False Claims Act lawyer

August 15, 2016

Lessons from a False Claims Act Ruling on Medicare Pricing and the “Usual and Customary” Price

We pride ourselves on our work helping whistleblowers bring claims pursuant to the False Claims Act. As a False Claims Act law firm, we have specialized knowledge of this complex piece of legislation that empowers individuals to bring fraud claims on behalf of the government. A ruling from a federal district court released in late Spring in a case alleging Medicare fraud looks at one of the many important details that come up in these cases. More specifically, the case looks at what constitutes a “usual and customary” price for purposes of determining whether a provider is complying with the law and offering Medicare beneficiaries an appropriate price on prescription drugs. In doing so, the court highlights one important requirement that is often subverted by perpetrators of fraud and also provides a reminder of how complex False Claims Act cases can be.

Background on the Garbe Case

On May 27, 2006, the Seventh Circuit Court of Appeals released an important ruling in United States ex rel. Garbe v. Kmart Corporation, a False Claims Act case brought by James Garbe on behalf of the United States against Kmart. According to the complaint, Garbe, a pharmacist at Kmart, noticed that another pharmacy charged his Medicare Part D insurer substantially less that Kmart typically charged insurers for the same prescription. He investigated and found that Kmart routinely charged customers paying out of pocket less than it charged those paying with insurance (public or private). He also found that most cash customers took part in Kmart’s “discount programs” and that this discount price was not included when Kmart calculated its “usual and customary” prices on generic medications for purposes of Medicare reimbursement.

August 8, 2016

Charges in an Allegedly Massive Scheme Highlight the Danger of Medicare Fraud

by Gregory J. Brod

Is Medicare fraud really that big of a problem? After all, doesn’t fraud exist in almost every sector of the economy? Why focus so much energy on one issue? As recently filed charges in one case show, Medicare fraud is an enormous problem that costs our government billions of dollars every year. Stealing from the government is, in essence, stealing from every single taxpayer. Medicare fraud diverts money from those who truly need and deserve health care services and puts the money in the pockets of wrongdoers. At the same time, there is also very specific, personal harm to patients whose providers are involved in fraudulent schemes, patients whose health is put in jeopardy because a provider puts profit over care.

DOJ Announces Allegations of Fraudulent Medicare Billing in Excess of $1 Billion

Late last month, Assistant Attorney General Leslie R. Caldwell publicly announced the unsealing of charges in what she called “the largest single criminal health care fraud case ever brought against individuals by the Department of Justice.” The case involves allegations of fraudulent billing that total over $1 billion. The allegations are focused on a group in South Florida, a region particularly hard hit by Medicare fraud.

July 11, 2016

Trends in False Claims Act Litigation: Individual Liability

by Gregory J. Brod

Regular readers of this blog know that part of what makes the False Claims Act such a powerful tool is its qui tam provision which allows individuals to bring claims for repayment on the government’s behalf. This is important because the government cannot police every single claim it pays and individuals who witness fraud and act on that knowledge are critical to the fight against fraud. A recent trend in litigation under the Act involves individuals in a very different sense – individual liability under the False Claims Act. Our whistleblowers’ law firm for fraud on the government is watching this trend and is prepared to help honest individuals fight fraud committed by both organizations and individuals.

DOJ Focuses in on Individual Liability for Corporate Wrongdoing

At the beginning of the year, Becker’s Hospital Review, a leader in healthcare industry information, published a piece entitled “5 False Claims Act Trends, Cases that will Fuel Recoveries in 2016.” One of the trends identified in this article is a “spotlight on individual liability” whereby the government is increasingly holding individuals, not just the companies they work for, liable for fraud. This stance grows, in part, out of a Department of Justice (“DOJ”) memorandum issued in September 2015 that discusses steps the DOJ is taking to increase legal accountability for individual corporate wrongdoing. One change announced in the memo is that corporations will only receive credit for cooperating with an investigation if they reveal the names of the individuals involved in the fraud.

May 16, 2016

Using the False Claims Act to Protect Funds for Cancer Patients

by Gregory J. Brod

Cancer. Rarely can one word strike so much fear. We have come so far in both cancer prevention and cancer treatment; yet we also have so much farther to go before we can truly say we’ve triumphed over this massive beast. One major challenge is the cost of treating cancer. While much of that cost is due to the challenges of medical research, some companies are deliberately over-charging cancer patients and their insurance providers by billing for expensive and unnecessary services. The battle against cancer treatment fraud is yet another example of a front in which the False Claims Act can be a tool for justice and even a tool for health. As a health care fraud law firm, we partner with whistleblowers to fight these wrongs and ensure health care funds are available for true medical needs.

