Thursday, June 30, 2005

Office products company will pay U.S. government $9 million to settle allegations of overcharging

Humanscale Corporation (formerly Softview Computer Products) will pay the United States $9 million to resolve allegations that the company failed to disclose all discount and pricing information to government contract negotiators and failed to comply with price reduction clauses in its contracts.

The company provided furniture and office products to the federal government.

The whistle-blower who brought the suit under the qui tam provisions of the False Claims Act will receive nearly $1.6 million for his contributuion to the case.

The June 30, 2005 Dept. of Justice press release is available at their website.

Whistle-blower lawsuits accuse Caremark of Medicaid fraud

Caremark, Inc. a pharmacy benefits manager, is facing two whistle-blower lawsuits alleging fraudulent practices.

One filed in U.S. District Court in San Antonio alleges Caremark billed Medicaid for prescription drugs when there was coverage under a Caremark private benefit plan. Medicaid is supposed to be the payer of last resort.

The other suit, filed in a California state court, alleges fraudulent practices including restocking and reselling returned prescriptions.

The San Antonio Express News reported on these developments on June 29, 2005.

U.S. auditors say Medicaid overpays for drugs

Reports issued by the Inspector General for the Dept. of Health and Human Services contend that Medicaid is overpaying for drugs by hundreds of millions or even billions of dollars a year. The health insurance plan for low-income and disabled people incorporates pricing formulas intended to keep the costs of prescription drugs in check, but they've often had the opposite effect.

The reports are available at the IG's website.

A news report on the IG's findings appeared in the June 29, 2005 edition of the Los Angeles Times (subscription required).

Federal government does too little to stop Medicaid fraud

The director of health care for the Government Accountability office told a Senate committee that the Centers for Medicare and Medicaid Services puts too little emphasis on helping states prevent waste and fraud. Leslie Aronovitz said that CMS needed a more strategic approach.

Another witness was James Moorman of Taxpayers against Fraud. He said lawsuits filed by whistle-blowers are an important weapon in fighting Medicaid fraud. Whistle-blowers are eligible to receive between 15 percent and 30 percent of the federal government's recoveries in such lawsuits.

The hearings by the Senate Finance Committee were titled Medicaid Waste, Fraud and Abuse: Threatening the Health Care Safety Net. The transcripts of the witnesses' statements are available at the committee's website.

An Associated Press story on the hearings ran in the June 28, 2005 edition of the San Francisco Chronicle.

Thursday, June 23, 2005

Medical college settles research grant fraud allegations

Weill Medical College of Cornell University will pay $4.4 million to settle allegations of research grant fraud. The government alleged that Weill violated the False Claims Act by improperly reporting and accounting for spending on grants from the National Institutes of Health. The suit charged that Weill violated the so-called "33% rule," which prohibits any one researcher from garnering more than a third of an NIH grant, allowing "one researcher to . . . in effect dominate the research at the (PGCRC) at the expense of the government."

The suit was brought under the qui tam provisions of the False Claims Act, which allows a private party who discovers fraud to sue on behalf of the government.

Newsday reported on the story on June 21, 2005.

Monday, June 20, 2005

Massachusetts cardiologist charged with Medicare fraud

Dr. Philip A. Chiotellis of Cape Cod, Massachusetts, has been charged by the U.S. Attorney in Boston with billing Medicare for thousands of cardiovascular stress tests rather than the cardiac rehabilitation services he provided between 1995 and 2001. The reimbursement rates for cardiovascular stress tests are significantly higher than rates for cardiac rehabilitation services.

If Chiotellis is found guilty, he could face fines in excess of $5 million.

The Cape Cod Times reported on developments on June 18, 2005.

Whistleblower lawsuit alleges overcharging for airport work

A qui tam lawsuit claims that the company responsible for managing paving and constriction contracts for John Wayne Airport received bribes and kickbacks for steering work to a company that inflated its bills by $1.5 million.

The suit, filed under the provisions of the False Claims Act which allow private persons who discover fraud to bring civil suits on behalf of the government, says that JTHM & Associates were responsible for awarding contracts at the airport and awarded contracts to Sequel Contractors, Inc. in return for bribes.

The Los Angeles Times (subscription required) reported on the suit on June 17, 2005.

Thursday, June 09, 2005

Military aircraft parts maker indicted for falsely certifying equipment

Anco-Tech, a manufacturer of titanium tubing for military aircraft that has gone out of business, was indicted for certifying equipment sold to Boeing and Bell Helicopter from 1995 to 2002. Boeing and Bell used Anco-Tech titanium tubing in civilian aircraft and in the V-22 Ospreys used by the military.

The V-22 is a $72 million aircraft that takes off like a helicopter and flies like a plane. Two Ospreys crashed in 2000, killing 23 marines.

A June 8, 2005 article in the New York Times reported on the indictment.

Tuesday, June 07, 2005

Government investigations of drug pricing expand

The Wall Street Journal reported on June 7, 2005 that state and federal prosecutors are investigating 150 cases involving alleged drug pricing fraud.

The article claims that the investigations could result in more than $1 billion in criminal fines and civil penalties this year.

The focus is on allegations that drug companies inflate prices, offer undisclosed rebates to distributors, and market drugs for unapproved uses. Prescription drugs constitute a significant portion of the nation's health care expenditures and changes in Medicare will result in the federal government assuming a larger share of that cost.

The Wall Street Journal article is available to subscribers.

Thursday, June 02, 2005

Whistleblower suit accuses shipyards of failing to ensure safety of submarine parts

A False Claims Act suit filed by two whistleblowers claims that Northrop Grumman Newport News and General Dynamics Electric Boat failed in their duty to ensure the safety of key parts on their submarines.

The suit contends that the shipyards, builders of nuclear-powered submarines for the U.S. Navy, should have discovered ongoing problems with valves supplied by Hunt Valve. Their failure to ensure the quality and safety of the valves defrauded the government.

The federal government has declined intervention in the case, which was the subject of an article in the June 2, 2005 edition of the Daily Press.