whistleblower act

55 Hospitals Settle Health Fraud Claims for $34M; Whistleblowers to Get $5.5M

Submitted by mma on July 5, 2013
July 5, 2013

Fifty-five hospitals located throughout the United States have agreed to pay the U.S. government over $34 million to settle allegations that the facilities knowingly submitted or caused the submission of false claims to Medicare for kyphoplasty procedures, the U.S. Department of Justice announced this week. 

Kyphoplasty is a minimally-invasive procedure used to treat certain spinal fractures, often related to osteoporosis.  In many cases, kyphoplasty can be performed safely and effectively as an outpatient procedure without any need for a more costly hospital admission.  The agreements announced today resolve allegations that the settling hospitals frequently billed Medicare for kyphoplasty procedures on a more costly inpatient basis, rather than an outpatient basis, in order to increase their Medicare billings.   

A sampling of the hospitals involved, and the amounts they settled for, include:

  • Atrium Medical Center, Middletown, Ohio: $4,232,992.50.
  • Cedars Sinai Medical Center, Los Angeles, Calif.: $1,485,846.
  • Mount Sinai Medical Center, Miami, Fla.: $1,846,194.00.
  • Twenty-three hospitals affiliated with HCA Inc., Nashville, Tenn.: $7,145,842.72 (including hospitals located in Florida, Texas, California, Georgia, and more).

The Justice Department has now reached settlements totaling approximately $75 million, with over 100 hospitals, to resolve allegations that they mischarged Medicare for kyphoplasty procedures. 

In addition to today’s settlement, the government previously settled with Medtronic Spine LLC, the corporate successor to Kyphon Inc., for $75 million, to settle allegations that the company defrauded Medicare by counseling hospital providers to perform kyphoplasty procedures as inpatient rather than outpatient procedures.

All but four of the settling facilities announced today were named as defendants in a lawsuit brought by Craig Patrick and Charles Bates, former Kyphon 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.  Patrick and Bates will receive approximately $5.5 million 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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CyTerra Settles Contract Fraud Claims for $1.9M; Whistleblowers to Get $361K

Submitted by mma on July 3, 2013
July 3, 2013

Massachusetts-based CyTerra Corporation has agreed to pay the U.S. government $1.9 million to settle allegations that CyTerra failed to provide the U.S. Army with accurate, complete, and current cost or pricing data for its products, causing the government to pay more than it should have, the Justice Department announced this week.

In 2003, the U.S. Army awarded CyTerra a contract for the production and delivery of AN/PSS-14 hand-held mine detection units.  The contract was modified several times to provide for the production and delivery of additional mine detection units.  The government alleged that, in negotiations concerning three of these contract modifications, CyTerra knowingly failed to provide the Army with the most recent cost or pricing data on the number of labor hours needed to produce a mine detector.  Under the Truth in Negotiations Act, CyTerra was required to provide “accurate, complete and current” cost or pricing data.  The government alleged that if the Army had received such information, it would have negotiated a lower price.         

The lawsuit was originally filed by Kevin Bartczak and Keith Aldrich, former CyTerra executives, 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 of the recovery.  Bartczak and Aldrich will receive $361,000 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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General Electric Aviation Systems Settles Contract Fraud Claims for $6.58M

Submitted by mma on June 26, 2013
June 26, 2013

Ohio-based General Electric Aviation Systems (GEAS) has agreed to pay $6.58 million to resolve allegations that the company knowingly submitted or caused the submission of false claims in connection with contracts made with the Department of Defense, the U.S. Department of Justice announced today.  GEAS manufactures and sells integrated systems and components for commercial, corporate, military and marine aircraft.

GEAS was contracted to manufacture and deliver to the Navy external fuel tanks for use on the F/A-18 Hornet strike fighter jet, which GEAS manufactured at its plant in Santa Ana, California.  In March 2008, a GEAS-manufactured tank failed government testing, which led to a multi-year investigation by local and federal agencies.  As a result, the United States alleged that GEAS knowingly failed to comply with contract specifications and failed to undertake proper quality control procedures in connection with 641 external fuel tanks it delivered to the Navy between June 2005 and February 2008.

The settlement also resolves allegations that, between June 2010 and June 2011, GEAS knew that it falsely represented to another government contractor that GEAS had performed a complete inspection of 228 drag beams to be used on Army UH-60 Blackhawk helicopters, and that those 228 drag beams conformed to all contract specifications. 

Allegations about GEAS’s misconduct at the Santa Ana facility were originally included in a lawsuit filed by Jeffrey Adler, a former GEAS employee, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows a private citizen with knowledge of fraud against the government to sue on behalf of the government and claim a share of the recovery.  Adler’s share 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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Med Overbilling Fraud Claims Settled for $3M; Whistleblower to Get $620K

Submitted by mma on June 24, 2013
June 24, 2013

Dr. Alfred Chan, and oncologist in Lakewood, Wash., and his wife Judy Chan have agreed to pay $3.1 million to settle allegations that they defrauded federal health care programs by overbilling for cancer treatment medication, U.S. Attorney Jenny Durkan announced last week.

