Tuesday, February 15, 2005

Uniform supplier investigated for overcharging government agencies

Cintas Corp., an Ohio-based uniform supplier, is being investigated to determine whether the company has been overcharging government agencies. The Justice Dept. has asked a judge to order Cintas to turn over documents that were subpoenaed by the Postal Service's Inspector general a year ago.

The Postal Service issued the subpoena as part of a probe into whether Cintas violated the False Claims Act by adding randomly calculated additional charges to invoices sent to federal agencies. Cintas is the largest seller of uniforms in the country.

The Cincinnati Post ran a story on the investigation on February 15, 2005.

Florida International University will pay $11.5 million to settle allegations of overbilling Dept. of Energy

Florida International University has agreed to pay $11.5 million in settlement of allegations of mischarging and overbilling the U.S. Dept. of Energy under several contract and grants. The contracts and grants dealt with the testing and development of environmental technologies.

The Dept. of Justice issued a press release on February 15, 2005

Monday, February 14, 2005

Florida hospital pays $2.75 million to resolve Medicare fraud charges

Cleveland Clinic Florida Hospital has paid the United States $2.75 million to settle allegations the hospital billed Medicare for observation services for patients who did not qualify for the reimbursement. In particular, the settlement resolved allegations Cleveland Clinic frequently billed Medicare for extra observation charges during normal recovery periods following minor surgery or emergency room visits.

The suit was the result of a qui tam whistleblower complaint filed by a former employee under the False Claims Act. The whistleblower will receive approximately $500,000 for his role in the case.

The South Florida Business Journal ran a February 14, 2005 story on the settlement.

Novartis subsidiary to pay $49.1 million to settle Medicare anti-kickback charges

OPI Properties, a subsidiary of the Swiss pharmaceutical company Novartis, pleaded guilty to attempting to elude or impede federal audits.

The settlement was the result of an investigation into the feeding tube industry. The company's sales practices, which included giving free equipment to potential clients, violated the anti-kickback rules.

The St. Louis Post-Dispatch had a February 11, 2005 article on the settlement.

Fresno County settles Medicare fraud claim

Fresno County will pay the federal government an additional $376,000 to settle a case involving false Medicare claims made in the 1990s. This brings the total to $652,937.

Fresno County and the Fresno County Human Services System were accused of defrauding the Medicare program by submitting false claims for services. Two psychiatrists who had been employed by the county brought a False Claims Act suit under the qui tam provisions of the Act, which allows whistleblowers to sue on behalf of the government.

The Associated Press reported on the settlement on February 9, 2005.

Settlement reached in gene therapy case

The U.S. Dept. of Justice announced that it had settled False Claims Act suits related to a gene therapy experiment that resulted in the death of an Arizona teenager.

The University of Pennsylvania, Children's Medical Center and several individuals allegedly misled the government on the benefits of the treatment. The institutions will pay $1 million in settlement and the doctors involved face sanctions.

Jesse Gelsinger was the first person known to have died as a direct result of gene therapy.

The Washington Post reported on the settlement on February 10, 2005.

Tuesday, February 08, 2005

Illinois Attorney General charges drug companies fraudulently inflated drug prices

The Illinois Attorney General has filed suit against 48 drug companies, alleging that they published fraudulently inflated prices for prescription drugs, resulting in overpayments by Medicare and Medicaid.

Illinois joins approximately 19 other states who have filed similar actions against drug companies.

The February 8, 2005 press release is available at the attorney general's website.

Massachusetts orthopedic footware providers will pay $526,000 to settle False Claims Act allegations

The Massachusetts Attorney General has announced that 15 companies that supply orthopedic footware to Medicaid recipients have agreed to pay $526,000 to settle overpayment allegations.
The suit, brought under the Massachusetts False Claims Act, contended that the providers double-billed, billed excessive amounts and failed to keep adequate records.

The attorney general's February 7, 2005 press release has details of the settlement.

Monday, February 07, 2005

Defense contractor settles claims it defrauded government by supplying used parts

Aerometals, a California defense contractor, will pay the federal government $251,000 to resolve charges it defrauded the Air Force and Army by supplying used and reconditioned parts that it said were new.

The aircraft parts company had been acquitted of criminal charges in a 2003 jury trial.

The whistleblower who brought the suit under the False Claims Act will receive $36,000 as his share of the settlement.

The Sacramento Business Journal ran a February 4, 2005 story on the settlement.

Attorney pays $1.24 million to settle overbilling allegations

Timothy C. Spayne, a solo practitioner in Connecticut, has paid the federal government $1.24 million to settle allegations that he billed U.S. Navy contractor Electric Boat for up to 94 hours in a single day for representing employees in workers' compensation cases. The False Claims Act suit alleged that, between January 1999 and June 2001, Spayne was paid nearly $3.3 million by the U.S. Navy through its contracts with Electric Boat, much of it due to allegedly gross overbilling.

There were numerous instances where Spayne billed for more than 24 hours of work in a single day. In one case he billed for nearly 95 hours in a 24 hour period.

The settlement was reported in the February 7 issue of the Connecticut Law Tribune.

Jury selection begins in General Motors False Claims Act case

Former employees claim General Motors Corp. and two other U.S. government contractors sold faulty generators to the Navy. The qui tam suit seeks $100 million in damages, which could be tripled under the provisions of the False Claims Act.

The suit alleges that generators made by General Tool Co., Allison Engine Co. and Southern Ohio Fabricators didn't meet U.S. specifications. and that the companies falsified documents and failed to do inspections.

The Detroit Free Press ran an article on the suit on February 1, 2005.

Government contractor accused of inflating labor estimates

SAIC, a research and engineering firm, is the subject of an Air Force "alert," arising from allegations in a False Claims Act suit against the company.

A qui tam whistleblower suit brought by a former employee alleges that SAIC inflated its labor estimates to compensate for internal inefficiencies, inoperable equipment and anticipated schedule delays. In response, the Air Force is requiring contracting officials to demand backup data revealing the details of how SAIC compensates for the business risks of performing fixed-price contracts.

U.S. Newswire reported on these developments on February 1, 2005.