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Energy & Process Corp. Agrees to Pay $4.6M for False Contract Claims; Whistleblower Award TBD

Submitted by mma on May 24, 2017
May 24, 2017
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Energy & Process Corporation (E&P) of Tucker, Georgia, has agreed to pay $4.6 million to resolve the government’s lawsuit filed under the False Claims Act alleging that it knowingly failed to perform required quality assurance procedures and supplied defective steel reinforcing bars (rebar) in connection with a contract to construct a Department of Energy (DOE) nuclear waste treatment facility, the U.S. Department of Justice announced last month.

The lawsuit alleged that the DOE paid E&P a premium to supply rebar that met stringent regulatory standards for the Mixed Oxide Fuel Fabrication and Reactor Irradiation Services facility in the DOE’s Savannah River site near Aiken, South Carolina, but that E&P failed to perform most of the necessary quality assurance measures, while falsely certifying that those requirements had been met. The lawsuit further alleged that one-third of the rebar supplied by E&P and used in the construction was found to be defective. E&P subsequently replaced some of the defective rebar. The $4.6 million to be paid by E&P to resolve the government’s False Claims Act lawsuit is in addition to the replacement costs incurred by E&P.

The allegations resolved by this settlement arose in part from a whistleblower lawsuit filed under the False Claims Act by Deborah Cook, a former employee of the prime contractor that subcontracted with E&P in the course of building the DOE facility. Under the False Claims Act, private citizens can sue for false claims on behalf of the government and share in any recovery. The act permits the government to intervene and file its own complaint in such lawsuits, as it did in this case. Cook’s share of the settlement has not been 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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Quest Diagnostics to Pay $6M to Settle False Claims Allegations; Whistleblower Award TBD

Submitted by mma on May 3, 2017
May 3, 2017
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Quest Diagnostics Inc. has agreed to pay $6 million to resolve a lawsuit by the United States alleging that Berkeley HeartLab Inc., of Alameda, California, violated the False Claims Act by paying kickbacks to physicians and patients to induce the use of Berkeley for blood testing services and by charging for medically unnecessary tests, the U.S. Department of Justice announced last month. Quest, which is headquartered in Madison, New Jersey, acquired Berkeley in 2011, and ended the conduct that gave rise to the settlement.

Physicians refer their patients to independent laboratories like Berkeley to conduct tests on blood samples. According to the government’s complaint, Berkeley paid kickbacks to referring physicians disguised as "process and handling" fees. The complaint also alleged that Berkeley paid kickbacks to patients by routinely waiving copayments owed by certain patients who were legally required to pay for part of their tests. Allegedly, Berkeley paid the kickbacks to induce both the physicians and patients who received them to choose Berkeley over other laboratories. The government’s complaint further alleged that these illegal practices resulted in medically unnecessary cardiovascular tests being charged to federal healthcare programs.

The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by federally funded programs. The Anti-Kickback Statute is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and is instead based on the best interests of the patient. The Anti-Kickback Statute also prohibits routinely waiving patient copayments to ensure that patients are appropriately incentivized to refuse unnecessary tests.

The lawsuit was initially filed by Dr. Michael Mayes under the qui tam, or whistleblower, provisions of the False Claims Act. Under the act, private citizens can bring suit on behalf of the government for false claims and share in any recovery. The act permits the United States to intervene in and take over a whistleblower suit. The United States partially intervened in this and two related actions on March 31, 2015, and is continuing to pursue claims against the remaining defendants: Latonya Mallory, the former CEO of Health Diagnostics Laboratory Inc., and marketing company BlueWave Healthcare Consultants Inc. and its owners, Floyd Calhoun Dent III and Robert Bradford Johnson. Dr. Mayes’ share of the settlement with Quest has not been 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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Energy & Process Corp. to Pay $4.6M for Alleged False Contract Claims; Whistleblower Award TBD

Submitted by mma on April 25, 2017
April 25, 2017
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Energy & Process Corporation (E&P) of Tucker, Georgia, has agreed to pay $4.6 million to resolve the government’s lawsuit filed under the False Claims Act alleging that it knowingly failed to perform required quality assurance procedures and supplied defective steel reinforcing bars (rebar) in connection with a contract to construct a Department of Energy (DOE) nuclear waste treatment facility, the U.S. Department of Justice announced yesterday.

