Whistleblowers and Qui Tam Lawsuits

May 18, 2015

When Competitors Collaborate and Costs Rise: Government Contract Fraud Attorney on Bid Rigging

In many ways, government procurement contracts are similar to procurement agreements in the private sphere. The basic elements of all contracts are the same, an offer and acceptance made between two or more competent parties for a legal purpose that creates obligations for both parties (e.g. payment for and the provision of goods/services). However, the government contract system is much more controlled than the private contracting sphere. The government contract bidding process is complex, highly-regulated process that relies upon companies filing honest, competitive offers to fill a given need. Bid rigging is a violation of government trust and a form of government contract fraud. As a bid rigging whistleblowers’ law firm, the Brod Law Firm partners with individuals who see this fraud happen and step forward to report it. When fraud occurs in the private sphere, the companies involved can suffer. When fraud occurs in the government contracting arena, the trust of every American is violated and every taxpayer suffers.

Bid Rigging: Overview and Forms

A useful explanation of bid rigging can be found in a Department of Justice contract2 (“DOJ”) primer written to help people identify various forms of collusion among prospective government contractors. As the primer explains, at a broad level, bid rigging involves competitors conspiring to raise the price of goods/services being purchased by the government. Bid rigging occurs when competitors agree who will submit the best offer during the bidding process, agreements that eliminate/limit true competition. In some cases, the collusion involves some, not all, of the bidders for a given project. Although the primer focuses on antitrust matters, bid rigging can also be a violation of the False Claims Act.

May 11, 2015

Record Settlement in Non-Intervened Health Care Fraud Case

by Gregory J. Brod

When it comes to the world of health care fraud, there’s one truth we cannot emphasize enough – Honest individuals are the key to winning the fight against fraud. It is a truth we see again and again in our work as a whistleblower’s law firm. The False Claims Act (“FCA” or “the Act”) provides a financial incentive for people to elect the morally right path and report suspected cases of health care fraud and other forms of government claims fraud. The importance of health care fraud whistleblowers in the fight for right is emphasized by the emerging story of a record-breaking case against one the nation’s largest kidney dialysis companies.

DaVita Settles False Claims Act Case for $495 Million

In 2007, according to last week’s Denver Post, Dr. Alon J. Vainer and nurse Daniel D. Barbir filed a whistleblower lawsuit against Denver’s DaVita HealthCare Partners. The pair had been working for DaVita when they noticed the company was throwing out good medicine and dividing single use doses into multiple vials. They only filed suit after internal questions/complaints went unanswered. DaVita was, per the allegations, overbilling Medicare and Medicaid. For example, the lawsuit suggests a physician would use part of a 100mg vial of Zemplar (vitamin D) or Venofer (an iron supplement), charging for the whole dosage despite the fact that the patient only needed 25mg. In other cases, doctors were told to treat a patient who needed 8mg of medicine with a 10mg vial instead of a cheaper option of four 2mg vials.

May 4, 2015

Medicare Fraud: A Problem Invading All Aspects of Health Care

by Gregory J. Brod

Among the lessons we’ve learned as a Medicare fraud law firm is that fraud doesn’t always look like you think it does or involve the type of services you’d typically expect. Most people would presume a case of Medicare fraud would involve a geriatric doctor, senior care facility, provider of age-related medical devices, or maybe a general practitioner. However, as the case discussed below reminds us, Medicare fraud extends into every facet of the health care industry. It is only with the help of honest whistleblowers that we can hope to tame this growing beast.

Indictment Filed in Medicare Fraud Case Against Florida Ophthalmologist

In April, the Justice Department announced the filing of a seventy-six count indictment charging South Florida Doctor Salamon Melgen with assorted counts tied to his alleged participation in a Medicare fraud scheme. The charges include 46 counts of health care fraud, 19 counts involving filing false claims, and 11 counts of making false statements involving health care. From January 2008 through December 2013, Melgen billed Medicare for more than $190 million and his practice received reimbursements in excess of $105 million. Officials believe much of this money was received as the result of fraudulent actions.

April 27, 2015

The Role of Compliance Department in Fighting (or Perpetuating) Health Care Fraud

by Gregory J. Brod

Sometimes health care fraud is a well-known secret, something many in a company’s leadership know about and either passively or actively conceal. Likewise, a number of lower-level employees may know about and be asked to help perpetuate the fraud. Fraud takes cooperation. How does this happen when almost everyone we meet agrees that it a blatant violation of both law and their moral codes? Often, especially in cases involving larger organization, our Medicare fraud law firm finds health care fraud continues because the company’s structure allows it.

