whistleblower

United States Intervenes in Whistleblower Lawsuits Against Neurosurgeon and Spinal Implant Co.

Submitted by mma on September 10, 2014
September 10, 2014
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The U.S. federal government has filed two complaints against a Michigan neurosurgeon (Dr. Aria Sabit), a spinal implant company (Reliance Medical Systems), two of that company’s distributorships (Apex Medical Technologies and Kronos Spinal Technologies), and the company’s owners (Brett Berry, John Hoffman, and Adam Pike), the U.S. Department of Justice announced on Monday.  The complaints allege that Apex and Kronos paid physicians such as Sabit to induce them to use Reliance spinal implants in their surgeries.

Berry and Pike founded Reliance in 2006, and subsequently created more than 12 physician-owned distributorships that sold Reliance devices.  Each of Reliance’s distributorships sold spinal implants ordered by their physician-owners for use in procedures the physician-owners performed on their own patients.  The complaints allege that Reliance used one of its distributorships, Apex Medical, to funnel improper payments to Sabit for using Reliance spinal implants in his surgeries.  According to the complaints, Sabit began using Reliance implants on his patients only after he acquired an ownership interest in Apex and started receiving payments from the sale of Reliance’s spinal implants.  Apex allegedly paid Sabit $438,570 between May 2010 and July 2012, during which time Sabit used Reliance implants in approximately 90 percent of his spinal fusion surgeries.  The government also alleges that these payments caused Sabit to perform medically unnecessary or excessive surgeries on certain patients who did not need the spinal implants. 

The government further alleges that Reliance operated a second distributor, Kronos, in southern California, which made improper payments to two other physicians, Drs. Ali Mesiwala and Gowriharan Thaiyananthan.  Allegedly, Reliance’s owners were recorded telling a potential Kronos investor that Reliance was formed as part of a plan to “get around” the federal Anti-Kickback Statute, which prohibits such improper payments, and that Reliance pays its physician-investors enough in the first month or two to “put their kids through college.”

The lawsuit against Dr. Sabit was originally filed by Drs. Cary Savitch and Gary Profett under the whistleblower provision of the False Claims Act, which allows private parties with knowledge of fraud against the government to sue on behalf of the government.  The Act also allows the government to intervene in such cases, which it has 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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U.S. Govt Intervenes in False Claims Lawsuits Against Evercare Hospice and Palliative Care

Submitted by mma on September 3, 2014
September 3, 2014
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The United States federal government has elected to intervene in two whistleblower lawsuits that allege Evercare Hospice and Palliative Care, now known as Optum Palliative and Hospice Care, knowingly submitted or caused the submission of false claims to Medicare, the U.S. Department of Justice announced last week.

The Medicare hospice benefit is available for patients who elect palliative care (medical care focused on providing patients with relief from pain, symptoms or stress) for a terminal illness and have a life expectancy of six months or less if their illness runs its normal course.  When a Medicare patient is admitted to hospice, that individual is no longer entitled to Medicare coverage for care designed to cure his or her illness.

The lawsuits allege that defendants violated the False Claims Act by knowingly submitting false claims for hospice benefits for patients who did not have a life expectancy of six months or less.  The complaints include allegations that management pressured employees and physicians to admit and retain patients who were not terminally ill and challenged or disregarded physicians’ decisions that patients should be discharged.  

The lawsuits were originally filed by former Evercare employees under the whistleblower provision of the False Claims Act, which allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  The government may also intervene on its own behalf, which it has 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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Bank of America Settles False Claims for $16.65B

Submitted by mma on August 28, 2014
August 28, 2014
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Bank of America Corporation has agreed to pay $16.65 billion to resolved federal and state claims against it and its former and current subsidiaries, the U.S. Department of Justice announced last week.  The bank has agreed to pay a $5 billion penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) – the largest FIRREA penalty ever – and provide billions of dollars of relief to struggling homeowners, including funds that will help defray tax liability as a result of mortgage modification, forbearance or forgiveness. 

