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Warner Chilcott U.S. Sales LLC, a subsidiary of pharmaceutical manufacturer Warner Chilcott PLC, has agreed to plead guilty to a felony charge of health care fraud, the U.S. Department of Justice announced last week.  The plea agreement is part of a global settlement with the United States in which Warner Chilcott has agreed to pay $125 million to resolve its criminal and civil liability arising from the company’s illegal marketing of the drugs Actonel^®, Asacol^®, Atelvia^®, Doryx^®, Enablex^®, Estrace^® and Loestrin^®. 

Warner Chilcott agreed to plead guilty in the District of Massachusetts to criminal charges that the company committed a felony violation by paying kickbacks to physicians throughout the United States to induce them to prescribe its drugs, manipulating prior authorizations to induce insurance companies to pay for prescriptions of Atelvia^® that the insurers may not have otherwise paid for, and making unsubstantiated marketing claims for the drug Actonel^®.

In a criminal information filed today in the District of Massachusetts, the government charged that Warner Chilcott, through its employees acting at the direction of members of the company’s management team, knowingly and willfully paid remuneration to physicians in order to induce those physicians to prescribe Warner Chilcott drugs.  Under the law, it is illegal to offer or pay remuneration to physicians to induce them to refer individuals to pharmacies for the dispensing of drugs for which payments are made in whole or in part under a federal health care program.  The information alleges that Warner Chilcott employees, at the direction of company management, provided payments, meals, and other remuneration associated with so-called “Medical Education Events,” which included dinners, lunches and receptions.  These events, which were often held at expensive restaurants, often contained minimal or no educational component and were instead used to pay prescribing physicians in an attempt to gain a “competitive advantage” over other companies.  Warner Chilcott also enlisted high-prescribing physicians as “speakers” for the company.  In fact, the “speakers” often did not actually speak about any clinical or scientific topics, and the payments were primarily intended to induce prescriptions.  For instance, Warner Chilcott informed “speakers” who were not prescribing at a high volume that they would not be paid for subsequent events unless their prescribing habits increased.      

The information also alleges that Warner Chilcott employees knowingly and willfully submitted false, inaccurate, or misleading prior authorization requests and other coverage requests to federal health care programs for the osteoporosis medications Atelvia^® and Actonel^®.  The false, inaccurate and misleading information was provided to certain insurance companies in order to overcome formulary restrictions that favored less expensive osteoporosis drugs.  For instance, Warner Chilcott was aware that many insurers only paid for Atelvia^® if a physician submitted an individualized request explaining why the patient could not be treated with less-expensive medications approved to treat the same conditions.  As detailed in the information, Warner Chilcott sales representatives filled out numerous prior authorizations for Atelvia^®, using “canned” medical justifications which often were inconsistent with the patients’ medical conditions.  In some instances, according to the information, Warner Chilcott sales representatives submitted these prior authorizations directly to insurance companies, holding themselves out to be physicians.  In other cases, sales representatives coached physicians and staff about which medical justifications would result in an approved prior authorization, whether or not the justification was true for a particular patient.  

Finally, the information alleges that Warner Chilcott employees were instructed by members of the company’s management team to make unsubstantiated superiority claims when marketing the drug Actonel^®.  The management team instructed the sales representatives to tell physicians that Actonel^® was superior to other bisphosphonates due to its supposedly unique “mechanism of action.”  According to the information, Warner Chilcott managers also encouraged sales representatives to use props to visually support this false claim, including pouring water and syrup onto two sponges while telling physicians that Actonel, like water, penetrated and exited the bone more quickly than its competitors, represented by the syrup.  Warner Chilcott management directed the sales representatives to make the superiority claim even though the claim was not supported by clinical evidence.

Under the terms of the plea agreement, Warner Chilcott will pay a criminal fine of $22.94 million.    

Warner Chilcott also entered into a civil settlement agreement under which it agreed to pay $102.06 million to the federal government and the states to resolve claims arising from its conduct, which allegedly caused false claims to be submitted to government health care programs.  The civil settlement resolved allegations that Warner Chilcott violated the federal Ant-Kickback Statute by paying illegal remuneration to prescribing physicians in connection with the so-called “Medical Education Events” and speaker programs and caused the submission of false prior authorization requests for Atelvia^® and Actonel^®.  The federal share of the civil settlement is approximately $91.5 million, and the state Medicaid share of the civil settlement is approximately $10.6 million.

The civil settlement resolves a lawsuit filed under the whistleblower provisions of the False Claims Act, which permits private individuals to sue on behalf of the government for false claims and to share in any recovery.  The civil lawsuit was filed in the District of Massachusetts and is captioned United States ex rel. Alexander, et al. v. Warner Chilcott plc, et al., Civil Action No. 11-CA-1121 (D. Mass.).  As part of today’s resolution, the whistleblowers will receive approximately $22.9 million from the federal share of the civil 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.

The U.S. Department of Justice announced last week that it has resolved a $237 million judgment against Tuomey Healthcare System for knowingly submitting or causing the submission of false claims to Medicare for services referred by physicians with whom the hospital had improper financial relationships.  Under the terms of the settlement agreement, the United States will receive $72.4 million and Tuomey, based in Sumter, South Carolina, will be sold to Palmetto Health, a multi-hospital healthcare system based in Columbia, South Carolina.

