qui tam lawsuit

U.S. Govt Files Lawsuit Against PharMerica for False Claims Act Violations

Submitted by mma on August 28, 2013
August 28, 2013

The U.S. government has filed suit against PharMerica Corp. for violations of the False Claims Act and the Controlled Substances Act by dispensing controlled drugs without valid prescriptions and knowingly submitting or causing the submission of false claims to be submitted to the Medicare program, the U.S. Department of Justice announced earlier this month.  The lawsuit was filed in the U.S. District Court for the Eastern District of Wisconsin.

PharMerica is a long-term care pharmacy that dispenses drugs to residents of long-term care facilities, including nursing homes and skilled nursing facilities. PharMerica services approximately 300,000 residents of long-term care facilities and fills approximately 40 million prescriptions annually.   Many of the prescriptions filled by PharMerica are for controlled substances listed in Schedule II under the Controlled Substances Act.   Schedule II drugs, such as oxycodone and fentanyl, can cause significant harm if used improperly and have a high potential for abuse.

The government’s complaint alleges that PharMerica routinely dispensed Schedule II controlled drugs in non-emergency situations without first obtaining a written prescription from a treating physician.    PharMerica’s alleged actions violated both the spirit and the letter of the Controlled Substances Act by enabling nursing home staff to order narcotics, and pharmacists to dispense narcotics, before confirming that a physician had made a medical judgment about whether these narcotics were necessary and should be used by the resident.  The complaint alleges that PharMerica knowingly caused the submission of false claims to Medicare for these improperly dispensed Schedule II drugs, in violation of the False Claims Act.

The lawsuit was originally filed by Jennifer Denk, a former PharMerica employee, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private citizens with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  The government may intervene on its own behalf, which it has elected to do in this case.  Denk’s suit was later consolidated with a subsequent complaint filed by Eric Beeders and Lesa Martino.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

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Judgment Entered Against Dr. Malik and Advanced Nuclear Diagnostics for $17M

Submitted by mma on August 27, 2013
August 27, 2013

The U.S. District Court for the District of Columbia has entered judgment for more than $17 million against Dr. Ishtiaq Malik and his two companies, Ishtiaq Malik M.D., P.C. and Advanced Nuclear Diagnostics, for submitting false nuclear cardiology claims to federal and state health care programs, the U.S. Department of Justice announced last month.

The government’s allegations focused on Dr. Malik’s inappropriate claims for myocardial perfusion studies, commonly referred to as nuclear stress tests, which are used to determine whether a patient has heart disease. The test is usually performed in two separate phases: stress and rest. The two phases, which can be conducted on the same day or separate days, must be billed as one test. The government alleged that, contrary to these requirements, Dr. Malik and his companies double-billed for multi-day nuclear stress tests.

The government alleged that Dr. Malik submitted false claims to Medicare, District of Columbia Medicaid, Maryland Medicaid, TRICARE and the Federal Employees Health Benefits Plan. In addition, the government alleged that Dr. Malik and his companies billed for services not performed as well as services already included in the payment for nuclear stress test codes, such as intravenous injections, drug infusions, 3D rendering and drug administration.

The government filed suit against Dr. Malik and his two companies under the False Claims Act, which allows the government to recover three times its damages, plus penalties, from those who submit false claims for federal funds. The state of Maryland and the District of Columbia subsequently joined the lawsuit under their respective state false claims acts.  Private citizens with knowledge of fraud against the government can also sue on the government’s behalf and claim a share in the recovery.

The Obama administration has made a priority of preventing fraud and recovering losses, resulting in record recoveries for two years in a row.  Fiscal year 2011 saw $3 billion recovered in False Clams Act cases, with $2.4 billion of that being cases of fraud committed against federal health care programs.  Fiscal year 2012 saw $5 billion recovered in False Claims Act cases, with over $3 billion of that stemming from health care fraud cases.  In both years, a vast majority of the cases were initiated by lawsuits filed by private citizens under the qui tam, or whistleblower, provisions of the False Claims Act. A record 647 qui tam cases were filed last fiscal year.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

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Northwestern to Pay $3M to Settle Grant Fraud Claims; Whistleblower to Get $498K

Submitted by mma on August 23, 2013
August 23, 2013

Northwestern University has agreed to pay the United States government $2.93 million to resolve allegations of cancer research grant fraud committed by a former researcher and physician at the university’s Robert H. Lurie Comprehensive Center for Cancer in Chicago, the U.S. Department of Justice announced last month. 

Northwestern allegedly allowed one of its researchers, Dr. Charles L. Bennett, to submit false claims under research grants from the National Institutes of Health. Dr. Bennett allegedly submitted improper claims for reimbursement for professional and consulting services, subcontracts, food, hotels, travel and other expenses that benefited Dr. Bennett, his friends, and family, including family trips, meals and hotels for himself and friends, and “consulting fees” for unqualified friends and family members, including his brother and cousin. At Dr. Bennett’s request, Northwestern also allegedly improperly subcontracted with various universities for services that were paid for by the NIH grants.

