Wednesday, May 31, 2006

False Claims Act suit in higher education

Insider Higher Ed published an article on May 26, 2006 on a suit filed against Chapman University, alleging that school officials lied to an accrediting body. The relators in the suit, brought under the qui tam provisions of the False Claims Act, are three former adjunct professors at the school. They claim that, among other violations, instructors at Chapman regularly shortchanged students by providing fewer in-class hours than are required by the Western Association of Schools and Colleges, the regional accrediting agency that oversees California, and that the university had purposely and fraudulently failed to give students in its marriage and family therapy program as many hours of clinical training as California’s certification program for such therapists requires.

Chapman University attempted to have the suit dismissed but Judge James V. Selna of the United States District Court for the Central District of California has allowed the majority of the claims to go forward.

Tuesday, May 23, 2006

Harlem Hospital settles Medicare double-billing case

Harlem Hospital will pay $2.3 million to settle civil charges that it double-billed Medicare from January 1992 through June 2001 for the same outpatient services. The hospital, part of the city's Health and Hospitals Corp., was allegedly notified by its medical claims processor that it was consistently double billing Medicare, but did not stop the practice.

The complaint and settlement were both filed Wednesday in the U.S. District Court in Manhattan. New York Business reported on the settlement on May 17, 2006.

Tenet Healthcare settles kickback charges for $21 million

Tenet Healthcare has agreed to pay $21 million to settle charges that its Alvarado Hospital in San Diego paid illegal kickbacks to doctors to increase patient admissions. The hospital chain will also sell or close Alvarado Hospital, which had been threatened with exclusion from Medicare and Medicaid participation.

Alvarado Hospital allegedly recruited new doctors with lucrative "relocation" packages into "host" practices in San Diego, disguising payments to the host physicians as "tenant improvements" and "overhead." The indictment alleged that the defendants made the payments to the host physicians with the intent to induce patient referrals to the hospital.

Additional information can be found in the press release issued on May 17, 2006 by the U.S. Attorney's Office, a May 17, 2006 article at, and in a May 18, 2006 news story in the Los Angeles Times.

Saturday, May 20, 2006

Abbott Labs accused of inflating drug prices

The U.S. Dept. of Justice has accused Abbott Laboratories of defrauding Medicare and Medicaid by inflating the prices of its drugs.

USA Today reported on May 18, 2006 that over a ten year period the fraud cost the government more than $175 million.

Abbott inflated the reported manufacturer's price, government programs reimbursed based on that price, and providers were able to pocket the difference, making them more likely to prescribe Abbott's drugs.

The case originated as a whistleblower lawsuit filed by Ven-A-Care.

The DOJ press release has additional details.

Tuesday, May 16, 2006

Lincare, respiratory equipment maker, settles federal kickback charges

Lincare, a maker of home oxygen and other respiratory equipment, will pay $10 million to settle charges that it illegally paid doctors to recommend the company to patients.

Doctors were given tickets to sports events, taken on fishing trips and golf outings, given office equipment, and given kickbacks disguised as consulting fees.

The agreement was the result of an investigation by the Office of the Inspector General of the Dept. of Health and Human Services.

Lincare's press release said that it had also settled other government investigations, but a Justice Department spokesman disputed that.

The New York Times reported on the settlement in its May 16, 2006 issue (subscription required).

Tuesday, May 09, 2006

States and tribes claim energy companies shortchange on royalties

State governments, Indian tribes and individual whistle blowers claim that big energy companies are understating the the amount and quality of natural gas they pump on federal land, and paying less than what they owe in royalties.

The federal Minerals Management Service, a division of the Interior Department, determines what royalties are owed, collects the money, and pays the states and tribes their shares. Groups representing 57 tribes and 11 states are pressuring the MMS for better accounting and higher royalty payments. And at least one whistle blower has filed a suit under the qui tam provisions of the False Claims Act to recoup what he claims are tens of billions of dollars in underpayments.

The complete Washington Post story, published om May 7, 2006, can be read at their website (subscription required).

Medco to settle fraud charges for $163 million

Although the settlement is not yet final, Medco Health Solutions, Inc. has announced it will settle allegations by the U.S. Dept. of Justice related to the company's handling of prescriptions for federal employees and retirees. The pharmacy benefits manager was accused of inappropriately canceling prescriptions, changing prescriptions without a doctor's consent, underfilling prescriptions, and other misconduct.

The suit, originally filed by two whistleblowers under the qui tam provisions of the False Claims Act, was joined by the government.

The settlement amount is estimated to be $163 million.

The Wall St. Journal's May 5, 2006 story was summarized at the Kaiser Network site.

HHS Inspector General finds problems with physical therapy billings

The Office of the Inspector General for the Health & Human Services Administration found that approximately 91 percent of physical therapy billed by physicians in the first 6 months of 2002 was inappropriately paid, and cost the program approximately $136 million. Billing patterns and unusually high volumes of claims suggest that physical therapy is vulnerable to abuse.

The report, Physical Therapy Billed by Physicians (OEI-09-02-00200), can be found at the OIG website.

Maximus Medicaid claims investigated

Maximus Inc. disclosed that it has received a subpoena from the criminal division of the U.S. Dept. of Justice. The subpoena follows the filing of a False Claims Act lawsuit that claims the consulting company overcharged the federal government when it attempted to recoup Medicaid funds for foster children in the District of Columbia.

The whistleblower suit alleged that Maximus, whch received 10 cents for every dollar it helped the District recoup, demanded that Medicaid reimburse the District for services that were not rendered and created false records to support the claims.

These developments were reported in the May 3, 2006 issue of the Washington Times.

Tuesday, May 02, 2006

Private prison companies sued under Florida False Claims Act

A whistleblower suit unsealed in Leon County, Florida, charges that Corrections Corporation of America and GEO Group filed false bills at some of the state prisons they operate. The state of Florida declined to join the suit.

A 2005 state audit said that the now defunct Correctional Privatization Commission had allowed the two companies to overbill the state by nearly $13 million for questionable and excessive costs.

An Associated Press report ran in the May 1, 2006 issue of the Palm Beach Post.