The Justice Department and the bank settled several of the department’s ongoing civil investigations related to the packaging, marketing, sale, arrangement, structuring and issuance of RMBS, collateralized debt obligations (CDOs), and the bank’s practices concerning the underwriting and origination of mortgage loans.  The settlement includes a statement of facts, in which the bank has acknowledged that it sold billions of dollars of Residential Mortgage-Backed Securities (RMBS) without disclosing to investors key facts about the quality of the securitized loans.  When the RMBS collapsed, investors, including federally insured financial institutions, suffered billions of dollars in losses.  The bank has also conceded that it originated risky mortgage loans and made misrepresentations about the quality of those loans to Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA). 

The False Claims Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Three private whistleblower lawsuits filed under seal pursuant to the False Claims Act have been resolved in connection with this settlement; the whistleblowers’ portions of the settlement have 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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WMATA Settles False Claims for $4.2M; Whistleblower to Get $998K

Submitted by mma on August 25, 2014
August 25, 2014
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The Washington Metropolitan Area Transit Authority (WMATA) has agreed to pay $4.2 million to settle allegations that it knowingly submitted or caused the submission of false claims in connection with the use of federal funds to impermissibly award a contract, the U.S. Attorney’s Office for the District of Columbia announced last week.

The conduct at issue involves a contract that WMATA awarded to Metaformers, Inc., a Virginia-based business, to integrate the Authority’s financial and business systems.  The total cost of this integration project was approximately $14 million. WMATA funded the project with approximately $9 million in grant funds from the Federal Transit Administration (FTA). 

As a condition of receiving grant funds, WMATA certified that it would comply with statutes, regulations, and FTA rules mandating full and open competition when procuring goods and services using FTA grant funds. Also, as a condition of receiving the funds, WMATA certified that it would not award contracts in a manner that created a conflict of interest – for example, giving an unfair advantage to one bidder or contractor over others.  WMATA allegedly violated both the competition requirement and avoidance of “conflict of interest” rule in awarding the financial management information technology contract.

The lawsuit was originally filed by Shahiq Khwaja, a former WMATA employee, under the whistleblower provision of the False Claims Act.  The Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Khwaja will receive $996,480 as his portion 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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Samsung to Settle False Claims for $2.3M; Whistleblower Award TBD

Submitted by mma on August 21, 2014
August 21, 2014
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Samsung Electronics America Inc. has agreed to pay $2.3 million to resolve allegations that the company knowingly submitted or caused the submission of false claims for products sold on contracts, in violation of the Trade Agreements Act of 1979 (TAA), the U.S. Department of Justice announced earlier this week.

Multiple Award Schedule (MAS) contracts are awarded by General Service Administration (GSA) to multiple companies supplying comparable products and services.  Once GSA negotiates and awards the contract, any federal agency may purchase under it.  Like many other federal procurement contracts, GSA MAS contracts require the vendor to certify that all products it offers for sale comply with the TAA.  The TAA generally requires the United States to purchase products made in the United States, or another designated country with which the United States has a trade agreement. 

Samsung has authorized resellers who hold GSA MAS contracts.  Samsung certifies to the authorized resellers that Samsung will provide TAA compliant products and the resellers in turn list those products on the resellers’ GSA MAS contracts.  The settlement resolves allegations that Samsung caused resellers of its products to sell items on their GSA MAS contracts in violation of the TAA by knowingly providing inaccurate information to the resellers regarding the country of origin of the goods.  The United States alleges that Samsung represented to the resellers, who in turn represented to federal agencies, that the specified products were made in TAA designated countries, generally Korea or Mexico, when the specified products were in fact manufactured in China, which is not a TAA designated country.

The lawsuit was originally filed by Robert Simmons, a former Samsung employee, under the whistleblower provision of the False Claims Act.  The Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Simmons’ portion of the settlement 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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Carondelet Settles False Medicare Claims for $35M; Whistleblower Amount TBD

Submitted by mma on August 19, 2014
August 19, 2014
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Arizona non-profit Carondelet Health Network, doing business as Carondelet St. Mary’s Hospital and Carondelet St. Joseph’s Hospital in Tucson, Ariz., has agreed to pay the United States $35 million to settle allegations that the hospitals knowingly submitted or caused the submission of false claims to Medicare and other federal health care programs, the U.S. Attorney’s Office for the District of Arizona announced yesterday.

