jimi-filipovski-189724-copy-300x176Individuals and businesses named in qui tam lawsuits alleging fraud against the government based on the False Claims Act (FCA) have always been at risk for significant financial penalties. If the federal government decides to join the qui tam action against the defendants, this is a sign of a great deal of evidence in the government’s favor. A court ruling against some or all of the defendants or a settlement between them and the government is bound to follow. However, since mid-2016, the financial risk for these defendants has been even higher as the minimum and maximum civil penalties increased. Along with continued enforcement, this could mean the U.S. receives an even greater amount from FCA cases in the 2017 fiscal year.

FCA Claims are Taken Seriously

Under the Obama Administration, qui tam and FCA claims were taken seriously. The U.S. Department of Justice (DOJ) recovered more than $4.7 billion from FCA cases in the 2016 fiscal year. As we transition into the Trump Administration and Attorney General Sessions gets to work, it appears as if heavy FCA enforcement will continue. Democrats and Republicans both agree with finding and prosecuting fraud against the government, and Sessions has agreed he will make recovering fraudulently obtained monies a high priority.

https://www.healthcare-fraud-lawyer.com/files/2017/04/DETAIL_OF_STEAM_WHISTLE_-_Anderson-Christofani_Shipyard_Innes_Avenue_and_Griffith_Street_San_Francisco_San_Francisco_County_CA_HAER_CAL38-SANFRA139-18.tif_-213x300.jpgQui tam claims are lawsuits filed by private citizens on behalf of the federal government based on allegations that someone violated the False Claims Act (FCA) or another federal statute. Most of the time these types of claims are brought by employees, or ex-employees, who were able to gather evidence of false claims made by their employer to the government. Qui tam cases are complicated, and it is crucial that you, as a whistleblower, work with an experienced California qui tam lawyer and understands the legal process you are about to undergo.

If you believe you have evidence of fraud against the government, call the Brod Law Firm to learn about what to do next.

An Overview of the Qui Tam Process

 jimi-filipovski-189724-copy-300x176In the qui tam case of BlueWave Healthcare v. U.S., the government was allowed to execute writs of attachment against both real and personal property and writs of garnishment against bank accounts of the defendants under the Federal Debt Collection Procedures Act (FDCPA). The defendant’s attempted to appeal the denial of their motions to quash these writs, but this appeal was dismissed for lack of jurisdiction.

About the Case

The qui tam case was filed by Scarlett Lutz and Kayla Webster against BlueWave HealthCare Consultants, Robert Bradford Johnson, and Floyd Calhoun Dent in 2014. Lutz and Webster, the relators, alleged that the defendants had violated the Anti-Kickback Statute and the False Claims Act. They stated that the defendants arranged for illegal kickback payments to doctors, which were labeled processing and handling fees. The federal government intervened in the case in April of 2015.

benjamin-child-90768-300x200Vinod Khurana alleged he should receive part of a $500 million settlement agreement between Science Applications International Corp. (SAIC), New York City, and the Southern District U.S. Attorney’s Office since he was a whistleblower who informed the government of SAIC’s fraudulent billing and record-keeping system. However, the court denied this claim stating that Khurana was not a valid qui tam relator in relation to the settlement. Therefore, he had no right to a portion of the agreement as if it were the government’s alternate remedy.

Khurana’s History with SAIC

Khurana was a software engineer with Spherion, a quality assurance company that was hired to review SAIC’s records and billing on the CityTime system, which was used to track municipal workers’ hours. By working with CityTime, Khurana discovered that SAIC managers had a fraudulent billing and record-keeping system that made them money. He claims his bringing forward information about this fraud between 2004 and 2007 was what led to his dismissal in 2007.

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Based on documents from a qui tam lawsuit filed against numerous health insurance companies, it is clear that the U.S. Department of Justice is looking into allegations that major health insurers in the U.S. are overcharging Medicare. These insurers include UnitedHealth Group Inc., Health Net Inc., Aetna Inc., and Bravo Health Inc., which is part of Cigna Corp. You may recognize these as some of the largest insurance providers in the country. The U.S. has agreed to join the qui tam suit against UnitedHealth and declined to intervene in cases against the other insurers. However, the government has stated it will continue its investigation into the allegations against these other insurers separately.

The Beginning of this Qui Tam Action

The qui tam action based on the False Claims Act was filed by Benjamin Poehling in 2011. Poehling was previously an executive at UnitedHealth and alleges that major health insurers overstate how sick Medicare patients are to increase reimbursements by millions of dollars. Through the program known as risk adjustment or risk scoring, healthcare providers would state that numerous Medicare patients under Part C and Part C programs were treated for conditions they did not have or had, yet were not treated for – also known as upcoding. These particularly costly conditions that were coded increased a provider’s risk score and in turn, raised reimbursements from the government.

file9391313432751-225x300There was an unexpected outcome in the unique case of Wadler v. Bio-Rad Laboratories, Inc., et al., when a federal judge in the Northern District of California ruled the Sarbanes-Oxley and Dodd-Frank Acts’ whistleblower protections preempted attorney-client privilege. This ruling allowed Sanford Wadler, the former general counsel of Bio-Rad Laboratories, Inc., to bring file a whistleblower action against his previous employer, take the case through trial, and receive compensatory and punitive damages.

