Tuesday, January 31, 2006

Kansas considers laws to fight Medicaid fraud

The Kansas state Senate is considering proposals to combat Medicaid fraud.

Senate Majority Leader Derek Schmidt has led the effort to enact legislation that would create the position of state inspector general, who would be charged with finding and investigating fraud; allow the state to seize assets acquired through Medicaid fraud; and set up a civil False Claims Act.

These developments were reported in the January 26, 2006 issue of the Kansas City Star-Ledger.

Whistleblower suit sheds light on medical device industry's payments to doctors

A False Claims Act suit, filed by a whistleblower in the U.S. District Court in Memphis, sheds new light on financial ruses used by medical device companies to pay doctors who use their devices.

The suit alleges that Medtronic, one of the country's largest medical device manufacturers, spent at least $50 million in payments to doctors over a four year period. In one instance, a surgeon was paid $400,000 a year for a consulting contract that required him to work just 8 days.

Critics contend that such arrangements influence medical decisions. The payments are illegal when they are linked to a doctor's use of a particular device and violate the federal ant-kickback laws.

The suit was reported on in the January 24, 2006 issue of the New York Times (restricted access) and reprinted in The Ledger of the same day.

South Korean company settles U.S. False Claims Act suit

Shinwa Electronics of South Korea has agreed to pay $1.2 million in settlement of a whistlebower suit that alleged the company falsified inspection records for fire alarms and safety equipment. The equipment was housed at U.S. bases in South Korea.

The suit was the result of a qui tam action brought by a former Shinwa employee who worked as a fire inspection supervisor.

The suit was filed in U.S. District court in Hawaii and is the first brought under the federal False Claims Act against a foreign company for false billings for work on a foreign military base.

The settlement was reported in the January 31, 2006 issue of the Honolulu Star Bulletin.

Saturday, January 14, 2006

Michigan enacts a false claims act

Michigan has joined a host of other states in enacting a false claims act with a qui tam provision. Qui tam, short for a Latin phrase that translates as "he who brings an action for the king as well as for himself," allows a private citizen who discovers fraud against the government to file a suit against the defrauding company.

The Michigan act, Public Law 337 of 2005, became effective on January 3, 2006 and applies to fraud in the state's Medicare program.

The text of the act is available at the Phillips & Cohen website.