Company Pays Nearly $34.7 Million to Settle Allegations of Overbilling for Cancer Treatment

Earlier this Spring, the Department of Justice (“DOJ”) announced that 21^st Century Oncology agreed to pay nearly $34.7 million to settle a False Claims Act lawsuit alleging they performed and billed federal health care agencies (e.g., Medicare, Tricare, Medicaid) for procedures that were not medically necessary. The underlying suit involved a procedure called the Gamma function which measures the exit dose radiating from an individual after radiation treatments. The government alleged that the company performed and billed for this procedure when it was not needed for any medically appropriate purpose. Additionally, the suit alleged that 21^st Century billed for Gamma function treatments in cases where no physician reviewed the results in a timely manner and in cases where technical equipment failures meant no results could be obtained. The suit was originally brought by a former physicist with a Florida oncology company who filed the claims under the whistleblower or qui tam provisions of the False Claims Act and who will receive over $7 million for his role in the case.

May 2, 2016

Another Major Settlement in a Pharmaceutical Industry Health Care Fraud Case

by Gregory J. Brod

We can tell you that the False Claims Act is a powerful tool for fighting the growing epidemic of health care fraud in the United States. We prefer, however, to show you by citing some of the biggest verdicts and settlements in the field. This week, we highlight a settlement involving allegations of Medicaid fraud in the pharmaceutical industry. As a Medicare and Medicaid fraud whistleblowers’ law firm, we help honest witnesses bring lawsuits in cases like this one to fight back against pharmaceutical company fraud and other cases of fraud against government health care programs.

Drug Company to Pay $784.6 Million to Settle Claims It Failed to Report Accurate Pricing Data and Underpaid Medicaid Drug Rebates

On April 27, the Department of Justice (“DOJ”) issued a press release announcing that Wyeth and Pfizer (Pfizer acquired Wyeth after the alleged conduct ended; defendants referred to collectively as “Wyeth”) have agreed to pay $784.6 million to settle a False Claims Act suit alleging Wyeth committed Medicaid fraud by reporting false prices on two of its medications. The complaint alleged that Wyeth gave thousands of hospitals deep discounts on two protein pump inhibitor drugs but failed to report these lower prices to the government. Allegedly, Wyeth used a bundled sales agreement to induce hospitals to purchase two of its drugs and place them on hospital formularies. The government believes Wyeth sought to control the hospital market in part because patients often stay on the drugs for a long time after discharge and payers, including Medicaid, would then end up paying nearly full price for the medications.

February 15, 2016

The Implied Certification Debate: A Major Issue in False Claims Act Litigation Pending Before the U.S. Supreme Court

by Gregory J. Brod

Last year, our health care fraud whistleblowers’ law firm reported on an important issue in the False Claims Act arena: implied certification. The implied certification theory has the potential to be a powerful tool in the fight against fraud and, when we last discussed the topic, the Fourth Circuit Court of Appeals had ruled in favor of the theory. However, there has been disagreement on the issue among the federal appellate courts and the issue is headed to the Supreme Court. We continue to believe in the implied certification theory and we are closely following the issue as it makes its way to the highest court in the land.

The Escobar Case

As Modern Healthcare recently reported, the implied certification theory is heading to the Supreme Court via the case of Universal Health Services v. United States ex rel Escobar. The case involves a claim filed by the parents of a teenager who died while under the care of a mental health clinic. The plaintiffs allege that the clinic’s staff was not properly supervised and that the clinic lacked required board-certified or board-eligible supervisory personnel. As the First Circuit wrote, “The crux of their complaint is that [Defendants’] alleged noncompliance with sundry supervision and licensure requirements rendered its reimbursement claims submitted to the state Medicaid agency actionably false under both the federal and Massachusetts False Claims Acts.”

January 11, 2016

The False Claims Act and the Health Care Fraud Fight in 2016

by Gregory J. Brod

The False Claims Act (“FCA” or “the Act”) is one of the most important tools we have in the fight against health care fraud and other frauds on the federal government. When an organization or individual knowingly takes more money from the government than the law allows or otherwise submits a false claim to the government, the FCA allows the government to recover triple damages plus an appropriate penalty. Examples of false claims include overcharging Medicare for medical treatment and supplying the military with goods that don’t meet contractual requirements. The Act has a special qui tam provision that allows individuals to act as whistleblowers and bring claims on the government’s behalf, a critical tool because fraud is difficult to uncover without help. Although the law provides whistleblowers with a substantial reward for their time and effort if their case leads to a recovery via either a settlement or judgment, most whistleblowers are motivated by a desire to do the right thing and our government fraud law firm is proud to help them.