The lawsuit alleged that the DOE paid E&P a premium to supply rebar that met stringent regulatory standards for the Mixed Oxide Fuel Fabrication and Reactor Irradiation Services facility in the DOE’s Savannah River site near Aiken, South Carolina, but that E&P failed to perform most of the necessary quality assurance measures, while falsely certifying that those requirements had been met. The lawsuit further alleged that one-third of the rebar supplied by E&P and used in the construction was found to be defective. E&P subsequently replaced some of the defective rebar. The $4.6 million to be paid by E&P to resolve the government’s False Claims Act lawsuit is in addition to the replacement costs incurred by E&P.

The allegations resolved by this settlement arose in part from a whistleblower lawsuit filed under the False Claims Act by Deborah Cook, a former employee of the prime contractor that subcontracted with E&P in the course of building the DOE facility. Under the False Claims Act, private citizens can sue for false claims on behalf of the government and share in any recovery. The act permits the government to intervene and file its own complaint in such lawsuits, as it did in this case. Cook’s share of the settlement has not been 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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CA Inc. Settles False Contract Claims for $45M; Whistleblower to Get $10M

Submitted by mma on April 5, 2017
April 5, 2017
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CA Inc. (CA) has agreed to pay $45 million to resolve allegations under the False Claims Act that it made false statements and claims in the negotiation and administration of a General Services Administration (GSA) contract, the Department of Justice announced earlier this month.  CA is an information technology management software and services company headquartered in New York, New York. 

The settlement resolves allegations related to a GSA contract awarded to CA for software licenses and maintenance services.  Under Multiple Award Schedule (MAS) contracts like this one, GSA pre-negotiates prices and contract terms for subsequent orders by federal agencies.  At the time of CA’s contract, contractors were required to fully and accurately disclose to GSA how they conducted business in the commercial marketplace so that GSA could use that information to negotiate a fair price for government agencies using the GSA contract to purchase CA products and services.  The contract also contained a price reduction clause that set forth when the contractor had to reduce the prices it charged to the government if its prices to commercial customers improved.  

This settlement resolves allegations that CA did not fully and accurately disclose its discounting practices to GSA contracting officers.  Specifically, the agreement resolves claims that CA provided false information about the discounts it gave commercial customers for its software licenses and maintenance services.  Additionally, the settlement resolves claims that CA violated the price reduction clause in the contract by not providing government customers with additional discounts when commercial discounts improved.  

The allegations against CA were first made in a whistleblower lawsuit filed under the False Claims Act by Dani Shemesh, a former employee of CA Software Israel LTD.  Under the False Claims Act, private individuals can sue on behalf of the government and share in any recovery.  The False Claims Act also allows the government to intervene and take over the action, as it did, in part, in this case.  Shemesh’s share of the settlement is $10.195 million.

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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TeamHealth Holdings Settles False Healthcare Claims for $60M; Whistleblower to Get $11.4M

Submitted by mma on February 22, 2017
February 22, 2017
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TeamHealth Holdings, as successor in interest to IPC Healthcare Inc., f/k/a IPC The Hospitalists Inc. (IPC), has agreed to resolve allegations that IPC violated the False Claims Act by billing Medicare, Medicaid, the Defense Health Agency and the Federal Employees Health Benefits Program for higher and more expensive levels of medical service than were actually performed (a practice known as “up-coding”), the Department of Justice announced earlier this month. Under the settlement agreement, TeamHealth has agreed to pay $60 million, plus interest.

The government contended that IPC knowingly and systematically encouraged false billings by its hospitalists, who are medical professionals whose primary focus is the medical care of hospitalized patients. Specifically, the government alleged that IPC encouraged its hospitalists to bill for a higher level of service than actually provided. IPC’s scheme to improperly maximize billings allegedly included corporate pressure on hospitalists with lower billing levels to “catch up” to their peers.

As part of the settlement, TeamHealth entered into a five-year Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) covering the company’s hospital medicine division. This CIA is designed to increase TeamHealth’s accountability and transparency so that the company will avoid or promptly detect future fraud and abuse.

The settlement resolves allegations filed in a lawsuit by Dr. Bijan Oughatiyan, a physician formerly employed by IPC as a hospitalist. The lawsuit was filed in a federal court in Chicago, Illinois, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The Act also allows the government to intervene and take over the action, as it did in this case. Mr. Oughatiyan will receive approximately $11.4 million.

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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MedStar Ambulance Pays $12.7M for False Medicare Claims; Whistleblower to Get $3.5M

Submitted by mma on February 7, 2017
February 7, 2017
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Medstar Ambulance Inc., including four subsidiary companies and its two owners, Nicholas and Gregory Melehov, have agreed to pay $12.7 million to resolve allegations that the Massachusetts-based ambulance company knowingly submitted false claims to Medicare, the Department of Justice announced last month.

