Monday, October 23, 2006

Medco will pay $155 to settle qui tam suit

Medco Health Solutions, a pharmacy benefit management company, has agreed to pay the United States $155 million plus interest to settle allegations that it defrauded federal health plans. The suit alleged that Medco submitted false claims to the government, solicited and accepted kickbacks from pharmaceutical manufacturers to favor their drugs, and paid kickbacks to health plans to obtain business.

US Newswire posted an October 23, 2006 press release.

Conservative commentator settles False Claims Act case

Armstrong Williams, the conservative commentator hired by the federal government to push its educational agenda, will pay $34,000 to settle False Claims Act charges. Williams admitted no wrongdoing in the settlement. The suit contended that Williams was paid for public-service ads which he didn't produce. Investigators found that he was also not paid for other work he completed, so the $34,000 represents $90,000 in penalties minus a credit for the completed work.

Williams' contract had been criticized by the Education Department's inspector general.

USA Today ran an October 20, 2006 story on the settlement.

Atlanta hospital settles whistleblower suit for $5.7 million

Northside hospital of Atlanta, Georgia, will pay $5.7 million to settle allegations that the hospital violated the False Claims Act. According to the suit, the hospital had improper financial and referral relationships with two-physician-owned etities. Those entities will pay $650,000 in settlement.

The hospital operates a clinical transplant program in affiliation with the Blood and Marrow Transplant Group of Georgia. The physicians who own that group also own a clinical laboratory that provides services and products to the hospital. These types of financial arrangements can violate the federal Stark Law, which (with some exceptions) prohibits physician referrals to entities with which they have a financial relationship. The hospital did not admit liability in the settlement.

The Atlanta Business Chronicle reported on the settlement on October 20, 2006

Qui tam suit alleges unnecessary heart surgeries

A whistleblower suit alleges that an Arkansas doctor defrauded Medicare and other federal health programs by performing unnecessary heart surgeries.

The suit, which charges Doctor David Mark McCoy and Saint Edward Mercy Medical Center of Fort Smith, Arkansas, of violating the False Claims Act, was filed by a former patient who claims that
unnecessary heart surgery, and complications from that procedure, led to the amputation of his leg.

The October 14, 2006 Associated Press report can be read at the KAIT-TV website.

Thursday, October 12, 2006

Home healthcare company owner settles qui tam suit

Lourdes Perez, the owner of two of California's largest home healthcare companies, has agreed to pay $33.8 million to settle federal charges that she defrauded Medicare and filed false tax returns to conceal the profits. The settlement may be one of the largest involving home healthcare providers, said Michael Brown, an attorney with the law firm of Phillips & Cohen, who represented the whistle-blower in the case.

Perez owned and operated Provident Home Health Care Services Inc. and Tri-Regional Home Health Care Inc., which together billed Medicare about $80 million annually.

The settlement was reported in th October 11, 2006 edition of the Los Angeles Times, which quoted federal prosecutors as saying that this type of fraud was a serious problem in Southern California.

Tuesday, October 10, 2006

Ambulance provider pays $9 million to settle False Claims Act charges

American Medical Response has paid the United States over $9 million to resolve allegations that the ambulance company provided illegal inducements to hospitals in Texas in exchange for referrals. The inducements took the form of contracts known as "swapping arrangements," which gave the medical facilities discounts on transports in exchange for the referral of transport of Medicare patients being discharged from the hospitals.

The suit began as a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act. The two whistleblowers, former AMR employees, will receive $1.6 million.

An October 5, 2006 press release from the Dept. of Justice is available at U.S. Newswire.

Oracle settles qui tam suit for $98.5 million

Oracle Corp. has agreed to pay $98.5 million to settle charges that its PeopleSoft unit charged the government inflated prices for software. Oracle inherited PeopleSoft's liability under the General Services Administration contract when it acquired the company.

The lawsuit alleged that in negotiations with the federal government PeopleSoft understated the discounts it provided to commercial customers under its multiple product discounting practice. Relying on the faulty disclosure, GSA negotiated discounts for federal customers that were much less favorable than those available to the company's best commercial customers.

The whistleblower who originally brought the suit under the qui tam provisions of the False Claims Act will receive $17.7 million as his relator's share.

A press release dated October 10, 2006 can be found at the Corporate Crime Reporter website.

Tuesday, October 03, 2006

Government report details results in combatting health care fraud

The United States Departments of Justice and of Health and Human Services have issued the Health Care Fraud and Abuse Control (HCFAC) Program annual report for FY 2005.

During fiscal year 2005, the Federal government won or negotiated nearly $1.5 billion in judgments and settlements. The report also shows awards to qui tam relators totaling $137.8 million. The program had success in pursuing allegations of fraudulent drug pricing, kickbacks, pharmaceutical distribution fraud, and dialysis fraud.

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) established a comprehensive program to combat fraud committed against all health plans, both public and private. It required the establishment of a national Health Care Fraud and Abuse Control Program (HCFAC), under the joint direction of the Attorney General and the Secretary of the Department of Health and Human Services ( HHS) acting through the Department's Inspector General (HHS/OIG). The HCFAC program is designed to coordinate Federal, State and local law enforcement activities with respect to health care fraud and abuse. The Act requires HHS and DOJ detail in an Annual Report the amounts deposited and appropriated to the Medicare Trust Fund, and the source of such deposits.