Monday, January 24, 2011

First Senate Judiciary Committee hearing of 112th Congress to focus on fraud enforcement

The chairman of the Senate Judiciary Committee, Patrick Leahy (D-Vt.), has announced his intention to focus on fraud enforcement in a hearing that will be held on January 26.

The hearing, entitled “Protecting American Taxpayers: Significant Accomplishments and Ongoing Challenges in the Fight Against Fraud,” will include testimony from two senior Department of Justice officials. The hearing will address recent successes in the struggle to prevent and prosecute fraud, as well as opportunities to improve the process.

Senator Leahy, who co-authored the Fraud Enforcement and Recovery Act with Senator Chuck Grassley (R-Iowa), has announced his intentions to make anti-fraud legislation a priority in the 112th Congress.

Wednesday, January 19, 2011

Whistleblower case alleges NYC overbilled Medicare by tens of millions of dollars

In an unfolding whistleblower case, the federal government has accused New York City of overbilling Medicaid by “at least tens of millions of dollars.” The complaint alleges excessive and improper placement of Medicaid patients in a 24-hour home care program, often against the recommendation of medical professionals.

Home care services provide Medicaid patients with in-home support, ranging from cleaning and organization to administering medical care. The government alleges that New York City has been placing patients in home care that do not require such services, as well as placing patients in home care that require more intensive, institutional care – payment for which the City would have had to contribute.

Before 2006, the cost of home care was split among the federal government, state government and New York City. Since 2006, New York City is no longer billed for that service; the government alleges this change in billing as a potential motive for overuse of the service, although their information goes back a decade and the lawsuit does not specify a significant change after 2006.

The case was brought to the government by whistleblower Dr. Gabriel Feldman, who stands to earn 10-30% of any money recovered by the government.

Government contractor to pay $6.25 million to settle False Claims Act violation

Fastenal Company, a national hardware distributor, has agreed to pay $6.25 million to settle allegations that it violated terms related to a contract with the US General Services Administration (GSA).

Fastenal was awarded a Multiple Award Schedule (MSA) contract, allowing it to participate in a streamlined marketplace of government purchasers. To be awarded an MSA contract, contractors must disclose to the government commercial pricing procedures and policies and comply with the terms of the contract in all related transactions.

The $6.25 million dollar payment resolves allegations that Fastenal knowingly overcharged government purchasers, as well as the allegation that Fastenal violated the Trade Agreements Act by selling to the US government products manufactured in countries that do not have trade agreements with the US.

The contract violations were discovered during a GSA post-award audit. "This case is another demonstration of the value of OIG audits in helping to uncover fraud on government programs," said Brian D. Miller, GSA Inspector General.