How Corporate Structure Can Contribute to Fraud

Earlier this year, Atlantic Information Services Inc. (“AIS”), a health care publishing and information organization, published a report on how corporate structures can contribute to health care fraud. The Affordable Care Act mandates that Medicare/Medicaid providers have compliance programs (for an overview of this mandate, see the Medicare and Medicaid Services’ Webinar “The Affordable Care Act Provider Compliance Programs: Getting Started”). The AIS report suggests that the compliance mission is hindered when compliance officers report to a company’s general counsel (“GC”) rather than reporting directly to the CEO or the board of directors. According to the author, the mindset of the GC differs from that of the compliance team. Ultimately, the article suggests legislators pass a new regulation forbidding a structure that makes the compliance department subordinate to the general counsel.

April 20, 2015

Provider Medical Identity Theft

by Gregory J. Brod

Identity theft is a common fear and a common problem. Readers of this blog know that identity theft is a problem that reaches beyond the financial sphere. Quite often, health care fraud cases involve an element of medical identity theft. In a previous post, our medical identity theft lawyer discussed the problem of scammers stealing consumers’ medical identities and using the information to submit and collect on false claims. However, consumers are not the only targets of medical identity theft. Provider identity theft is also a component of many health care fraud scams, criminal enterprises that divert critically needed health care dollars and endanger the health and well-being of countless Americans.

Clinic Owner Allegedly Filed Claims Using Former Owner’s Provider Information

In late August 2012, NBC New York reported on the arrest of a man who operated a radiology practice in Queens on charges that he engaged in health care fraud. According to the article, a 34 year-old man by the name of Ting Huan Tai was taken into custody by federal agents who arrested him at his luxury apartment in a Lower Manhattan high- prescription rise. In May 2010, as alleged in court filings, Tai took over operations at United Medical Diagnosis (“UMD”), a radiology clinic in Flushing, New York. From May 2010 through May 2012, Tai and his staff allegedly used the identity of the clinic’s prior owner, a radiologist, to submit more than $30 million in claims to Medicare and Medicaid. The claimed services were not actually performed and the bills were submitted without the knowledge or consent of the former UMD owner. United States Attorney Loretta Lynch explained, “The defendant sought to enrich himself and fund his lifestyle first by stealing a doctor’s identity and then using that stolen identity to steal Medicare and Medicaid funds…While the documentation provided was a sham, the money stolen was very real.”

April 13, 2015

Beneficiary-Reported Medicare Fraud

by Gregory J. Brod

Often, Medicare fraud is brought to light because a brave employee saw a wrong and spoke up. Notably, however, insiders are not the only ones who can bring a Medicare fraud whistleblower lawsuit (aka a qui tam action). Medicare beneficiaries can also witness and report Medicare fraud. We are proud to partner with Medicare beneficiary whistleblowers in addition to working with current/former employees on health care fraud matters. We investigate the whistleblower’s concerns and, when appropriate, file suit. Our mutual goal is recovering wrongfully diverted funds and preventing on-going/future frauds. As a Medicare fraud whistleblower’s law firm, we also vigilantly work to protect the whistleblower from retaliation and ensure s/he receives fair compensation should the information leads to a recovery.

Example 1: Over $5 Million Recovered in Action Initiated by Medicare Beneficiary Whistleblowers

In Fall 2012, RxAmerica (a subsidiary of CVS) agreed to pay $5.25 million to settle a Medicare fraud action that consolidated two suits brought by Medicare beneficiaries. According to Law360, Robert Fischer filed suit against RxAmerica in a New York federal court after noticing suspiciously large payments on an Explanation of Benefits (“EOB”) report sent to him by Medicare. As explained in a Business Wire report, Jan and Max Hauser also filed suit against RxAmerica bringing their claim in a North Carolina federal court. The Hausers also carefully reviewed an EOB statement and they noticed that RxAmerica was charging the government more money for prescription drugs than had listed in the Plan Finder tool they had used when selecting their Medicare Part D plan. This discrepancy meant the Hausers consumed their allowed benefits faster than expected/promised and had to pay out-of-pocket for their prescription medications.

April 6, 2015

Focus on Fraud: Recruiting Scams and Health Care Fraud

by Gregory J. Brod

Medicare and Medicaid fraud are a thriving business. Medicare and Medicaid fraud are also illegal and, in many ways, immoral enterprises that take advantage of programs intended to help the elderly and impoverished. Health care fraud takes many forms. Today, we focuses on one subset – recruiting schemes. In these cases, scammers recruit “patients,” obtain their beneficiary numbers, and file false and/or exaggerated claims with Medicare or Medicaid. As with other forms of health care fraud, our Medicare and Medicaid fraud law firm believes that whistleblowers are key to fighting health care recruitment fraud.

Scammers Trade Shoes for Beneficiary Numbers Last week, The New York Times reported on a disturbing case of health care fraud. Nine New York doctors are among the 23 individuals named as defendants in a Medicaid fraud scam that netted nearly $7 million dollars. The indictment includes charges of health care fraud, money laundering, and enterprise corruption.