The settlement resolves allegations that Medstar submitted false claims to Medicare for ambulance transport services. Specifically, the United States alleged that Medstar routinely billed for services that did not qualify for reimbursement because the transports were not medically reasonable and necessary, billed for higher levels of services than were required by patients’ conditions, and billed for higher levels of services than were actually provided.

As part of the settlement, Medstar has agreed to a corporate integrity agreement with the U.S. Department of Health and Human Services (HHS).

The allegations were filed in a lawsuit by Dale Meehan, a former employee in Medstar’s billing office, under the whistleblower provisions of the False Claims Act. Those provisions allow private individuals to sue on behalf of the United States and to share in the proceeds of any settlement or judgment. Meehan will receive approximately $3.5 million.

As part of the settlement today, Medstar has agreed to a corporate integrity agreement with the U.S. Department of Health and Human Services (HHS).

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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Shire Pharmaceuticals Settles False Claims for $350M; Whistleblower Awards TBD

Submitted by mma on January 13, 2017
January 13, 2017
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Shire Pharmaceuticals LLC and other subsidiaries of Shire plc (Shire) will pay $350 million to settle federal and state False Claims Act allegations that Shire and the company it acquired in 2011, Advanced BioHealing (ABH), employed kickbacks and other unlawful methods to induce clinics and physicians to use or overuse its product “Dermagraft,” a bioengineered human skin substitute approved by the FDA for the treatment of diabetic foot ulcers, the U.S. Department of Justice announced earlier this week. Shire plc is a multinational pharmaceutical firm headquartered in Ireland, with its United States operational headquarters in Lexington, Massachusetts. Shire sold the assets associated with Dermagraft in early 2014.

The settlement resolves allegations that Dermagraft salespersons unlawfully induced clinics and physicians with lavish dinners, drinks, entertainment and travel; medical equipment and supplies; unwarranted payments for purported speaking engagements and bogus case studies; and cash, credits and rebates, to induce the use of Dermagraft. The Anti-Kickback Statute prohibits, among other things, the payment of remuneration to induce the use of medical devices covered by Medicare, Medicaid and other federally-funded health care programs, including the Department of Veterans Affairs (VA). Claims filed in violation of the Anti-Kickback Statute are considered false or fraudulent under the False Claims Act. In addition, the Anti-Bribery statute and the Federal Acquisition Regulations prohibit bribes to government officials or employees, including VA physicians, to obtain a contract or favorable treatment under a supply contract. The United States alleged that as a result of their violation of these provisions, ABH and Shire submitted or caused to be submitted to federally-funded health care programs hundreds of millions of dollars of false claims for Dermagraft.

In addition to the kickback allegations, the settlement also resolved allegations that Shire and its predecessor ABH unlawfully marketed Dermagraft for uses not approved by the FDA, made false statements to inflate the price of Dermagraft, and caused improper coding, verification, or certification of Dermagraft claims and related services.

The allegations resolved by the settlement were brought in six lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims and to receive a share of any recovery. The whistleblower shares to be awarded in this case have not yet been 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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Bechtel and AECOM Settle False Claims for $125M; Whistleblower Award TBD

Submitted by mma on December 20, 2016
December 20, 2016
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Bechtel National Inc., Bechtel Corp., URS Corp. (predecessor in interest to AECOM Global II LLC) and URS Energy and Construction Inc. (now known as AECOM Energy and Construction Inc.) have agreed to pay $125 million to resolve allegations under the False Claims Act that they made false statements and claims to the Department of Energy (DOE) by charging DOE for deficient nuclear quality materials, services, and testing that was provided at the Waste Treatment Plant (WTP) at DOE’s Hanford Site near Richland, Washington, the U.S. Department of Justice announced last month.  The settlement also resolves allegations that Bechtel National Inc. and Bechtel Corp. improperly used federal contract funds to pay for a comprehensive, multi-year lobbying campaign of Congress and other federal officials for continued funding at the WTP. 

