Wednesday, December 26, 2007

St. Joseph's Hospital of Atlanta will pay $26 million in whistleblower suit

Saint Joseph's Hospital of Atlanta Inc. and Saint Joseph's Health System Inc. have agreed to pay $26 million to settle allegations that they defrauded Medicare.

The suit, which originated as a whistleblower suit filed by a nurse who worked at Saint Joseph's, alleged that the hospital violated the federal False Claims Act with regard to billing for inpatient admissions and other services.

Federal prosecutors charged that the hospital submitted Medicare claims between 2000 and 2005 that should have been billed as "outpatient visits" but were instead sent as "inpatient admissions." Inpatient admissions were reimbursed at a higher rate and the hospital received higher payments than it was entitled to.

The whistleblower will receive $4.94 million from the settlement, according to the December 21, 2007 press release issued by the U.S. Attorney's Office.

Thursday, December 20, 2007

Whistleblower suit charges Pfizer with off-label marketing of Lipitor

A whistleblower suit charges that Pfizer defrauded the government by illegally promoting off-label uses of Lipitor, according to the Wall Street Journal on December 20, 2007.

The lawsuit, filed in 2004 but just unsealed, alleges that Pfizer used misleading educational programs as part of a marketing strategy to encourage physicians to prescribe the cholesterol-lowering medication for patients who did not need it.

Companies are not allowed to promote drugs for indications that have not been approved by the Food and Drug Administration, but doctors aren't prohibited from prescribing them for unapproved uses. Independent educational programs can discuss off-label uses that aren't FDA approved. The lawsuit charges that the Pfizer-funded programs weren't independent.

Monday, December 17, 2007

Mining company will pay Calif. $42.2 million in stolen sand case

Hansen Building Materials has agreed to pay the state of California $42.2 million to settle allegations that the company stole 2 million cubic feet of sand. It was then sold to construction companies to make concrete and cement.

The whistleblower who originated the suit will receive $10 million for his efforts, according to a December 12, 2007 report in the San Francisco Chronicle.

This is the second-largest recovery in a suit brought under the state's False Claims Act.

Hansen had taken over sand-dredging leases from other companies. The leases required the companies to pay royalties based on the sale price. The whistleblower, a tug boat captain who pulled sand-filled barges for Hansen, alleged that the company took sand from areas where it did not hold leases and under-reported its sales to the state.

New Jersey hospital settles whistleblower suit

Warren Hospital in Phillipsburg, N.J., will pay the United States $7.5 million to settle allegations that it defrauded Medicare. The suit, which originated as a whistleblower suit under the qui tam provisions of the federal False Claims Act, alleged that the hospital improperly increased charges to Medicare patients in order to obtain enhanced reimbursement from Medicare. The hospital allegedly inflated charges for patient care in order to collect supplemental payment under Medicare's outlier payment system. That program was introduced to ensure that
hospitals possess the incentive to treat inpatients whose care requires unusually high costs.

Earthtimes reported on December 10, 2007 that the relators in the first lawsuit brought against Warren will share a reward of $1.6 million.

HealthSouth to pay $14.2 million to settle health care fraud claims

HealthSouth Corp. and two physicians have agreed to pay the United States a total of $14.9 million to settle allegations that the company submitted false claims to the government and paid illegal kickbacks to physicians who referred patients for care in some of its hospitals, outpatient rehabilitation clinics, and ambulatory surgery centers, the Justice Department announced on December 14, 2007.

HealthSouth will pay $14.2 million, and the physicians will pay a total of $700,000 under separate settlement agreements.

California ambulance company settles Medicare fraud allegations

The president of a Los Angeles-based ambulance company, Greybor Medical Transportation, Inc., and his wife have agreed to pay the government $6 million to settle civil allegations that they fraudulently overbilled Medicare.

The press release from the U.S. Attorney's Office for the Central District of California says that the False Claims Act lawsuit alleged that Greybor submitted claims for ambulance transport to Medicare that falsely stated a patient was “bed-confined,” when in fact the Medicare beneficiary was not. Medicare does not pay for non-emergency ambulance transportation unless no other option is available and only if the patient is bed-confined.

Texas hospital settles healthcare FCA suit

Harris Methodist HEB Hospital (HEB) of Bedford, Texas, has agreed to pay the state of Texas and the federal goverment $1.9 million in settlement of a False Claims Act suit.

HEB's corporate parent self-disclosed to the inspector general of the Dept. of Health and Human Services that it had discovered a physician lease arrangement that might have been in violation of federal law. Following an investigation, the U.S. and Texas alleged HEB was paid by the Medicare and Texas Medicaid programs for orthopedic items and services referred to HEB by a physician group that had received free rent from HEB.

Additional deatils are available in the December 10, 2007 press release from the U.S. Attorney's Office for the Northern District of Texas.

Arizona Heart Hospital settles FCA suit

Arizona Heart Hospital has agreed to settle a False Claims Act suit involving the implantation of graft devices used to treat aneurysms. According to a press release published December 10, 2007 at, the U.S. Dept. of Justice alleged that the devices had not received final marketing approval from the Food and Drug Administration. Medicare has special rules regarding reimbursement for the implantation of so-called investigational devices and the hospital failed to follow those rules.

The hospital will pay approximately $5.8 million in settlement of the allegations.

Monday, December 10, 2007

Merck settles nominal pricing fraud case for $670 million

Merck has agreed to pay $670 million to settle allegations that it violated the False Claims Act by engaging in nominal pricing fraud.

According to a December 4, 2007 article in the Corporate Crime Reporter, the company allegedly defrauded federal and state health care programs by offering to provide hospitals with, for example, its statin drug at a nominal cost if the hospital would agree to fill the majority of its statin prescriptions with that company's drug.

Tuesday, December 04, 2007

Haven Healthcare office raided by federal investigators

The corporate headquarters of Haven Healthcare, an operator of nursing homes, were raided by federal investigators last week, according to a December 1, 2007 posting on the website of the Hartford Courant.

Sources said that the company is being investigated for possible Medicare and Medicaid fraud and tax fraud.

The company operates 25 nursing homes, 15 of them in Connecticut.

The paper reports that Haven Healthcare and 41 related entities filed for bankruptcy protection last week, after the Courant published a three-day series detailing the company's spiraling debt and numerous lawsuits alleging bad credit and bad patient care.

Oklahoma doctor will pay $1.5 million in qui tam suit

Gregory Pinegar, formerly a general practice physician in Alva, Oklahoma, will pay $1.5 million to resolve civil charges of defrauding Medicare.

Pinegar is currently serving a 33 month prison term after pleading guilty in a parallel criminal proceeding.

The civil suit, which was originally brought by a whistleblower under the qui tam provisions of the False Claims Act, alleged that Pinegar overcharged Medicare for the administration of Procrit and Remicade. The civil case alleged that before sending billing information to Medicare, Pinegar altered billing forms to show either that his office had administered drugs that were not actually administered or that his office had administered the drugs in quantities greater than what were actually administered.

According to a report in the December 2, 2007 issue of the Alva Review-Courier, the whistleblower in the case was awarded $250,000.