Allegedly, defendants recruited homeless people from soup kitchens and shelters, specifically targeting those with valid Medicaid cards, by promising them free sneakers or other footwear. Recruits would be taken to medical clinics (typically places owned by one of the scammers) where they underwent unnecessary tests and were labeled with fake diagnoses. Scammers would then bill Medicaid to the tune of hundreds or even thousands of dollars per “patient.” Often, bills included claims for medical equipment and testing that were either inappropriate or wholly fictitious and for unnecessary follow-up visits. Before leaving, the homeless men and women were allowed to pick a pair of shoes from stacks of footwear in the clinics’ basement. In some cases, the recruiters were paid a referral fee per recruit; in other cases, Medicaid payments were split between the recruiter and the doctor.

March 30, 2015

Medicaid Fraud: Health Care Fraud Targeting Another Government Program

by Gregory J. Brod

Sometimes it seems like the terms “health care fraud” and “Medicare fraud” are interchangeable. Medicare related fraud is a topic of great concern, but it is important to remember that Medicare is not the only government health care agency targeted by scammers. Medicaid fraud is also a growing problem and our Medicaid fraud law firm is proud to partner with whistleblowers who step forward to bring the perpetrators to justice and return funds to this important program.

Medicaid Fraud Generally

The National Association of Medicaid Fraud Control Units (“NAMFCU”) brings together professionals from across the country to fight Medicaid provider fraud, an epidemic that costs the nation’s taxpayers hundreds of millions of dollars each year. As the NAMFCU’s website explains, the perpetrators of Medicaid fraud range in size from sole practitioners to large medical institutions and include all segments of the health care industry from hospitals and home health providers to pharmacies and medical equipment companies. Examples of Medicaid fraud include: Billing for services that were not rendered and/or patients not actually seen; Billing both Medicaid and a private insurer for the same treatment; Misrepresenting provider credentials; Charging for unnecessary treatment, and; Kickback schemes involving the exchange of improper payments in exchange for referrals.

March 23, 2015

Health Care Fraud Recovery Numbers For 2014 and the False Dichotomy of Prevention and Prosecution

by Gregory J. Brod

An article released by the Wall Street Journal late last week caught the attention of health care fraud lawyer Greg Brod. As discussed below, the article reviews some promising numbers from 2014 that show the fight against health care fraud is gaining ground and, at the same time, show how far we have to go. The article also discusses what it calls a shift in focus from “chasing fraud” to preventing it. We believe this is a false dichotomy and that belief, the belief that prosecuting fraud prevents fraud, is part of what motivates our firm’s commitment to partnering with private whistleblowers to fight health care fraud.

Government Reports $3.3 Billion Recovered in 2014 from Perpetrators of Health Care Fraud

Last Thursday, The Wall Street Journal reported that the U.S. government recovered $3.3 billion in the course of fiscal year 2014 from the perpetrators of health care fraud schemes that targeted federal health programs. The article cites a report from the federal Health and Human Services Administration (“HHS”) that was released to the public later the same day. Over the past three years, the administration recovered $7.70 for each dollar it spent investigating fraud in the health care arena. This is the third-highest level of return on investment since the government launched the Health Care Fraud and Abuse Control Program in 1996. Since that time, investigations have resulted in the return of over $27.8 billion to the Medicare and Medicaid systems. Nonetheless, the recoveries represent only a small fraction of the amount scammers are believed to be draining from the federal program coffers. Fraud is believed to account for a startling 10% of all Medicare spending, a figure that works out to $58 million a year.

March 16, 2015

A Question of Trust – Excluding the Perpetrators of Fraud from Future Government Contracting Opportunities

by Gregory J. Brod

Government contracting fraud is a crime of opportunity. It involves wrongs perpetrated by people who are in a position of trust. It is a crime that amounts to stealing from the government at best; at worst, it can put our military at risk or pose a threat to public health/welfare. Once an individual has been convicted of government contracting fraud, should they be afforded the opportunity to hold a leadership role in a company that contracts with the government again? Can we trust them? In this post our government contract fraud attorney looks at one state’s proposal that addresses that very issue and also at how government contract exclusions operate in the health care arena.

New Jersey Proposes Permanent Ban for Key Employees Convicted of Government Contract Fraud

Last month, news site NJ.com reported on a bill moving through the New Jersey legislature that would create a one-strike rule for government contractors. If passed, the bill would create a permanent bar preventing a person convicted of second-degree government fraud from ever again serving as a “key employee” in a company that holds government contracts. The bill would only apply to higher-level employees, a group that ranges from C-level executives, presidents, and vice-presidents to directors and supervisory managers. The focus is on decision-makers and it does not impact the day-to-day employees who may be “caught up” in a fraudulent contracting scheme. Under the proposed legislation, New Jersey’s state treasurer would be tasked with maintaining an online list of those individuals who are subject to the permanent ban. Companies in the state would have to provide a written certification stating they do not employ any of the named individuals before being allowed to receive a government contract.