Articles Tagged with False Claims Act whistleblowers’ litigation

daan-stevens-282446-copy-300x191Michael Mirando, 40, previously a resident of Aliso Viejo, CA, was found guilty in May of 2017 on 15 counts of health care fraud. It took a federal jury less than half an hour to reach a verdict following the trial. At the end of October, Mirando was sentenced to eight years in prison and $3 million in restitution. Mirando’s current home in Portland is also being forfeited to the authorities since he admitted it was purchased by the financial proceeds of the fraud.

Medical Facility Owner Submits False Bills

Mirando owned Holter Labs, which offered patients cardiac monitoring services using what was called a Holter monitor. It is an ambulatory electrocardiography device, also known as an EKG device that can be used while a patient walks and performs normal activities. Holter Labs would provide these devices to physicians who then prescribed the devices to patients in order to monitor their heart rates for 24 to 48 hours. Mirando would bill the patients’ insurance companies for the day or two of use of the device. However, at the same time, he would tack on additional services that were not ordered or provided, like 30-day EKG tests, brain scans, and oxygen studies.

rhema-kallianpur-275251-copy-300x200To encourage private citizens to come forward regarding fraud against the government, qui tam cases entitle the citizen, also called the relator, to a portion of any settlement or jury award that arises from his or her evidence and allegations. Individuals can bring qui tam cases under the federal False Claims Act when there is fraud against the federal government or can sue under a state-specific false claims act when the fraud is against the state. However, this award has sometimes led individuals to move forward qui tam suits for profit and not altruistic motives. There may be an even more profound issue when attorneys act as both the relator in a qui tam suit and their own lawyer.

Attorney-Relator Cannot Benefit Twice in Qui Tam Suit in Illinois

This issue came up in Illinois when an attorney brought hundreds of qui tam suits against retailer My Pillow Inc. for failing to collect and remit tax on products sold in Illinois. The attorney acted as both the relator in the suit as well as the attorney. This meant the attorney not only received a portion of the judgment against the company, but he also asked for attorney’s fees.

scotusThe False Claims Act (“FCA” or “the Act”) is a powerful tool that allows private citizens to play a key role in fighting fraud on the federal government.  As we have reported in previous blog posts, this term the Supreme Court agreed to look at a disagreement among appellate courts regarding the issue known as implied certification.  Our whistleblowers’ law firm is pleased to report that the Court recently released a decision that affirms and strengthens the Act, ensuring it is available to fight a wide range of fraudulent acts.

Background: The Implied Certification Theory and the Escobar Case

As explained in The False Claims Act: A Primer, a guide released by the Department of Justice (“DOJ”), a person violates the FCA when they knowingly submit a false claim for payment to the government, knowingly cause another to submit a false claim, or knowingly create a false record/statement in order to induce the government to pay a false claim.  The Act was originally passed during the Civil War.  It underwent substantial revisions in the 1980s and again in 2009 and 2010.

Last year, our health care fraudcourthouse 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.”

longgavelIn the previously published Part One of this FAQ (link provided below), we looked at the False Claims Act (“FCA” or “the Act”) and discussed its coverage and enforcement.  This concluding section of the two-part series focuses on the role of whistleblowers in False Claims Act cases and how our False Claims Act whistleblowers’ attorney can help these honest people step forward to join the fight against fraud.

  • What happens after I file a whistleblower’s lawsuit?

Qui tam lawsuits (the legal term for suits filed by private citizens on the government’s behalf) under the FCA are filed under seal which essentially means they are kept secret.  The claim and a written disclosure of the information on which it is based must be served on the appropriate U.S. Attorney and the Attorney General.  From the time of filing, the government has 60 days to investigate the claim, although it can (and often does) ask for an extension if necessary.  Notably, the defendant is not informed until this investigation is complete.

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.

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.

No matter how long we serve as a law firm for Medicare fraud matters, we continue to be appalled by the nature of these crimes.  These crimes often involve more than just shifting money into the perpetrators’ wallets.  Medicare fraud often directly impacts the care beneficiaries receive or, in some cases, the care they don’t receive.  We are also disturbed by the number of people involved in certain frauds like the wide-ranging scheme to profit from prescribing unneeded medications to nursing home residents.  While there are often more active participants than we’d like to imagine (i.e. more people willing to risk others’ well-being for profit), many more are silent observers.  It is these individuals who have the most power when it comes to fighting fraud – they can become the whistleblowers in False Claims Act whistleblower litigation.

A Drug Marketing Scheme Involving Numerous Companies and Individuals

Earlier this year, The Kentucky Center for Investigative Reporting examined a plot to profit from using pushing the (over)use of certain medications by nursing home residents.  To understand the schemes, one needs to know that specialized companies operate nursing pillcuphome pharmacies.  These providers, including PharMerica and Omnicare “occupy a strategic place in the flow of drugs to nursing home patients,” buying medications from pharmaceutical manufacturers and often repackaging them in foil packs referred to as “bingo cards” before dispensing them to nursing home residents via the company’s consulting pharmacists.