Wadler v. Bio-Rad Laboratories, Inc., et al.

In 2015, Wadler brought a lawsuit against Bio-Rad for firing him in retaliation for investigating potential violations of the Foreign Corrupt Practices Act (FCPA) in China and taking his concerns to the company’s audit committee. These concerns arose after the company’s officers learned in 2009 that there were FCPA violations in Vietnam, Thailand, and Russia. The company determined that it needed to investigate whether similar violations occurred in China. An outside law firm determined there was no evidence of FCPA violations in China. However, Wadler believed this was not actually the case and continued to look into these issues, even going to the company’s audit committee about them.

bob-brents-182206-300x240The U.S. District Court of the Southern District of California granted whistleblowers a significant victory this year. In the case of Erhart v. BofI Holdings, Inc., the district court found an employee’s confidentiality agreement with his or her employer did not trump federal whistleblower’s rights. In some circumstances, employees can gather confidential documentation as evidence of fraud, despite signing a confidentiality agreement. Additionally, any retaliatory actions by the company against the whistleblower in relation to these confidential documents is unlikely to succeed.

Erhart v. BofI Holdings, Inc.

Charles Matthew Erhart was an internal auditor for BofI Federal Bank. After being let go, he brought suit against BofI under the Sarbanes-Oxley Act and other whistleblower laws based on the company committing fraud against the government and retaliating for his bringing evidence forward. He stated he was fired because he disclosed the bank’s federal and state law violations to federal regulators.

file5601297827370-300x225Each week new qui tam suits, possible under the False Claims Act (FCA) are brought by private individuals against other individuals and businesses on behalf of the federal government. Many of these lawsuits take years to investigate and litigate. Additionally, each week sees some of these cases settled, finalized, or appealed. Here are a few cases that wrapped up this past week:

  • In February, a physician’s practice in Florida agreed to settle a FCA claim based on Medicare fraud for $750,000. The qui tam suit against Dr. Paul B. Tartell was filed by a former patient Theodore Duay. Duay alleged that Tartell would bill Medicare and the Federal Employee Health Benefits Program for procedures that were not medically necessary or not performed at all. Numerous federal agencies were involved in negotiating this settlement, and Duay will receive $135,000 for filing the action.
  • TeamHealth Holdings will pay $60 million plus interest due to allegations its business, IPC Healthcare Inc., committed fraud against Medicare, Medicaid, the Defense Health Agency, and the Federal Employees Health Benefits Program by billing for more expensive medical services than what were actually provided. Dr. Bijan Oughatiyan filed a qui tam action under the FCA alleging the practice of “upcoding.” The federal government investigated and chose to intervene, providing a detailed description of how IPC Healthcare used false codes to receive greater reimbursements. Oughatiyan will receive $11.4 million for his participation.

drew-hays-206414-200x300In the case of Fair Laboratory Practices Associates v. Riedel, the U.S. Court of Appeals for the 3rd Circuit determined that a qui tam settlement sharing agreement between two claimants did not need to be placed under seal. This is important information for claimants who want to make private agreements to split the proceeds of qui tam cases against the same defendants.

If you are involved in a qui tam lawsuit or believe you have the evidence to bring one, yet you know there are also similar actions in process against the same person, contact an experienced California qui tam attorney from Brod Law Firm right away.

Fair Laboratory Practices Associates v. Riedel

In_the_crosshairs-300x200This February, a federal district judge from the Southern District of New York, part of the Second Circuit Court of Appeals, determined a whistleblower who voluntarily dismissed his False Claims Act (FCA) case against L-3 Communications EOTech Inc. in 2014 could not share in a settlement later reached between L-3 Communications and the federal government in 2015. While this ruling may not be law across the U.S., it is an important opinion for potential qui tam plaintiffs to consider since other federal judges would likely come to the same conclusions. Ultimately, whistleblowers will need to see the entire case through to benefit from a settlement or judgment in the government’s favor.

The L-3 Communications Case

The whistleblower against L-3 Communications was a quality control engineer for the company from May to June 2013. In August 2013, he stated that the company sold defective holographic firearm sights to the American military and law enforcement agencies. The sights were supposed to work in temperatures from negative 40 degrees to 140 degrees Fahrenheit and with humidity. However, they were allegedly defective because they were inaccurate in extreme hot and cold temperatures and humid conditions.