Whistleblower Laws & Qui Tam Action Information For Washington DC Residents

Qui Tam and Whistleblower Case Reports

THE FOLLOWING LIST CONTAINS QUI TAM CASES THAT HAVE BEEN SETTLED OR RESOLVED. THEY ARE INSTRUCTIVE ON THE TYPES OF CASES THAT THE GOVERNMENT IS PROSECUTING. HOWEVER, EVERY CASE IS DIFFERENT AND CASE RESULTS DEPEND ON A VARIETY OF FACTORS. THESE CASE REPORTS ARE PROVIDED FOR INFORMATIONAL PURPOSES AND ARE NOT PREDICTIVE OF FUTURE OUTCOMES FOR ANY OTHER CASES.

Hospice of Arizona to Pay $12 Million for Medicare Fraud

Hospice of Arizona L.C., along with a related company, American Hospice Management LLC, and their parent company, have agreed to a $12 million settlement to dispose of claims that they engaged in Medicare fraud in violation of the False Claims Act. The government alleges that Hospice of Arizona and its affiliates submitted or caused to be submitted inflated bills to Medicare, and in some cases sought collection of billings for hospice services which were ineligible for reimbursement.

In order to be eligible for reimbursement for hospice care services, the Centers for Medicare and Medicaid Services (CMS) specifies that patients must have a life expectancy of six months or less under normal conditions. Hospice facilities administer care with an aim toward relieving the suffering of patients with terminal illnesses rather than treating the underlying condition. From September 2002 to December of 2010, the government alleges, Hospice of Arizona submitted claims to Medicare for reimbursement at rates for which the provider was ineligible or for patients who did not qualify for end of life care. Providers participating in federal health insurance programs must certify compliance with the terms and conditions of participation, and submission of ineligible claims for reimbursement gives rise to liability under the False Claims Act. Specifically, the United States claimed that Hospice of Arizona pressured staff to locate Medicare-eligible patients, implemented norms which discouraged the discharge of patients for whom hospice care was no longer appropriate, and failed to put in place sufficient regulatory compliance procedures. As part of the settlement, Hospice of Arizona will enter into a corporate integrity agreement with the Inspector General of Health and Human Services, a remedy often employed in Medicare fraud and abuse cases to allow for continued monitoring of the provider’s conduct and the implementation of proper compliance protocol.

The United States was alerted to the conduct in the complaint by disclosures filed in a private qui tam (whistleblower) suit under the False Claims Act. The relator (whistleblower), Ellen Momeyer, is a former employee of Hospice of Arizona. Under the qui tam statute, successful relators can receive between 15% and 30% of any final judgment or settlement for contributing to the litigation; Ms. Momeyer will receive a $1.8 million whistleblower award. Private individuals with knowledge of fraud perpetrated against the government may sue on its behalf under the qui tam (whistleblower) provisions of the False Claims Act.

If you believe you have knowledge of Medicare or other fraud being committed against the Government, call our office for a free consultation.

GlaxoSmithKline Enters Into $3 Billion Agreementto Settle Off Label Marketing and Kickback Claims

On July 2, 2012 the Department of Justice announced GlaxoSmithKline (“GSK”) had agreed to pay $3 billion in fines. $1 billion of the settlement proceeds will cover criminal wrongdoing and $2 billion will cover civil liabilities in one of the largest fraud settlements in U.S. history and the largest payment ever from a drug company. Essential allegations in the case included the Defendant’s off label marketing of its drugs for treatment of conditions which had not been approved by the FDA. For example, GSK allegedly improperly marketed Paxil (which is approved to treat depression and anxiety disorders in adults) for the treatment of children and adolescents. An additional count involved the failure to report safety data about the GSK drug Avandia, a diabetes drug, to the Food and Drug Administration. The agreement with the Department of Justice included a five year Corporate Integrity Agreement in which company executives could forfeit annual bonuses if they (or their subordinates) engage in significant misconduct and sales agents are now being paid based on quality of service rather than sales targets.

Michigan Home Health Care Fraud – Medicare’s New Criminal Strikeforce Ramps Up Prosecution.

