whistleblower act

KMART Corporation has agreed to pay the federal government $1.4 million to resolve allegations that the company knowingly submitted or caused the submission of false claims to federal health care program Medicare, the U.S. Department of Justice announced last week.

The settlement resolves allegations that Kmart violated the False Claims Act by providing illegal inducements to beneficiaries of the Medicare program.  The government alleged that Kmart knowingly and improperly influenced the decisions of Medicare beneficiaries to bring their prescriptions to Kmart pharmacies by permitting the Medicare beneficiaries to use drug manufacturer coupons to reduce or eliminate prescription co-pays that they otherwise would be obligated to pay.  Federal law prohibits a person from offering beneficiaries of certain federal health programs, such as Medicare, remuneration that is intended to influence the beneficiary’s choice of provider.  The government alleged that Kmart’s conduct caused the Medicare beneficiaries to seek expensive, brand name drugs in lieu of cheaper generic drugs, which caused the government’s costs to increase without any medical benefit to the beneficiary.  The government also alleged that Kmart improperly encouraged Medicare beneficiaries to bring their prescriptions to Kmart pharmacies by offering them varying levels of discounts on the purchase of gasoline at participating gas stations based on the number of prescriptions that they filled at Kmart pharmacies.

The settlement resolves allegations in a lawsuit filed by Joshua Leighr, a former Kmart pharmacist, under the qui tam, or whistleblower provisions of the False Claims Act.  The act authorizes private parties, such as Mr. Leighr, to sue for fraud on behalf of the United States and to share in any recovery.  Mr. Leighr will receive approximately $248,500 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.

Pediatric Services of America and related entities (collectively, “PSA”) have agreed to pay $6.88 million to resolve allegations that the companies knowingly submitted or caused the submission of false claims to state and federal health care programs such as Medicare and Medicaid, the U.S. Attorney’s Office for the Southern District of Georgia announced earlier this month.

PSA, a provider of home nursing services to medically fragile children, allegedly (1) failed to disclose and return overpayments that it received from federal health care programs such as Medicare and Medicaid, (2) submitted claims under the Georgia Pediatric Program for home nursing care without documenting the requisite monthly supervisory visits by a registered nurse, and (3) submitted claims to federal health care programs that overstated the length of time their staff had provided services, which resulted in PSA being overpaid.

PSA had been maintaining numerous credit balances on its books that related to claims it had submitted to various federal health care programs, some of which had been on PSA’s books for several years. Additionally PSA wrote off and absorbed credit balances that had resulted from overpayments into their revenue because they had not investigated the reason for the credit balances before doing so. At the government’s request, PSA cooperated with a joint audit of the credit balances on its books in order to identify all outstanding overpayments.

As part of the settlement, PSA has agreed to enter into a corporate integrity agreement with the U.S. Department of Health & Human Services, Office of Inspector General (HHS-OIG), which will require PSA to put in place procedures and reviews to avoid and promptly detect conduct similar to that which gave rise to the settlement.

The settlement resolves allegations filed by Yvette Odumosu and Sheila McCray, former employees of PSA, under the qui tam or whistleblower provisions of the False Claims Act, which authorize private parties to sue for false claims on behalf of the United States and share in the recovery. Ms. Odumosu and Ms. McCray will receive a share of the settlement payment that resolves the qui tam suits that they filed in the amount of $1.1 million ($1,121,729). The claims settled in the civil settlement are allegations only, and there has been no determination of liability.

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.

Covan World Wide Moving, Inc., Coleman American Moving Services, Inc., and other related entities with home offices in Dothan, Ala. have agreed to pay $5 million to settle allegations that they knowingly submitted or caused the submission of false claims to the federal government, the U.S. Attorney’s  Office of the District of South Carolina announced yesterday.

The United States contended that Covan and others increased the weights of shipments and storage of servicemember’s and federal employee’s household goods and then submitted claims for payment to the government for the inflated weights.

The investigation began with the filing of whistleblower suits by employees of Covan’s Augusta, Georgia facility who witnessed the falsification of weight tickets ultimately used to bill the government.  The False Claim Act allows the government to recover actual damages and penalties of three times the actual damages and up to $11,000 per false claim.  This settlement includes repayment of actual damages and penalties. 

The False Claims Act allows individuals to file lawsuits with allegations that fraud has been committed against the federal government on behalf of the government.  Whistleblowers, referred to as Relators in the False Claims Act, are entitled to share in any recovery received by the government.  In this case, the two relators collectively will receive 25% of the funds of the settlement or $1,250,000.00 plus they are entitled to attorney fees. 

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.

Washington, D.C.-based Children’s Hospital and Children’s National Medical Center Inc. and its affiliated entities (CNMC) have agreed to pay $12.9 million to resolve allegations that it knowingly submitted or caused the submission of false claims to the Department of Health and Human Services (HHS) and state Medicaid programs, the U.S. Department of Justice announced today.

According to the settlement agreement, CNMC misstated information on cost reports and applications in two distinct manners to HHS.  This false information was used by HHS and Medicaid programs to calculate reimbursement rates to CNMC.  The United States contended that CNMC misreported its available bed count on its application to HHS’ Health Resources and Services Administration under the Children’s Hospitals Graduate Medical Education (CHGME) Payment Program.  The CHGME Payment Program provides federal funds to freestanding children’s hospitals to help them maintain their graduate medical education programs that train pediatric and other residents.  The United States further contended that CNMC filed cost reports misstating their overhead costs, resulting in overpayment from Medicare and the Virginia and District of Columbia Medicaid programs.

The settlement resolves allegations brought in a lawsuit filed under the qui tam or whistleblower provisions of the False Claims Act by James A. Roark Sr., a former employee of CNMC.  Under the act, a private citizen can sue on behalf of the United States and share in any recovery.  The United States is entitled to intervene in the lawsuit, as it did here.  As part of the resolution, Mr. Roark will receive $1,890,649.98.

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.

United Parcel Service (UPS) has agreed to pay $25 million to settle allegations that it knowingly submitted or caused the submission of false claims to the federal government in connection with its delivery of Next Day Air packages, the U.S. Department of Justice announced yesterday.

UPS provides delivery services to hundreds of federal agencies through contracts with the U.S. General Services Administration (GSA) and U.S. Transportation Command, which provides support to Department of Defense agencies.  Under these contracts, UPS guaranteed delivery of packages by certain specified times the following day.  The settlement announced today resolves allegations that UPS engaged in practices that concealed its failure to comply with its delivery guarantees, thereby depriving federal customers of the ability to request refunds for the late delivery of packages.  In particular, the government alleged that UPS knowingly recorded inaccurate delivery times on packages to make it appear that the packages were delivered on time, applied inapplicable “exception codes” to excuse late delivery  (such as “security delay,” “customer not in,” or “business closed”), and provided inaccurate “on-time” performance data under the federal contracts.  

The civil settlement 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 obtain a portion of the government’s recovery.  The civil lawsuit was filed in the Eastern District of Virginia by Robert K. Fulk, a former employee of UPS, who will receive $3.75 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.