The lawsuit was originally filed by Melissa Theis, a former employee at Northwestern’s Feinberg School of Medicine, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private citizens with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Theis will receive $498,100 as her share of the settlement.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

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Dubuis to Settle Medicare Fraud Claims for $8M; Whistleblower to Get $2.16M

Submitted by mma on August 22, 2013
August 22, 2013

Dubuis Health System and Southern Crescent Hospital for Specialty Care, Inc. (Southern Crescent) have agreed to pay $8 million to resolve allegations that the companies knowingly submitted or caused the submission of false claims to Medicare, the U.S. Department of Justice announced last month.  Dubuis Health System manages long-term acute care hospitals in multiple states, including Southern Crescent.  Southern Crescent is a long-term acute care hospital located in Riverdale, GA and is part of the CHRISTUS Health System. 

Long term acute care hospitals are certified to focus on patients with more complex medical needs who, on average, remain in the hospital more than 25 days, and receive a higher rate of Medicare reimbursement than typical acute care hospitals.  This settlement resolves allegations that between 2003 and 2009, Dubuis Health System and Southern Crescent knowingly kept patients hospitalized beyond the time considered to be medically necessary, to increase their Medicare reimbursement and to maintain Southern Crescent’s classification as a long-term acute care facility.

The allegations were originally made in a lawsuit filed by Darlene Tucker, a former administrator at Southern Crescent, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private citizens with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Tucker will receive $2.16 million as her share of the settlement.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

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HPH Hospice Settles Healthcare Fraud Claims for $1M; Whistleblowers to Get $250K

Submitted by mma on August 14, 2013
August 14, 2013

Florida-based HPH Hospice agreed to pay $1 million to resolve allegations that the company knowingly submitted or caused the submission of false claims to Medicare and Medicaid, the U.S. Department of Justice announced last month.

The Medicare hospice benefit is available for patients who have a life expectancy of six months or less if their disease runs its normal course.  Patients admitted to a hospice stop receiving care to treat their illnesses and instead receive medical care focused on providing them with relief from the symptoms, pain, and stress of a terminal illness.  Medicare reimburses for different levels of hospice care.

HPH Hospice allegedly submitted false Medicare and Medicaid claims for patients who did not need end of life care.  The government alleged that HPH Hospice caused staff to admit ineligible patients in order to meet targets imposed by management, adopted procedures to delay and discourage staff from discharging patients who were not appropriate for hospice services, instructed staff to make false or misleading statements in patients’ medical records to make them appear eligible when they were not, and failed to implement an adequate compliance program that might have corrected these problems.

The settlement also resolved allegations that HPH Hospice billed the government at higher reimbursement rates than it was entitled to receive and provided illegal kickbacks in the form of free services to skilled nursing facilities in exchange for patient referrals.

HPH Hospice has also agreed to enter into a Corporate Integrity Agreement with the Inspector General of the Department of Health and Human Services that provides for procedures and reviews to be put in place to avoid and detect conduct similar to that which gave rise to the settlement.

The lawsuit was originally filed by Heather Numbers and Greg Davis, former HPH Hospice employees, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private citizens with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Numbers and Davis will collectively receive $250,000 as their share of the settlement.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

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Park Avenue Medical Associates Settles Medicare Fraud Claims for $1M

Submitted by mma on August 5, 2013
August 5, 2013

New York-based Park Avenue Medical Associates, P.C., Park Avenue Health Care Management LLC, and Park Avenue Health Care Management, Inc. (collectively “PAMA”) have agreed to pay $1 million to resolve allegations that the companies knowingly submitted or caused the submission of false claims to Medicare, the U.S. Department of Justice announced last month.

Medicare prohibits payment for services that are not “reasonable and necessary” for the diagnosis or treatment of an illness or injury, as well as payment for any claim without adequate documentation substantiating the reasonableness and necessity of the services provided.  In particular, Medicare does not cover psychotherapy services rendered to patients with Alzheimer’s disease or dementia unless the patient’s dementia is mild, the patient has the capacity to recall what occurred at the therapy from one session to the next, and that capacity is documented in the patient’s record.  Psychotherapy services are not covered when dementia has produced a severe enough cognitive defect to prevent psychotherapy from being effective. In addition, Medicare provides that psychiatric diagnostic examinations are covered only once for each episode of illness or suspected illness in a patient.

In violation of Medicare policies, as well as its own policies, PAMA provided psychotherapy to patients who, because of their severe dementia, lacked the capacity to benefit from it.  In addition, PAMA billed for psychiatric evaluations that were duplicative, failed to comply with Medicare rules, and reflected a lack of coordination of care both among PAMA’s own psychiatrists, psychologists and nurses, and between PAMA’s employees and staff at the facilities at which PAMA performed services.

