Monday, July 25, 2005

Landmark failure of care case against Pennsylvania hospital settles

The United States Attorney in Philadelphia announced a settlement with Central Montgomery Medical Center in a suit which alleged failure of care violations under the False Claims Act. The government alleged that the hospital violated Medicare conditions of participation by illegally restraining patients and that bills for services rendered to those patients should therefore be considered false claims.

The hospital has agreed to pay $200,000 and to hire a consultant to review the use of restraints at the hospital.

The U.S. Attorney's press release was issued on July 25, 2005.

California hospital pays $3.64 million to settle false Medicare claims case

Simi Valley Hospital paid the federal government $3.64 million to settle charges that it had submitted false Medicare claims from 1993 through 1998. The suit alleged that the hospital "up-coded" pneumonia cases, classifying them as more serious than they actually were, in order to obtain a higher rate of reimbursement.

The hospital agreed to the settlement without admitting liability, according to a report in the July 23, 2005 edition of the Los Angeles Times.

Thursday, July 21, 2005

Florida AG sues 3 drug manufacturers

Florida Attorney General Charlie Crist has filed a lawsuit charging three pharmaceutical maunfacturers with wrongfully inflating prices for prescription drugs. The scheme, which allegedly cost Florida taxpayers $25 million, allowed pharmacies to receive excessive reimbursements for Medicaid prescription drugs.

The companies charged, Mylan Pharmaceuticals, Inc., Teva Pharmaceutical Industries, Ltd., and Watson Pharmaceuticals, Inc., are accused of inflating the average wholesale price reported for state Medicaid programs. A pharmacy would pay the company less for the drugs and profit each time Medicaid reimbursed it, the suits allege.

The lawsuit was prompted by a whistle-blower lawsuit filed by a small Key West pharmacy, according to a press release on the AG's website dated July 20, 2005.

NY attorney general says state needs a false claims act

New York State Attorney General Eliot Spitzer has asked state lawmakers to pass two bills he says are needed to rein in Mediacid fraud.

One is a state version of the federal false claims act, which would increase civil penalties for fraud and encourage whistle-blowers. The other would create a new catagory of health care crimes. Spitzer made his request following a series of New York Times articles which highlighted egregious frauds in the state's Medicaid system.

The proposed state false claims act, like the federal version, allows the state to seek three times the the amount of the fraud and also provides for a reward to whistle-blowers who help uncover the fraud.

The New York Times (subscription required) reported on Spitzer's proposal in its July 21, 2005 issue. Spitzer's website includes a copy of the letter he sent to Senate Majority Leader Bruno and Speaker Silver.

Tuesday, July 12, 2005

PricewaterhouseCoopers will pay $41.9 million for government overbilling

The accounting firm PricewaterhouseCoopers has agreed to pay $41.9 million to settle claims that it overbilled the federal government for travel over 11 years. The suit, originally brought by a whistleblower, alleged that the company failed to pass on rebates it received from airlines, hotels, car rental agencies, and credit card companies.

The Associated Press story was carried in the July 12, 2005 issue of the Washington Post.

Judge rules that False Claims Act doesn't apply to contractors paid with Iraqi oil money, but suit against Custer Battles can proceed

A federal district court judge in Virginia has ruled that the False Claims Act does not apply to contractors who were paid by the coalition authority using Iraqi oil money.

The False Claims Act, widely regarded as the government's most potent weapon against contractor fraud, imposes significant financial penalties on companies who defraud the government. Some whistle-blower lawsuits will be derailed by this ruling but the case against Custer Battles can proceed, the judge held. Custer Battles, a security company, was mainly paid with confiscated Iraqi money that had become United States property.

Custer Battles won more than $100 million in security and logistical contracts in Iraq. It is alleged that the company used shell companies to file phony, inflated invoices, cheating the coalition authority by tens of millions of dollars.

The New York Times (subscription required) reported on the judge's ruling on July 12, 2005.

Wednesday, July 06, 2005

Companies supplied defective body armor, Justice Dept. alleges

The U.S. Dept. of Justice has filed suit against a maker of bulletproof vests and a ballistic fiber supplier. The complaint alleges that Second Chance Body Armor Inc. and its fiber supplier, Toyobo Co., sold body armor to several federal agencies, knowing it was defective. The vests were made with Zylon, a bullet-resistant fiber, and the two companies "kept silent as to the ever-mounting information in their possession that the Zylon fabric degraded substantially faster than expected" when exposed to certain light, temperature and humidity conditions.

The suit was originally brought as a qui tam action under the federal False Claims Act.

The Wall Street Journal (subscription required) reported on developments on July 5, 2005.

Americhoice will pay $1.6 million to resolve False Claims Act allegations

Americhoice of Pennsylvania, a managed care company, has agreed to pay $1.6 million to resolve charges that it violated the False Claims Act by failing to process or pay providers' health claims in a timely fashion or at all and inaccurately reporting claims processing data to Pennsylvania regulators. The government also alleged False Claims Act violations in connection with AmeriChoice's coverage, and failure to cover home health services to qualified beneficiaries.

The company has also entered into a Corporate Integrity Agreement to ensure prompt payment for appropriate claims submissions.

The Philadelphia Office of the U.S. Attorney issued a press release on June 30, 2005.

New Jersey medical school overbilled Medicaid for years

The University of Medicine and Dentistry of New Jersey was warned by its lawyer in 2001 that it had been double billing Medicaid since the mid-1990's. The university billed the health insurance program for its doctors' services to patients and the doctors billed Medicaid for the same services.

The double billing continued for more than three years after the warning.

Federal prosecutors and state insurance regulators are currently examining the university's billing practices. They are also investigating reports that university officials awarded politically connected contractors tens of millions of dollars' worth of jobs, campaign contributions, no-bid contracts and no-strings-attached grants.

The New York Times (subscription required) ran an article on this story in its July 6, 2005 issue.