Monday, March 31, 2008

Japanese drug company will pay $4 million to settle FCA charges

Otsuka American Pharmaceutical Inc., the U.S. subsidiary of Japanese pharmaceutical manufacturer Otsuka Pharmaceutical Co., Ltd., will pay more than $4 million to resolve allegations that it marketed Abilify, an atypical antipsychotic drug, for "off-label" uses.

The Corporate Crime Reporter said that the Food and Drug Administration had approved Abilify to treat adult schizophrenia and bi-polar disorder but that the company promoted it for pediatric use. While physicians are allowed to prescribe drugs for "off-label" uses, companies are prohibited from promoting drugs for uses that aren't FDA approved.

The whistleblower in the suit will receive $348,000 as his relator's share.

Whistleblowers seek to have flood insurance suit reinstated

A group of former insurance adjusters, known as the Branch Consultants LLC, have asked a federal appeals court to reinstate their False Claims Act suit, according to a March 27, 2008 article in the Times-Picayune.

The suit, which was dismissed because of the Act's first-to-file bar, alleged that insurers have been systematically shifting the cost of hurricane damage onto the National Flood Insurance Program.

The suit that pre-dated theirs was filed by by Mississippi lawyer Richard "Dickie" Scruggs, who recently pled guilty to conspiring to bribe a judge.

Government focuses on managed-care fraud

According to an article in the March 19, 2008 issue of the Wall Street Journal, government regulators are increasing their scrutiny of Medicare and Medicaid managed-care providers.

The managed-care industry covers more than 37 million state and federal beneficiaries. They typically receive fixed payments per patient, regardless of how many services are provided. Some of the ways they have attempted to illegally increase their profits include shortchanging patients or physicians to cut costs while collecting preset fees from the government. They might refuse to enroll unhealthy people, skimp on paying doctors or deny patients care.

Companies settle FCA suit alleging faulty jet parts

Huntington Valley Industries of California and Bayjet, Inc. of new mexico have agrees to pay over $45,000 to settle allegations that they defrauded the Air Force.

The False Claims Act suit alleged that the companies substituted an outdated seal used in the nose wheels of A-10 Thunderbolt aircraft, potentially endangering the lives of U.S. service members.

The case began when the front wheel of one of the jets separated from the landing gear in 2005, according to an article in the March 30, 2008 issue of the Salt Lake Tribune.

Tuesday, March 25, 2008

Psychiatrist to pay $1.1 million to settle FCA suit

Gulshan Sultan, M.D., will pay $1.1 million to resolve allegations that she violated the Federal False Claims Act and the Tennessee Medicaid False Claims Act. The U.S. Attorney for the Eastern District of Tennessee announced the consent judgment on March 20, 2008.

The complaint alleged that Dr. Sultan submitted false billing to the healthcare programs when services were not performed by her but rather by a nurse without the requisite psychiatric training and licensing. She was also alleged to have submitted bills on over 200 separate days for face-to face, time-based psychotherapy services when she did not perform the services billed. The complaint also states that on a number of days Dr. Sultan claimed to have performed time-based services well in excess of 24 hours.

Tuesday, March 18, 2008

CVS Caremark will settle Medicaid drug fraud allegations

CVS Caremark Corp. has agreed to pay $36.7 million to settle claims it improperly switched patients from the tablet version of the prescription drug Ranitidine (generic Zantac) to a more expensive capsule version in order to increase Medicaid reimbursement.

This False Claims Act suit was originally filed as a whistleblower lawsuit by Bernard Listiza, a pharmacist, who will receive $4.3 million as his relator's share. The federal share of the settlement is approximately $21.1 million. Twenty-three states and the District of Columbia will share $15.6 million pursuant to separate settlement agreements, according to the press release issued on March 18, 2008 by the U.S. Dept. of Justice.

Monday, March 17, 2008

Whistleblower suit alleges overbilling by Planned Parenthood

A former Planned Parenthood executive has filed a False Claims Act suit alleging that the group's California affiliates overcharged state and federal governments for birth-control pills.