Recently, we’ve looked back on the success of the FCA in 2015. Today, we look ahead at what 2016 may hold in the health care fraud arena, the sector responsible for the largest share of FCA recoveries in 2015. Becker’s Hospital Review, a leading journal for the health care industry, identifies the following five trends expected to fuel FCA recoveries in the coming year[1]:

Extrapolation – Extrapolation involves examining a sample of payment claims and applying the information learned to all similar claims filed by the same organization. This is a useful shortcut in cases alleging large-scale fraud. Defendants have contested (and will likely to continue to fight) the use of extrapolation claiming it unfairly lowers the government’s burden of proof, but courts have largely ruled in the government’s favor.

November 30, 2015

False Claims FAQ, Part One: Coverage and the Qui Tam Provision

by Gregory J. Brod

On a regular basis, we use this blog to discuss health care fraud, government contracts fraud, and a range of related issues that fall under the False Claims Act and similar pieces of legislation. In a two-part post, our government fraud whistleblower’s law firm is taking a step back to provide a broader look at this important law. Part One provides a general overview of the law and what it covers while Part Two (to be published in coming weeks) will look at how a suit unfolds and the importance of engaging a knowledgeable False Claims Act lawyer.

What does the False Claims Act (“FCA” or “the Act”) deal with?

In brief, the FCA is a federal law that provides remedies when an individual or entity files a fraudulent bill (the “claim”) with the federal government or one of its agencies. The FCA is not a “gotcha” statute and it does not apply in cases of genuine mistake. To be covered by the Act, the claim must be made knowingly and with deliberate ignorance or willful disregard for its false nature. While the FCA only applies to fraud on the federal government, many states have similar laws applicable to fraud on the state government.

November 9, 2015

Cheat the System, Pay the Price: Pursuing Those Who Knowingly Violate Medicare Rules

by Gregory J. Brod

There are few topics that will get people talking (and, inevitably, complaining) like health insurance. The truth of the matter is that, in order to function efficiently and provide the best possible care to the largest possible audience, health insurance companies must have rules and guidelines. Perhaps the context where this principle is most important is when the insurer is Medicare. According to a government memo published in July marking the program’s 50^th year, Medicare currently covers 55 million beneficiaries, an increase of 3 million beneficiaries from just three years ago. While coverage rules are sometimes unpopular, they exist for a reason and organizations that repeatedly bill and collect money in violation of Medicare coverage rules put the system and all who rely on it in jeopardy. The government cannot examine every claim in depth making health care fraud whistleblowers critical to protecting the system, one of the many reasons we are proud to serve as a Medicare fraud whistleblower’s law firm.

Settlement Resolves Allegations 450+ Hospitals Violated Medicare Guidelines for Cardiac Devices

On October 30, the Department of Justice (“DOJ”) announced that it had reached 70 related settlements totaling over $250 million dollars resolving allegations that 457 hospitals (listed in a separate document) in 43 states violated Medicare rules related to implantable cardiac devices. Most of the hospitals were named as defendants in a lawsuit filed under the False Claims Act (“FCA”) which contains a special qui tam provision allowing private whistleblowers to file claims on the government’s behalf. In this case, the original suit was filed by a cardiac nurse and a health care reimbursement consultant. Pursuant to the FCA, the whistleblowers received over $38 million from the settlement. While some might suggest that amount seems excessive, as the legal news website Lawyers and Settlements notes, “when the depth and breadth of the alleged healthcare fraud is factored in, it soon becomes clear the contributions of the two lead plaintiffs were integral in what has been described as one of the largest examples of alleged healthcare fraud, in terms of the number of defendants, in the history of the False Claims Act (FCA).”

October 5, 2015

Using the False Claims Act to Hold Financial Institutions Accountable for the Mortgage Crisis

by Gregory J. Brod

Mortgage lending may not be in the spotlight in 2015 to the same degree it was a few years ago, but it remains an important element of our economy and mortgage fraud was partially responsible for the recession that rocked the globe in the first decade of the millennium. Although many associate the False Claims Act (“FCA” or “the Act”) with health care fraud, its reach is much broader and includes certain forms of mortgage fraud. When banks grant federally insured/guaranteed mortgages that do not meet program requirements and the government has to pay out money due to a default, an FCA suit can be appropriate. As with other FCA claims, private citizens can play an important role in these actions by sharing information about suspected fraud and partnering with our mortgage fraud whistleblower’s lawyer to hold financial institutions responsible for the consequences of granting risky loans.

$212.5 Million Settlement in Mortgage Fraud Case

On June 1, the Justice Department (“DOJ”) issued a press release detailing a recent False Claims Act settlement in the mortgage fraud arena. As background, the press release explains that First Tennessee Bank (along with its affiliates and successors) participated in the FHA Direct Endorsement Lender (“DEL”) program from January 2006 through October 2008. Pursuant to the DEL program, neither the Federal Housing Administration (“FHA”) mortgage nor the Department of Housing and Urban Development (“HUD”) reviewed program loans, instead relying on First Tennessee to follow program rules and self-report any deficiencies.