctors' offices and medical clinics in exchange for patient referrals. (Owner of Miami Home Health Company Pleads Guilty for Lead Role in $13 Million Medicare Fraud Scheme)

The Wall Street Journal did an excellent analysis this week of the timing of discharges of Medicare patients at long-term care facilities, which affects Medicare and Medicaid payments. Phillips & Cohen is representing a whistleblower in a qui tam case against Select Medical that alleges the company manipulated the length of stay for Medicare and Medicaid patients in its long-term, acute-care hospitals as a way to increase the hospitals’ revenues from government healthcare programs. (Hospital Discharges Rise at Lucrative Times)

Friday, February 06, 2015

Whistleblower and fraud news summary for week of February 2

Community Health Systems has agreed to pay the government $75 million to resolve a whistleblower lawsuit brought by Phillips & Cohen client Robert Baker. CHS allegedly donated funds to counties in New Mexico as a way to improperly increase federal payments under a program set up to cover treatment costs for indigent patients. (Whistleblower played key role in case that Community Health Systems hospitals settle for $75 million)

Minnesota-based ev3, a subsidiary of Medtronic, will pay the government $1.25 million to resolve a Phillips & Cohen whistleblower lawsuit that alleged that ev3 advised hospitals to bill Medicare for an outpatient procedure as a more expensive inpatient procedure to encourage use of ev3's products. The whistleblower, Amanda Cashi, was awarded 20 percent of the total settlement. (Medtronic subsidiary ev3 pays $1.25 million to settle Medicare billing fraud case)

In a separate case, Medtronic Inc. has agreed to pay the government $2.8 million to resolve allegations that the medical device company violated the False Claims Act by submitting bills to Medicare for a procedure known as "SubQ stimulation" that was not reimbursable. (Medtronic Inc. to Pay $2.8 Million to Resolve False Claims Act Allegations Related to "SubQ Stimulation" Procedures)

Maryland Attorney General Brian Frosh has said it is his top priority to win passage of state legislation that will encourage whistleblowers to report fraud by private government contractors. The proposed legislation would broaden coverage of the Maryland False Claims Act beyond Medicaid and healthcare-related fraud to include any type of fraud against the government. Whistleblowers who file “qui tam” lawsuits would receive 15 to 25 percent of the amount recovered as a reward. (Attorney General Frosh Urges New Tool to Crack Down on Fraud)

Friday, January 30, 2015

Whistleblower and fraud news summary for week of January 26

Teachers and students in the Fresno Unified school district in California are seeing the benefits of a whistleblower lawsuit brought by Phillips & Cohen LLP against Office Depot for overcharging on school supplies. The school district will receive $550,000 out of the total $68 million settlement and will disperse the funds to teachers so they can buy classroom supplies. Teachers often pay out of their own pocket to stock their classrooms. (Fresno Unified recoups $550,000 after statewide Office Depot settlement)

A Kansas City, Missouri, chiropractor was sentenced to 15 months in prison for his role in a $3 million Medicare fraud scheme. Michael Kelley Miller pleaded guilty for billing Medicare for nerve block injections that were not medically necessary. (Former Waldo Chiropractor Sentenced for $3 Million Medicare Fraud)

The former Chief Operating Officer of the Hollywood Pavilion psychiatric hospital, located in Florida, was sentenced to 6 years in prison and ordered to pay $39.3 million in restitution for his role in a $67 million healthcare fraud scheme. Christopher Gabel admitted to submitting false claims to Medicare for treatment that was not medically necessary and admitted to paying and receiving bribes and kickbacks to patient brokers to falsify invoices. (Hospital executive gets prison for health care fraud)

The Centers for Medicare and Medicaid Services is developing a new pilot program that will determine how many Medicare fraud cases are occurring in home health care settings. Medicare has paid almost $1 billion in improper payments in home health expenditures since 2010. (CMS plans pilot to better estimate home health agency fraud)

The New York Times examines the controversy over the medical necessity of treatments to relieve blockages in the arms and legs. The Justice Department joined two “qui tam” lawsuits earlier this month involving that issue. (Medicare Payments Surge for Stents to Unblock Blood Vessels in Limbs)