The judgment against Tuomey related to violations of the Stark Law, a statute that prohibits hospitals from billing Medicare for certain services (including inpatient and outpatient hospital care) that have been referred by physicians with whom the hospital has an improper financial relationship.  The Stark Law includes exceptions for many common hospital-physician arrangements, but generally requires that any payments that a hospital makes to a referring physician be at fair market value for the physician’s actual services, and not take into account the volume or value of the physician’s referrals to the hospital.

The government argued in this case that Tuomey, fearing that it could lose lucrative outpatient procedure referrals to a new freestanding surgery center, entered into contracts with 19 specialist physicians that required the physicians to refer their outpatient procedures to Tuomey and, in exchange, paid them compensation that far exceeded fair market value and included part of the money Tuomey received from Medicare for the referred procedures.  The government argued that Tuomey ignored and suppressed warnings from one of its attorneys that the physician contracts were “risky” and raised “red flags.”

On May 8, 2013, a South Carolina jury determined that the contracts violated the Stark Law.  The jury also concluded that Tuomey had filed more than 21,000 false claims with Medicare.  On Oct. 2, 2013, the trial court entered a judgment under the False Claims Act in favor of the United States for more than $237 million.  The United States Court of Appeals for the Fourth Circuit affirmed the judgment on July 2, 2015. 

The case arose from a lawsuit filed by Dr. Michael K. Drakeford, an orthopedic surgeon who was offered, but refused to sign, one of the illegal contracts.  The lawsuit was filed 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 allows the government to intervene and take over the action, as it did in this case.  Dr. Drakeford will receive approximately $18.1 million under 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.

West Chester Hospital and its parent UC Health have agreed to pay the federal government $4.1 million to settle allegations that West Chester knowingly submitted or caused the submission of false claims to federal health care programs, the U.S. Department of Justice announced last week.

This settlement resolves allegations that West Chester Hospital knowingly submitted claims to Medicare and Medicaid for hospital charges related to medically unnecessary spine surgeries performed by Dr. Abubakar Atiq Durrani, a surgeon from Mason, Ohio, who had admitting privileges at West Chester Hospital.  Durrani was arrested in July 2013 and charged with health care fraud violations relating to allegations that he performed medically unnecessary spine surgeries on patients residing in Ohio and Kentucky.  Following his arraignment, Durrani allegedly fled the United States and remains a fugitive.  

Medicaid is funded jointly by the states and the federal government.  The state of Ohio and commonwealth of Kentucky paid for some of the Medicaid claims at issue and will receive approximately $72,000 of the settlement amount.       

The civil settlement resolves a lawsuit filed under the whistleblower provisions of the False Claims Act, which permit 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 Southern District of Ohio by former patients of Durrani and is captioned United States ex rel. Scott, et al. v. Durrani, et al.  As part of today’s resolution, the whistleblowers will receive approximately $800,000 from the federal 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.

Guardian Hospice of Georgia LLC, Guardian Home Care Holdings Inc. and AccentCare Inc. (collectively Guardian) agreed to pay $3 million to resolve allegations that Guardian knowingly submitted or caused the submission of false claims to the Medicare program for hospice patients who were not terminally ill, the U.S. Department of Justice announced last week.  Guardian is a for-profit hospice which provides hospice services in Atlanta.

The Medicare hospice benefit is available for patients who elect palliative treatment (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.  Before billing Medicare, a hospice provider is obligated to comply with Medicare requirements and ensure that patients who are foregoing curative care are in need of end of life care.

The government alleged that Guardian submitted or caused the submission of false claims for hospice care for patients who Guardian knew were not terminally ill.  Specifically, the United States contended that Guardian’s business practices contributed to its submission of claims for patients who did not have a terminal prognosis of six months or less, including failing to properly train its staff and medical directors on the hospice eligibility criteria, setting aggressive targets to recruit and enroll patients, and failing to properly oversee the Atlanta hospice.

The settlement resolves allegations filed by Rose Betts and Jennifer Williams, former employees of Guardian, 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. Betts and Ms. Williams will receive approximately $510,000.

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.

Adventist Health System has agreed to pay the United States $115 million to settle allegations that it knowingly submitted or caused the submission of false claims to state and federal health care programs by maintaining improper compensation arrangements with referring physicians and by miscoding claims, the U.S. Department of Justice announced last week.  Adventist is a non-profit healthcare organization that operates hospitals and other health care facilities in 10 states. 

The settlement announced today resolves allegations that Adventist submitted false claims to the Medicare and Medicaid programs for services rendered to patients referred by employed physicians who received bonuses based on a formula that improperly took into account the value of the physicians’ referrals to Adventist hospitals.  Federal law restricts the financial relationships that hospitals and clinics may have with doctors who refer patients to them.

The settlement also resolves allegations that Adventist submitted bills to Medicare for its employed physicians’ professional services containing certain improper coding modifiers, and thereby obtained greater reimbursement for these services than entitled.

The allegations settled today arose from two lawsuits filed respectively by whistleblowers Michael Payne, Melissa Church and Gloria Pryor, who worked at Adventist’s hospital in Hendersonville, North Carolina, and Sherry Dorsey, who worked at Adventist’s corporate office, under the qui tam provisions of the False Claims Act.  The act permits private parties to file suit on behalf of the United States for false claims, and to share in any recovery.  The whistleblowers’ 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.