The government alleged that Dr. Chan, with the assistance of his wife, Judy, routinely billed federal healthcare programs such as Medicare and TRICARE for twice (or more) the amount of cancer treatment drugs actually administered to his patients, resulting in a loss to the U.S. government estimated at over $1 million.  The Chans then allegedly destroyed and falsified patients’ medical records in order to conceal the fraud. 

Upon learning of the government’s investigation, the Chans attempted to sell, transfer, and hide millions of dollars in assets in an ultimately unsuccessful attempt to prevent the government from recovering its overpayments.  In February 2011, the Chans fled to Taiwan.  A grand jury sitting in the Western District of Washington returned a criminal indictment against Alfred and Judy Chan relating to their fraudulent conduct.

The lawsuit was originally filed by Ruth Ruckman, a former employee of the Chans, 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.  Ruckman will receive $620,000 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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Renaissance Home Health Care Settles Medicaid Fraud Claims for $1M

Submitted by mma on June 19, 2013
June 19, 2013

New York-based Parkshore Home Health Care, dba Renaissance Home Health Care, a home health care services agency, agreed to pay $1 million to resolve allegations that it provided unqualified home health aides to home health agencies, who in turn sent these unqualified aides into the homes of Medicaid recipients throughout New York City and then billed the Medicaid program for their services., the U.S. Department of Justice announced yesterday.  The State of New York will receive $600,000 of the total.

Under the New York State Medicaid program, home health aides – who primarily care for elderly patients, administer medication and provide services such as catheter care, colostomy care and wound care – are required to complete a training program licensed by either the New York State Department of Health or the New York State Education Department.  Renaissance allegedly used home health aides who failed to receive the required training, resulting in Medicaid being billed for hundreds of thousands of dollars of services that these aides were not qualified to provide.

The lawsuit was originally filed by a whistleblower under the qui tam 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 whistleblower’s share of the recovery is yet to be announced.

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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SAIC Settles Contract Fraud Claims for $11.75M; Whistleblower Share TBD

Submitted by mma on June 17, 2013
June 17, 2013

Virginia-based Science Applications International Corporation (SAIC) has paid $11.75 million to resolve allegations that the company violated the False Claims Act by charging inflated prices against grant money provided by the U.S. government to train first responder personnel to prevent and respond to terrorist attacks, the U.S. Department of Justice announced last week.

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 United States alleged that SAIC’s cost proposals falsely represented that SAIC would use far more expensive personnel to carry out its efforts than it intended to use and actually did use, resulting in inflated charges to the United States.

The lawsuit was originally filed by Richard Priem, SAIC’s former project manager for the first responder training program, 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.  Priem’s share 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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TesTech and Ceso Settle Fraud Claims for $2.9M; Whistleblower to Get $562K

Submitted by mma on June 7, 2013
June 7, 2013

Ohio-based companies TesTech and CESO have agreed to pay $2.88 million to resolve allegations that they knowingly submitted or caused the submission of false claims to federal agencies when they falsely claimed disadvantaged business status in order to obtain federal funds related to a number of federal transportation projects, the U.S. Department of Justice announced yesterday.

The Department of Transportation’s Disadvantaged Business Enterprise (DBE) program encourages the use of woman- and minority-owned businesses on federally funded transportation projects.  Contractors on such projects must make good-faith attempts to meet DBE participation goals as a condition of federal funding.

The settlement resolves allegations that the defendants falsely claimed disadvantaged business status for TesTech, a civil engineering firm, on numerous highway and airport construction projects in Ohio, Indiana, Michigan, and Kentucky.  The United States alleged that TesTech was owned and controlled by CESO, a non-disadvantaged firm, and that its owners, the Oakes, falsely claimed that TesTech was owned by Sherif Aziz and qualified as a minority-owned business in order to take advantage of the DBE program.

The lawsuit was originally filed by Ryan Parker, a former TesTech employee, under the whistleblower provisions of the False Claims Act.  Under the False Claims Act, a private citizen with knowledge of fraud perpetrated against the government can sue on behalf of the government and claim a share in the recovery.  Parker will receive $562,370 of the settlement amount. 

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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School Settles Student Aid Fraud Claims for $2.5M; Whistleblowers May Get $170K

Submitted by mma on June 3, 2013
June 3, 2013

American Commercial Colleges Inc. (ACC), a Texas-based for-profit corporation, has agreed to pay the United States government up to $2.5 million, including interest, to resolve allegations that they knowingly submitted or caused the submission of false claims to federal student aid programs, the U.S. Department of Justice announced last week.

In order to be eligible for federal student aid programs authorized by Title IV of the Higher Education Act of 1965, for-profit colleges such as ACC must obtain no more than 90 percent of their annual revenues from Title IV student aid programs.  The other 10 percent of their revenue must come from other sources, such as student payments or private loans.  ACC allegedly violated the False Claims Act when it orchestrated certain short-term private student loans that ACC repaid with federal Title IV funds.  The short-term loans at issue in this case were not sought or obtained by students on their own; the United States contends ACC orchestrated the loans for the sole purpose of manipulating its 90/10 Rule calculations.