Friday, January 16, 2015

Whistleblower and fraud news summary for week of January 12

Office Depot has agreed to pay more than 1,000 government entities in California $68.5 million to resolve a whistleblower lawsuit that alleged that Office Depot overcharged them for office supplies. The whistleblower, David Sherwin, represented by lead counsel Phillips & Cohen, spent years pursuing the case and died last year of cancer. (Whistleblower's efforts help thousands of California cities and schools recover $68.5 million from Office Depot)

A Michigan physician has been sentenced to 15 months in prison and $1.3 million in restitution for her role in a $2.1 million Medicare fraud scheme. Dr. Paula Williamson conspired to commit healthcare fraud by referring Medicare beneficiaries for home health care services that weren't medically necessary. (Redford Twp. doctor sent to prison for Medicare fraud)

Two Houston-area mental health clinic owners were sentenced to 148 and 120 months in prison, respectively, for paying and receiving kickbacks in a Medicare fraud scheme. The clinics billed Medicare for services that weren’t medically necessary or weren’t provided totaling $97 million, according to evidence at trial.(Physician owners of mental health clinic sentenced to $97 million Medicare fraud scheme)

Friday, January 09, 2015

Whistleblower and fraud news summary for week of January 5

Daiichi Sankyo Inc. has agreed to pay the government $39 million to settle allegations raised in several whistleblower (“qui tam”) lawsuits that the international pharmaceutical company paid kickbacks to doctors to induce them to prescribe Daiichi drugs including high blood pressure medications Azor, Benicar and Tribenzor, and the cholesterol drug Welchol. (Daiichi Sankyo Inc. Agrees to Pay $39 Million to Settle Kickback Allegations Under False Claims Act)

Easton Hospital, based in Pennsylvania, will pay the government $662,000 to resolve whistleblower allegations that the hospital violated the False Claims Act by performing procedures that were medically unnecessary or never performed. (Easton Hospital Agrees to $662K Settlement of False Claims Act Allegations)

A North Text chiropractor was sentenced to 12 years in prison and ordered to pay $2.4 million in restitution for his role in a healthcare fraud scheme. Dr. Abbas Zahedi was convicted of five counts of healthcare fraud for submitting health insurance claims to insurers for services that were never provided. Five other defendants in the case also were convicted and sentenced.  (Chiropractor Sentenced in Health Care Fraud Case)

Wednesday, December 24, 2014

Whistleblower and fraud news summary for week of December 15

Eyak Technology LLC and Eyak Services LLC have agreed to pay the government $2.5 million and relinquish rights to any additional payments from the U.S. to resolve allegations that the technology contractors submitted false claims. The subsidiaries of Eyak Corporation held a $1 billion contract with the U.S. Army Corps of Engineers during the alleged fraud which included accepting kickbacks and submitting invoices for work that was never performed. (Federal Contractors Eyak Technology LLC and Eyak Services LLC Resolve False Claims Act and Anti-Kickback Act Allegations)

Bruker Corp, based in Massachusetts, agreed to pay the government $2.4 million to settle charges that the life sciences company violated the Foreign Corrupt Practices Act by bribing Chinese officials to gain business. (SEC Charges Massachusetts-Based Scientific Instruments Manufacturer with FCPA Violations)

The Securities Docket held a webcast on Dec. 18 titled “Navigating the Minefield of Dodd-Frank’s Whistleblower Provisions and the FCPA (2014 Update)” that examined Dodd-Frank cases and the SEC whistleblower reward program. Erika Kelton, a partner at Phillips & Cohen, provided the whistleblower perspective and talked about the anti-retaliation efforts of the SEC. Ms. Kelton “noted that virtually all of the calls that her firm gets from whistle-blowers seeking representation are from employees who reporter their complains internally.” (Companies Risk SEC’s Wrath by Discouraging Whistle-blowers)

Wednesday, November 26, 2014

Whistleblower and fraud news summary for week of November 24

A New York-based doctor has agreed to pay the government $2.35 million to resolve claims that he falsely billed Medicare. Dr. Gilbert Lederman allegedly miscoded experimental cancer treatments to receive reimbursements from Medicare even though the program did not cover the treatment. Staten Island University Hospital, the hospital where Lederman performed the cancer treatments, previously paid the government $74 million to settle related civil charges. (NYC Doctor Known for Radio Ads Settles Medicare Fraud Case)