The Los Angeles Times reported on March 8, 2008 that suit by a former Planned Parenthood executive contends that the organization's California affiliates overbilled the state and federal healthcare agencies by at least $180 million.

Healthcare consulting firm settles Medicare fraud claims

Besler & Company, Inc., a New Jersey healthcare consulting firm, will pay the United States $2.875 million to settle allegations of fraud against the federal Medicare program, according to a March 5, 2008 Justice Department press release.

A whistleblower lawsuit, filed under the qui tam provisions of the False Claims Act, alleged that the firm counseled hospital clients to improperly increase charges to Medicare patients in order to obtain enhanced reimbursement.

Cathedral Healthcare System settles qui tam suit

Cathedral Healthcare System Inc. will pay the United States $5.3 million to settle allegations that it defrauded the federal Medicare program, according to a March 4, 2008 press release from the Dept. of Justice.

Whistleblowers had charged that the hospital violated the False Claims Act by improperly inflating charges for inpatient and outpatient care to make the cases appear more costly than they were. This practice enabled the hospital to receive additional reimbursement, called outlier payments, intended by Medicare to compensate hospitals for handling cases where the cost of care is unusually high.

The relators will receive $848,000.

Yale-New Haven Hospital to settle FCA suit

Yale-New Haven Hospital has agreed to pay $3.8 million to resolve allegations that it violated the False Claims Act.

In a March 7, 2008 press release, the U.S. Attorney's Office said that the conduct involved had been disclosed by the hospital under the Provider Self-Disclosure Protocol. Between 2000 and 2005 the hospital billed Medicare for more infusion therapy and chemotherapy administration services than were allowed. Some services billed did not have adequate documentation.

Monday, March 10, 2008

Northrop Grumman accused of defrauding Joint STARS program

A whistleblower lawsuit accuses Northrop Grumman's Melbourne division of defrauding the federal government's Joint STARS radar aircraft program.

The suit alleges that through inflated labor charges, false overtime claims and other billings, Northrop Melbourne has massively overcharged the government.

According to a March 7, 2008 article in the Orlando Sentinal, the government declined to intervene in the case at this time.

Tuesday, March 04, 2008

Dallas school district settles FCA suit

The Dallas Independent School District has agreed to pay $316,000 to settle allegations that it misused federal grant money.

The district received grant money from the Centers for Disease Control and Prevention, acoording to a February 27, 2008 article in the Milwaukee Business Journal. The funds were to be used for HIV/AIDS prevention but were allegedly used to subsidize staffing costs for activities outside the scope of the grant.

Government joins whistleblower suit against South Carolina hospital

The federal government has decided to join a whistleblower lawsuit alleging that Tuomey regional hospital of Sumter, South Carolina, submitted false health care claims to Medicare and Medicaid.

The surgeon who brought the False Claims Act suit alleged that Tuomey bribed doctors to go into business with the hospital and then gave them kickbacks, according to a February 28, 2008 article in The State.

Monday, March 03, 2008

Senate committee considers amendments to False Claims Act

The Senate Judiciary Committee held hearings on February 27 on proposed amendments to the False Claims Act.

According to a report in the February 28, 2008 New York Times, both Democratic and Republican committee members said they wanted to work with the Justice Department to undo some of the harm they thought had been caused by courts' interpretation of the law. They cited to examples of apparently valid cases that were dismissed on legal technicalities.

Among the cases mentioned was one against Bombadier Corporation, which was dismissed because the court ruled that the False Claims Act did not cover fraud against Amtrak. Amtrak, a corporation whose stock is mostly held by the government, was considered by the court not to be a "government entity."

Another case involved the American military contractor, Custer Battles L.L.C. After the company was convicted of fraud in connection with distributing new currency in Iraq, a judge threw the verdict out, saying the whistle-blower law covered only fraud involving American money, and the funds at issue in the Custer Battles case were Iraqi.