The settlement agreement resolves allegations that Carondelet St. Mary’s Hospital and Carondelet St. Joseph’s Hospital billed Medicare, the Federal Employees Health Benefit Program, and the Arizona Health Care Cost Containment System (Arizona’s Medicaid agency) for inpatient rehabilitation facility services that were not properly reimbursable under applicable coverage criteria because the patients were not appropriate for inpatient rehabilitation facility services.  The United States alleged that as a result of these false claims, federal health care programs paid substantially more than was warranted.

Shortly before becoming aware of the United States’ investigation, Carondelet disclosed to the government some inpatient rehabilitation overpayments and tendered a substantial repayment.  However, based on its investigation, the United States had concerns about the nature of Carondelet’s disclosure, including concerns that the disclosure and the repayment Carondelet tendered were not timely, complete, or adequate.  Despite these concerns, the United States considered Carondelet’s efforts in this regard as one of several factors in reaching the settlement amount and the resolution of the case.  The settlement is neither an admission of liability by the hospitals, nor is it a concession by the United States that its claims are not well founded.

The lawsuit was originally filed by Jacqueline Bloink under the whistleblower provision of the False Claims Act, which allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Bloink’s portion 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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McKesson Settles False Claims for $18M; Whistleblower Share TBD

Submitted by mma on August 12, 2014
August 12, 2014
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California-based pharmaceutical distributor McKesson Corporation has agreed to pay $18 million to resolve allegations that the company improperly set temperature monitors used in shipping vaccines under its contract with Centers for Disease Control and Prevention (CDC), the U.S. Department of Justice announced last week.

The government alleged that McKesson failed to comply with the shipping and handling requirements of its vaccine distribution contract with the CDC.  Under the contract, McKesson provided distribution services, receiving vaccines purchased by the government from manufacturers and then distributing the vaccines to health care providers.  The government alleged that the contract required McKesson to ensure that during shipping, the vaccines were maintained at proper temperatures by, among other things, including electronic temperature monitors set to detect when the air temperature in the box reached two degrees Celsius and below or eight degrees Celsius and above.  The government alleged that McKesson failed to set the monitors to the appropriate range and, as a result, knowingly submitted false claims to the CDC for shipping and handling services that did not satisfy its contractual obligations. 

The lawsuit was originally filed by Terrell Fox, a former McKesson employee, under the whistleblower provisions of the False Claims Act.  The Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Fox’s portion of the settlement 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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NYC Settles False Medicaid Claims for $1.05M; Whistleblower to Get $175K

Submitted by mma on August 8, 2014
August 8, 2014
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The City of New York has agreed to pay the federal government $1.05 million to resolve allegations that the New York City Human Resources Administration (HRA) knowingly submitted or caused the submission of false claims to New York State’s Medicaid program, the U.S. Attorney for the Northern District of New York announced on Monday.

Medicaid is a matching program in which the United States shares with the States the cost of medical services for low income and disabled individuals. Several managed care organizations (MCOs) have contracted with the State of New York to provide health care coverage to Medicaid beneficiaries who reside in New York City in exchange for fixed monthly payments. Many individuals who qualify for Medicaid also receive assistance under the federal Supplemental Security Income (SSI) program, which provides financial assistance to the elderly, blind, and disabled. In many States, including New York, SSI recipients automatically qualify to receive Medicaid benefits.

When a Medicaid beneficiary residing in New York City moves to another State and enrolls for SSI benefits, the federal government provides written or electronic notification to the New York State Department of Health (DOH), which administers the Medicaid program throughout New York. Once DOH receives this information, it must promptly forward it to HRA.  HRA, in turn, has an obligation to quickly review the information and, where appropriate, close a beneficiary’s Medicaid case if it determines that the beneficiary has moved out of New York City. If HRA fails to timely close a Medicaid case after learning from DOH or from another source that the beneficiary has relocated to another State, the MCO insuring that person will continue receiving monthly payments to insure an individual who is no longer eligible for Medicaid coverage in New York.