A Detroit-based surgeon, Dr. Aria Sabit, has been charged for allegedly billing millions to Medicare for spinal surgeries that were unnecessary or never performed. (Bloomfield Hills Surgeon Charged in Health Care Fraud)

A Boeing subcontractor has been sentenced to 15 months in prison and must pay a $50,000 fine for his involvement in a bribery and kickback scheme. Jeffrey Lavelle, owner and operator of J.L. Manufacturing, paid Boeing officials for information on non-public financial and bid information that led to Lavelle’s company obtaining almost $2 million in subcontracts. (Boeing Subcontractor Gets 15 Months in Kickback Case)

Three New York pharmacies and seven individuals have been indicted for their role in a $5 million Medicaid fraud scheme.  The pharmacies allegedly were paying customers for prescriptions that were then billed to Medicaid but were never filled. (A.G. Schneiderman Announces Indictment of Three Brooklyn Pharmacies, Pharmacy Owners, and Pharmacists for Alleged $5 Million Medicaid Fraud)

Friday, November 21, 2014

SEC whistleblower program continues to grow

The Securities and Exchange Commission received a record number of tips under its whistleblower-reward program in fiscal year 2014, with more than 3,600 tips from all 50 states, Washington, DC and Puerto Rico, and 60 foreign countries.

The SEC released its annual whistleblower report about the Dodd-Frank program this week, which discussed the substantial progress being made in several areas.

The SEC awarded its largest ever award, $30 million, to a whistleblower this year.  The whistleblower, represented by Phillips & Cohen, helped uncover fraud that would not have been detected without insider knowledge. In 2013, Phillips & Cohen partner Erika Kelton predicted in a Forbes.com article that the SEC whistleblower program would pick-up steam, receiving more tips and producing more awards – which the SEC report proves has happened.

Another highlight in FY2014 was the SEC’s decision to exercise its anti-retaliation authority for the first time. The SEC charged Paradigm Capital Management for retaliating against an employee who reported wrongdoing to the SEC, settling with the hedge fund advisory firm for $2.2 million. 

Whistleblower and fraud news summary for week of November 17

Sevenson Environmental Services, based in Niagara Falls, New York, agreed to pay the government $2.72 million to resolve allegations that the environmental remediation company violated the False Claims Act by accepting kickbacks in return for awarding subcontracts for work on government sites. (Sevenson Environmental Services Inc. Agrees to Pay $2.72 Million to Settle Claims of Alleged Bid-Rigging and Kickbacks)

A Miami-based chief operating officer of a psychiatric hospital pleaded guilty for his role in a $67 million Medicare fraud scheme. Christopher Gabel pleaded guilty to one count of conspiracy to commit health care fraud and one count of conspiracy to defraud the government by receiving kickbacks. (Miami-Area Hospital Chief Operating Officer Pleads Guilty in $67 Million Mental Health Care Fraud Scheme)

Washington Gas Energy Systems will pay the government $2.5 million in fines and penalties for conspiring to commit fraud against the government. The Virginia-based energy company allegedly illegally acquired contracts meant for small, disadvantaged businesses. (Washington Gas Energy Systems to Pay $2.5 Million in Fines and Penalties for Conspiring to Obtain Federal Contracts)

Whistleblower cases help government recover almost $3 billion in FY2014

The Department of Justice recovered a record-breaking $5.69 billion under the False Claims Act for the fiscal year 2014, says a DOJ statement released Thursday.

Qui tam (whistleblower) lawsuits accounted for almost $3 billion of the total, with whistleblowers receiving $435 million in rewards.

"We acknowledge the men and women who have come forward to blow the whistle on those who would commit fraud on our government programs," said Acting Assistant Attorney General Joyce Branda.

As has been the case in other recent years, the pharma industry accounted for a substantial share of the recoveries. Global health care giant Johnson & Johnson and its subsidiaries, Janssen Pharmaceuticals and Scios (J&J), paid a total of $2.2 billion to resolve False Claims Act claims and other charges relating to the off-label marketing of prescription drugs and kickbacks to physicians and nursing homes.

Recoveries under the False Claims Act now total more than $45 billion, including more than $30 billion from qui tam cases alone.