Under the terms of the settlement, ACC will pay the United States $1 million, plus interest, over five years, and could be obligated to pay an additional $1.5 million under the terms of the agreement.

The lawsuit was originally brought by Shawn Clark and Juan Delgado, former directors of ACC campuses in Odessa and Abilene, Texas, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private citizens with knowledge of fraud perpetrated against the government to sue on behalf of the government and share in the recovery.  Clark and Delgado will receive $170,000 of the $1 million fixed portion of the government’s recovery, and an additional $255,000 if ACC becomes obligated to pay the maximum $1.5 million contingent 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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New Calif. False Claims Act Meets Conditions for 10% Higher Award

Submitted by mma on May 31, 2013
May 31, 2013

Recent amendments to the federal False Claims Act have expanded whistleblower protections and increased penalties for violators.  The amendments came in the form of the federal Deficit Reduction Act, the Fraud Enforcement and Recovery Act, the Affordable Care Act, and the Dodd-Frank Act.

California revamped its own False Claims Act earlier this year to bring it into compliance with federal law—and qualify for a 10 percent increase in its share of False Claims Act recoveries in cases relating to the submission of false or fraudulent claims to California’s State Medicaid program.  If a State obtains a recovery as a result of a State false claims action relating to fraudulent claims under the State Medicaid program, it must share the recovery with the federal government in the same proportion as the matching funds provided by the federal government for the state’s Medicaid program, called the federal medical assistance percentage. However, when states, such as California, enact state False Claims laws that are in compliance with federal law, those states get to keep an additional 10% of the recovery, thus sharing 10% less of any recovery in proportion to the federal medical assistance percentage.

For example, if the federal medical assistance percentage for a state is 60%, then the state would retain 40% of the recovery and the federal government would be entitled to the remaining 60% of the recovery.  But if the state has its own False Claims Act that is in compliance with federal law, that state would retain 50% of the recovery, and the federal government would receive the remaining 50%.

Under the qui tam, or whistleblower, provisions of the U.S. and California False Claims Acts, a private citizen with knowledge of fraud can sue on behalf of the government and claim a share in the recovery.  Many state and federal probes into Medicare and Medicaid fraud, and government contract fraud are initiated by whistleblower complaints. 

New York’s False Claims Act law was determined to no longer be in compliance with federal law.  New York has since submitted a revised statute to the Inspector General for the U.S. Department of Health and Human Services, and awaits word on whether the revised statute meets federal requirements and qualifies for the 10% incentive.

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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ISTA Settles Healthcare Fraud Claims for $33.5M; Whistleblower to get $2.5M

Submitted by mma on May 28, 2013
May 28, 2013

ISTA Pharmaceuticals has pleaded guilty to federal felony charges of conspiracy to introduce a misbranded drug into interstate commerce and conspiracy to pay illegal remuneration in violation of the Federal Anti-Kickback Statute, the U.S. Department of Justice announced last week.  In addition to criminal fines and asset forfeiture, ISTA has also entered into a civil settlement for knowingly submitting or causing the submission of false claims to federal health care programs.

Under the Food, Drug and Cosmetic Act (FDCA), it is illegal for a drug company to introduce into interstate commerce any drug that the company intends will be used for purposes not approved by the Food and Drug Administration (FDA).  Xibrom is approved by the FDA to treat pain and inflammation following cataract surgery; however, some ISTA employees promoted Xibrom for unapproved new uses, including the use of Xibrom following Lasik and glaucoma surgeries, and for the treatment and prevention of cystoid macular edema.  Some ISTA employees were told by management not to write down certain interactions with physicians regarding unapproved new uses, and not to leave certain printed materials in physicians' offices relating to unapproved new uses, in order to avoid detection.

ISTA also pled guilty to a conspiracy to knowingly and willfully offer or pay remuneration to physicians to induce those physicians to prescribe Xibrom, in violation of the federal Anti-Kickback Statute.  Certain ISTA employees provided physicians with free Vitrase, another ISTA product, with the intent to induce such physicians to refer individuals to pharmacies for Xibrom.  ISTA also provided other illegal remuneration, including sponsoring an event for a non-profit group associated with a particular physician, a golf outing, a wine-tasting event, paid consulting or speaker arrangements, and honoraria for participation in advisory meetings which were intended to be marketing opportunities.  ISTA agreed to pay $18 million to the federal government under the terms of its plea agreement.

ISTA also agreed to pay $15 million to resolve civil allegations regarding its marketing of Xibrom, which caused false claims to be submitted to government health care programs.  The United States alleged that ISTA's violations of the Anti-Kickback Statute resulted in false claims being submitted to federal health care programs.

In addition to the above, ISTA’s parent company, Bausch+Lomb (B+L), has also agreed to enter into a corporate integrity agreement to prevent future violations.

The lawsuit was originally filed by two whistleblowers under the False Claims Act.  One of the whistleblowers, Keith Schenkel, was a former employee of ISTA.  The False Claims Act allows private citizens with knowledge of fraud to sue on behalf of the government and share in the recovery.  Schenkel will receive $2.5 million as his share of 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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