DOE has paid billions of dollars to the defendants to design and build the WTP, which will be used to treat dangerous radioactive wastes that are currently stored at DOE’s Hanford Site.  The contract required materials, testing and services to meet certain nuclear quality standards.  The United States alleged that the defendants violated the False Claims Act by charging the government the cost of complying with these standards when they failed to do so.  In particular, the United States alleged that the defendants improperly billed the government for materials and services from vendors that did not meet quality control requirements, for piping and waste vessels that did not meet quality standards and for testing from vendors who did not have compliant quality programs.  The United States also alleged that Bechtel National Inc. and Bechtel Corp. improperly claimed and received government funding for lobbying activities in violation of the Byrd Amendment, and applicable contractual and regulatory requirements, all of which prohibit the use of federal funds for lobbying activities.

The allegations resolved by this settlement were initially brought in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act by Gary Brunson, Donna Busche, and Walter Tamosaitis, who worked on the WTP project.  The False Claims Act permits private parties to sue on behalf of the United States when they believe that a party has submitted false claims for government funds, and to receive a share of any recovery.  The Act also permits the government to intervene in such a lawsuit, as it did in part in this case.  The whistleblowers’ reward has not yet been 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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Biocompatibles to Pay $36M to Resolve False Claims; Whistleblower to Get $5.1M

Submitted by mma on December 13, 2016
December 13, 2016
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Pennsylvania-based medical device manufacturer Biocompatibles Inc., a subsidiary of BTG plc, pleaded guilty today to misbranding its embolic device LC Bead and will pay more than $36 million to resolve criminal and civil liability arising out of its illegal conduct, the Justice Department announced last month. LC Bead is used to treat liver cancer, among other diseases.

Under the terms of the plea agreement before the U.S. District Court for the District of Columbia, Biocompatibles pleaded guilty to a misdemeanor charge in connection with the company’s misbranding of LC Bead, in violation of the Food, Drug and Cosmetic Act.  LC Bead was cleared by the U.S. Food and Drug Administration (FDA) as an embolization device that can be placed in blood vessels to block or reduce blood flow to certain types of tumors and arteriovenous malformations.  LC Bead has never been cleared or approved by FDA as a drug-device combination product or for use as a drug-delivery device or “drug-eluting” bead.  As part of the criminal resolution, Biocompatibles will pay an $8.75 million criminal fine for the misbranding of LC Bead and a criminal forfeiture of $2.25 million. 

n addition, Biocompatibles will pay $25 million to resolve civil allegations under the False Claims Act that the company caused false claims to be submitted to government healthcare programs for procedures in which LC Bead was loaded with chemotherapy drugs and used as a drug-delivery device.  When LC Bead was combined with prescription drugs for use as a drug-eluting bead, it constituted a new combination drug-device product that was not approved or cleared by the FDA and not covered by Medicare and other federal health care programs.  The federal share of the civil settlement is approximately $23.6 million, and the state Medicaid share of the civil settlement is approximately $1.4 million. 

The civil settlement with Biocompatibles resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery.  The civil lawsuit was filed in the Western District of Texas and is captioned United States ex rel. Ryan Bliss v. Biocompatibles, Inc., et al.  As part of today’s resolution, Bliss will receive approximately $5.1 million from the civil 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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Best Choice Settles False Medicaid Claims for $1.8M; Whistleblower to Get $43K

Submitted by mma on November 29, 2016
November 29, 2016
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Kansas-based Best Choice Home Health Care Agency Inc. (Best Choice) and its owner, Reginald King, have agreed to pay $1.8 million to resolve allegations that Best Choice and King violated the False Claims Act by paying kickbacks for the referral of Medicaid-covered patients for home and community-based healthcare services from Best Choice, the U.S. Department of Justice announced last month.
 
This settlement resolves allegations that Best Choice submitted claims for home and community-based healthcare services to Medicaid that resulted from a kickback arrangement between King, on behalf of Best Choice and Christopher Thomas, who transported patients from their homes to healthcare facilities in Kansas City.  Specifically, under this alleged arrangement, King paid Thomas $58,000 in kickbacks for new patients referred to Best Choice based on a formula which accounted for each hour of service that Best Choice billed to Medicaid. The Medicaid Program is a jointly-funded federal and state program.  Of the $1.8 million that King and Best Choice will pay under the settlement, the United States will receive $1,011,780 and the state of Kansas will receive $788,220.
 
The settlement resolves allegations originally brought under the qui tam, or whistleblower, provisions of the False Claims Act by Thomas, the recipient of the alleged kickbacks.  The act permits private parties to sue on behalf of the United States for false claims for government funds and to receive a share of any recovery.  The whistleblower reward in this case will be $43,178 which represents 10 percent of the federal share of the settlement, minus the amount that the relator received in kickbacks during the duration of the scheme.
 
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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