Monday, April 14, 2008

Manufacturer settles defective bulletproof vest lawsuit

Protective Products International Inc. (PPI) will pay the federal government $960,000 to resolve a False Claims Act suit, the Dept. of Justice announced on April 10, 2008. The suit alleged that PPI sold the government Zylon bulletproof vests it knew were defective because the Zylon material was not appropriate for ballistic applications.

Other posts on Zylon suits can be found on November 7, 2007 and July 6, 2005.


Florida Radiologist to Pay $7 Million to Resolve FCA suit

Radiologist Fred Steinberg, M.D., his imaging centers and related entities in Palm Beach County, Fla., have agreed to pay the federal government $7 million to resolve allegations of health care fraud, the U.S. Dept. of Justice announced on April 14, 2008.

The suit, originally brought under the qui tam provisions of the False Claims Act by David Clayman, alleged that portions of CT scans were not performed, even though the procedures were billed and reported to patients’ physicians as if they were done. The bills were submitted as though CT scans were carried out both with and without contrast, when in reality the CT scans without contrast were not performed. The government also alleged that the Steinberg entities did CT scans and ultrasound exams that were not ordered by physicians and were not medically necessary.

Mr. Clayman was represented by Peter Chatfield of Phillips & Cohen and Janet Goldstein of Vogel, Slade & Goldstein.

Medicaid Dental Center resolves FCA suit

Medicaid Dental Center of North Carolina will pay $10.05 million to resolve False Claims Act allegations, the United States Justice Department announced on April 9, 2008.

The company was accused of billing the North Carolina Medicaid program for medically unnecessary dental services performed on indigent children. Among the medically unnecessary procedures were pulpectomies (often referred to as a “baby root canal”) and placement of stainless steel crowns.

Tuesday, April 08, 2008

Geriatric care provider will settle FCA suit for $117 million

HealthEssentials Solutions, Inc., a former Kentucky-based provider of geriatric care, has admitted to to submitting false claims to Medicare. The company has agreeed to criminal restitution of $3.1 million and payment of $117 million to resolve civil claims under the False Claims Act.

Three different whistleblower lawsuits filed by four former employees of the defendant company, alleged that HealthEssentials engaged in upcoding – the practice of improperly assigning a billing code to a patient that is not supported by the medical record for the purpose of obtaining a higher level of reimbursement.


The March 28, 2008 press release from the U.S. Attorney's Office for the Westen District of Kentucky said that the company billed visits to patients in assisted living facilities as though they were performed in patients' homes.

On March 1, 2005, HealthEssentials filed for Chapter 11 bankruptcy protection.

Wackenhut accused of overbilling Miami-Dade County

A whistleblower lawsuit accuses Wackenhut Corp. of billing Miami-Dade County for 69,000 hours of security work that the company's employees were never paid for.

The Miami Herald reported on April 7 that the "ghost posts" on the Metrorail transit system and at the Juvenile Assessment Center cost the county nearly $1.6 million.

Judiciary Committtee approves False Claims Act amendments

Proposed amendments to the False Claims Act were reported favorably out of the Senate Judiciary Committee on April 3, according to Federal Times.

The bill, S 2041, sponsored by Sen. Charles Grassley, R-Iowa, would strengthen the False Claims Act, which has been weakened by a series of court decisions that limited both the ability of whistleblowers to file lawsuits and their ability to recover claims.

Thursday, April 03, 2008

U.S. joins whistleblower suit against Ohio hospital

The U.S. Dept. of Justice has joined a whistleblower suit that alleges fraud by Christ Hospital and Ohio Heart and Vascular Center, the Cincinnati area's largest cardiology practice.

The suit, filed under seal in 2003, contends that the hospital gave doctors in the group improper financial incentives in exchange for patient referrals. In return, Christ Hospital referred patients to the Ohio Heart physicians who sent them the most business.

This type of preferential treatment is not permitted under Medicare and Medicaid rules.

Both the Cincinnati Enquirer and the Business Courier reported on the intervention. Potential liability could be as high as $424 million.

Tuesday, April 01, 2008

Whistleblowers charge insurers overburden Social Security

An April 1, 2008 article in the New York Times says that whistleblowers have filed suits accusing insurers of abusing the Social Security Administration.

Disability insurers can reduce payments to clients if they are accepted for government disability payments. Lawsuits filed against Cigna Corp. and Unum Group say that the companies force clients to apply for workers' compensation and government disability even when the insurers know those claims are frivolous.

These practices are clogging the Social Security system and forcing the truly disabled to wait years for a hearing, according to former Social Security Administrator Kenneth Nibali. It costs the government between $1,180 and $4,759 to screen an applicant for disability benefits, Nibali said, and the wait for a hearing from an administrative law judge has grown from 258 to 512 days since 2000.