The United States’ investigation revealed that, although MCOs on several occasions notified HRA in writing that certain beneficiaries may have moved out of State, HRA failed to appropriately follow up on that information and work with DOH to ensure that MCOs stopped receiving monthly payments. As part of the settlement, HRA accepted responsibility for failing to timely review and close certain Medicaid cases after being provided information that those beneficiaries may have moved outside of New York City, and it admitted that its inaction caused one or more MCO to receive payments to insure individuals who were ineligible for benefits through New York State’s Medicaid program. HRA also agreed as part of the settlement to establish a process to investigate and close Medicaid cases whenever it receives information suggesting that a Medicaid beneficiary no longer resides within its coverage area.

The lawsuit was originally filed by an unnamed whistleblower under the qui tam provision of the False Claims Act.  The Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  The whistleblower will receive $175,000 as their portion 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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CHS to Settle False Medicare Claims for $98M; Whistleblower Amount TBD

Submitted by mma on August 6, 2014
August 6, 2014
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Community Health Systems (CHS), the nation’s largest operator of acute care hospitals, has agreed to pay $98.15 million to resolve allegations that the company knowingly submitted or caused the submission of false claims to government health care programs, the U.S. Department of Justice announced earlier this week.  One of the company’s affiliated hospitals, Laredo Medical Center (LMC), also allegedly billed Medicare for services in violation of the Stark Law.  The Stark Law prohibits a hospital from submitting claims for patient referrals made by a physician with whom the hospital has an improper financial relationship, and 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. 

CHS allegedly engaged in a deliberate corporate-driven scheme to increase inpatient admissions of Medicare, Medicaid and the Department of Defense’s (DOD) TRICARE program beneficiaries over the age of 65 who originally presented to the emergency departments at CHS hospitals.  The government further alleged that the inpatient admission of these beneficiaries was not medically necessary and that the care needed by, and provided to, these beneficiaries should have been provided in a less costly outpatient or observation setting. 

In addition, the government alleged that LMC presented false claims to the Medicare program for certain cardiac and hemodialysis procedures performed on a higher cost inpatient basis that should have been performed on a lower cost outpatient basis.  The government also alleged that LMC improperly billed Medicare for services referred to LMC by a physician who was offered a medical directorship at LMC, in violation of the Stark Law.  

As part of the agreement, CHS entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services - Office of Inspector General (HHS-OIG), requiring the company to engage in significant compliance efforts over the next five years.  Under the agreement, CHS is required to retain independent review organizations to review the accuracy of the company’s claims for inpatient services furnished to federal health care program beneficiaries.

The settlement resolves lawsuits filed by Kathleen Bryant, former Director of Health Information Management at CHS’s Heritage Medical Center in Shelbyville, Tennessee; Rachel Bryant, former nurse at CHS’s Dyersburg Hospital in Dyersburg, Tennessee; Bryan Carnithan, former Emergency Medical Services Coordinator at CHS’ Heartland Hospital in Marion, Illinois; Amy Cook-Reska, former coder for CHS’ LMC in Laredo; Sheree Cook, former nurse at CHS’s Heritage Medical Center in Shelbyville; James Doghramji, former internal medicine and emergency room physician at CHS’s Chestnut Hill Hospital in Philadelphia; Thomas Mason, former emergency room physician at Lake Norman Regional Medical Center in Mooresville, North Carolina; Scott Plantz, former emergency room physician at CHS’s Longview Regional Medical Center in Longview, Texas; and Nancy Reuille, former nurse and Supervisor of Case Management at CHS’s Lutheran Hospital in Fort Wayne, Indiana.  The lawsuits were filed under the whistleblower provision of the False Claims Act, which allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Their portion 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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Matson to Settle False Claims for $9.9M; Whistleblower to Get $2.5M

Submitted by mma on August 4, 2014
August 4, 2014
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Hawaii-based Matson Navigation Company has agreed to pay $9.95 million to settle allegations that the company knowingly submitted or caused the submission of false claims in connection with bills for ocean fuel surcharges to the U.S. Department of Defense (DOD), the National Law Review reported last week.

Matson and Horizon Lines, a subcontractor for Matson, allegedly billed the DOD for transporting military cargo and household items by ocean when in fact a portion of it was shipped by rail.

The lawsuit was originally filed by Mario Rizzo, an Illinois freight consultant, under the whistleblower provision of the False Claims Act.  The Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Rizzo will receive $2.5 million as his portion 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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