Tuesday, January 20, 2009

Minnesota considers state False Claims Act

A bill to establish a state False Claims Act has been introduced in the Minnesota Senate.

Senate Bill 82 is described by its supporters as needed to help save the state millions by encouraging those working for state contractors to report rip-offs, according to the Star Tribune. Whistleblowing employees could receive up to 30 percent of lawsuit settlements reached with contractors that knowingly defrauded the state.

Eli Lilly settles off-label marketing suit for $1.415 billion

Eli Lilly and Company has agreed to plead guilty and pay $1.415 billion for promoting its drug Zyprexa for uses not approved by the Food and Drug Administration (FDA), according to the U.S. Department of Justice.

Four separate lawsuits were brought under the qui tam provisions of the False Claims Act, alleging that Lilly marketed its antipsychotic drug Zyprexa for uses that had not been approved by the FDA. The promotion of these off-label uses caused false claims for payment to be submitted to federal insurance programs such as Medicaid, TRICARE and the Federal Employee Health Benefits Program, none of which provided coverage for such off-label uses.

The $1.415 billion includes a criminal fine of $515 million, the largest ever in a health care case, and the largest criminal fine for an individual corporation ever imposed in a United States criminal prosecution of any kind. Eli Lilly will also pay up to $800 million in a civil settlement with the federal government and the states.

ACLU challenges FCA seal provisions

The American Civil Liberties Union has filed a complaint in the U.S. District Court for the Eastern District of Virginia challenging the constitutionality of the seal provisions of the False Claims Act.

The suit contends that the seal provisions, which keep the complaint from being made public and keep the whistleblower from discussing the complaint until the Justice Department decides whether to intervene, can keep a fraud secret for years and prevent the public from learning about threats to health and safety.

Alabama hospice company settles whistleblower suit

SouthernCare, a hospice company based in Birmingham, Alabama, has agreed to pay $24.7 million dollars to settle a False Claims Act suit brought by two nurses formerly employed by SouthernCare.

The U.S. Dept. of Justice announced the settlement, which resolves allegations that the company, which operates at 99 locations in 15 states, purposefully enrolled ineligible patients for hospice care, which is restricted to patients who have six months or less to live.

Supreme Court grants cert in FCA suit

According to the scotusblog the U.S. Supreme Court will consider whether a qui tam plaintiff in a False Claims Act suit must file a notice of appeal within 30 days or whether the 60 day limit that applies to the federal government also applies to a qui tam plaintiff.

The case is US ex rel Eisenstein v City of New York, on appeal from the Second Circuit.

Monday, January 12, 2009

NY hospitals accused of drug rehab fraud

Seven hospitals in New York state allegedly defrauded Medicaid of $50 million in connection with drug treatment programs.

Both the New York State Attorney General and the U.S. Attorney's Office in Brooklyn have filed suits alleging that the hospitals admitted patients who weren't addicts into unlicensed treatment programs, paid kickbacks for referrals, and lured homeless people into medical beds with beer.

The hospitals involved are Columbia Memorial Physicians Hospital Organization Inc. in Hudson; Long Beach Medical Center; New York Downtown Hospital; St. Joseph's Medical Center in Yonkers; Queens' Parkway Hospital; the former Our Lady of Mercy in the Bronx; and Benedictine Hospital in Kingston.
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Thursday, January 08, 2009

Teva Pharmaceuticals pays $7 million to settle Mass. FCA suit

Teva Pharmaceuticals and its subsidiary, Ivax Pharmaceuticals, paid $7 million to the Massachusetts Medicaid program to settle a False Claims Act case.

Teva and Ivax are among 13 drug makers sued in 2003 by the state for allegedly inflating prices they reported to national pharmaceutical price-reporting services.

Massachusetts has already received $7.48 million in settlements with five other defendants, according to the Massachusetts Attorney General's Office.

The lawsuit accused the companies of selling their drugs to doctors and pharmacies at prices below the cost they were reporting to the government, telling them that they could pocket the difference, a practice sometimes referred to as "marketing the spread."

Ad agency settles FCA suit involving Army ad campaign

Leo Burnett, a Chicago advertising firm, has agreed to pay the United States $15.5 million to settle a False Claims Act whistleblower suit.

The settlement resolves allegations that Leo Burnett improperly billed the Army while developing a recruiting website and for advertising under the "Army of One" multimedia advertising campaign. Leo Burnett will make a cash payment of $12.1 million and credit the Army $3.4 million in work performed, but not billed.

The whistleblowers will receive $2.79 million as their share of the settlement.