PAMA also entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services Office of the Inspector General, in order to ensure future compliance with Medicare laws and regulations.

The lawsuit was originally filed by Zachary Wolfson, a former PAMA employee, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private citizens with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Wolfson’s share of the settlement has yet to be determined.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

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U.S. Intervenes in Medicare Fraud Suit Against Fla. Home Health Provider

Submitted by mma on August 2, 2013
August 2, 2013

The government will intervene in a whistleblower lawsuit against Florida-based A Plus Home Health Care, Inc. and its owner, Tracy Nemerofsky, the U.S. Department of Justice announced last month.  A Plus allegedly offered referring physicians’ spouses sham marketing positions with the company to induce the physicians to refer Medicare patients for its home health care services.

The government alleges that, beginning in 2006, A Plus engaged in a scheme to increase Medicare referrals by hiring at least seven physicians’ spouses and one physician’s boyfriend to perform marketing duties but required them to perform few, if any, actual job duties.  The spouses’ and boyfriend’s salaries were allegedly an inducement and reward for the physicians’ referrals of Medicare patients to A Plus.  To cover up the scheme, the government alleges, Ms. Nemerofsky generated sham personnel files, which included lists of job duties that the spouses and boyfriend never performed, and performance reviews of tasks the spouses and boyfriend never completed, to give the false impression that the spouses and boyfriend were legitimate employees.

The lawsuit was originally filed by William Guthrie, a former A Plus director of development, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private citizens with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  The government may then choose to intervene, as it elected to do in this case.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

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Judge Boosts UTC’s Penalty to $664M From $473M

Submitted by mma on July 29, 2013
July 29, 2013

A federal judge increased United Technologies Corp.’s False Claims Act penalties by 40 percent, to $664.4 million, Reuters reported earlier this month.  Last month, Connecticut-based UTC was found liable for $473 million in damages and penalties arising from a contract with the U.S. Air Force for fighter aircraft engine, the highest recovery ever obtained by the government in a False Claims Act case.

United Technologies allegedly proposed prices for the engine contract that misrepresented how the company calculated those prices.  Specifically, the government alleged that United Technologies failed to include in its price proposal historical discounts that it received from suppliers, and instead knowingly used outdated information that excluded such discounts.  As a result, the government paid hundreds of millions more than it otherwise would have paid for the engines.

The U.S. Department of Justice requested the increase, in order to reflect interest on the $473 million judgment.  Interest rates on the award varied from 6 percent to 8 percent per year, and the interest imposed dated back to 1986.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

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Shredding Companies Settle Contract Fraud Claims for $1.1M

Submitted by mma on July 26, 2013
July 26, 2013

Two of the country’s largest commercial shredding services companies, Shred-It Incorporated and Iron Mountain, recently agreed to pay $1.1 million between them to settle allegations that the companies knowingly submitted or caused the submission of false claims to the federal government, related to contracts for secure shredding services, the U.S. Department of Justice announced this month.

According to the complaint (see below), Iron Mountain and Shred-It obtained government contracts to provide document-shredding services under certain terms, including that documents be shredded to a very secure size not exceeding 1/32 inch in width with a 1/64-inch tolerance by 1/2 inch in length.  (The smaller the shred size, the more secure the shredded document is against unauthorized attempts to reconstruct it.)  However, the defendants allegedly did not even possess equipment that could shred documents to the secure shred size that was agreed to in the contract.  Furthermore, the defendants allegedly obtained additional revenue by reselling the improperly shredded documents to paper recyclers.

The lawsuit was originally filed by Douglas Knisely, the owner and operator of a small, family-owned secure shredding business, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private citizens with knowledge of fraud against the government to sue on behalf of the government and claim a share in the recovery.  Knisely’s share of the settlement has yet to be determined.

A third defendant, Cintas Corporation, continues to contest the allegations.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

PDFs: 
application/pdf icondouglas_knisely_qui_tam_complaint.pdf
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$1.8M Award to be Paid to SAIC Contract Fraud Whistleblower

Submitted by mma on July 25, 2013
July 25, 2013

Whistleblower Richard Priem will receive $1.8 million as his share of the Science Applications International Corporation (SAIC) settlement with the U.S. government, the Associated Press reported recently.

SAIC received federal grant money through the New Mexico Institute of Mining and Technology to provide course management, development, and instruction to first responder personnel to prevent and respond to terrorist attacks involving explosive devices.  The government alleged that SAIC’s cost proposals falsely represented that SAIC would use far more expensive personnel to carry out its efforts than it actually did use, resulting in inflated charges to the United States.

The U.S. Department of Justice announced in June that SAIC would settle the allegations for $11.75 million.

According to Priem, a former project manager for SAIC, high-level executives at the company were aware of the billing issues and worried about being caught.

Priem initiated the lawsuit under the whistleblower provisions of the False Claims Act.  Under the False Claims Act, a private citizen with knowledge of fraud against the government can sue on behalf of the government and share in the recovery. 

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

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