July 20, 2012, the Department of Justice announced that a Michigan resident pleaded guilty for his role in a $13.8 million Detroit-area home health care fraud scheme. Nabeel Shaikh, 30, of Wixom, Mich., pleaded guilty to one count of conspiracy to commit health care fraud. He faces a maximum penalty of 10 years in prison and a $250,000 fine.

According to information contained in plea documents, Shaikh purported to be a physical therapy assistant with a limited license who provided physical therapy services to homebound Medicare beneficiaries. In fact, Shaikh had a forged physical therapy assistant’s degree and no medical license. Beginning in approximately January 2009, Shaikh was paid to falsify medical documentation for two home health agencies, known as Physicians Choice Home Health Care LLC and Quantum Home Care Inc., each of which billed and received payments from Medicare for home health care services that were never rendered.

Shaikh allegedly paid kickbacks and bribes to Medicare beneficiaries in order to obtain the beneficiaries’ Medicare information, which was then used to bill Medicare for home health services that were never provided. He made up evaluations, therapy revisit notes and other medical documentation showing that physical therapy was provided for patients he never actually treated. Shaikh and his co-conspirators had Medicare beneficiaries pre-sign forms and visit sheets that were later falsified to make it appear that the beneficiaries had received home health services when, in fact, they had not.

Houston Nurse Received 97 Month Prison Sentence For Participating In Medicare Fraud

On May, 2012, the Department of Justice announced that a Houston-area home health nurse will serve a 97 month prison sentence for participating in a $5.2 million Medicare fraud scheme. Ezinne Ubani, a former director of nursing at Family Healthcare Group, a Houston home health care company, was sentenced by U.S. District Judge Nancy Atlas in the Southern District of Texas to 97 months in prison, followed by three years supervised release. Ubani also was ordered to pay $2.5 million in restitution jointly and severally with her codefendants. She was convicted on one count of conspiracy to commit health care fraud and two counts of making false statements following a May 2011 trial.

The sentence is a reminder to health care providers and others of the real risk of imprisonment and other consequences that can result from the submission of fraudulent Medicare or other health program claims.

Pfizer – Kickbacks And Off Label Marketing Result In $2.3 Billion Qui Tam Settlements.

On September 2, 2009, the Department of Justice announced the pharmaceutical giant Pfizer had agreed to pay a total of $2.3 billion under a recent Qui Tam settlement of which $1.3 billion was a criminal fine for kickbacks and off label marketing. One billion dollars was paid under the False Claims Act for violations involving the drugs Citromax, Depro-provera, Geodon, Lipitor, Lyrica, Norvasc, Pextra, Viagra, Zyrtec, and Zyvox. The settlement agreement required reimbursement to both the federal Medicare and state Medicaid programs. There were multiple relators or individuals who participated in the bringing of this lawsuit. The top relator, John Kopchinski recovered a relator share of $51,599,000.

To review the actual settlement with Pfizer, click here.

United States ex rel. Jaydeen Vicente, et al. v. Eli Lilly and Co. (Case No. 07-1791 ED PA).

On January 15, 2009, the Department of Justice announced that the drug company Eli Lilly agreed to pay more than $1.4 billion in civil and criminal penalties arising from allegations made in multiple whistle blower cases. The Qui Tam lawsuits alleged that Eli Lilly defrauded Medicare and Medicaid of millions of dollars in connection with its marketing of the popular anti-psychotic Zyprexa. The allegations of the lawsuit alleged that Lilly engaged in a nationwide campaign to market Zypexa for off label purposes that were untested and unapproved. As part of that campaign, Lilly minimized and misrepresented the dangers of Zyprexa, placing the company’s profits above the need for public safety. The Qui Tam complaints were filed on behalf of Zyprexa sales representatives from Florida and California. The complaint alleged Lilly had established a special sales force created for the single purpose of promotion Zyprexa exclusively for off label purposes.

United States ex rel Lucia Paccione v. Cephalon, Inc. (Case No. 036368 E.D.P.A.).

This case generated a recovery of $425 million in a civil and criminal finds making it one of the largest recoveries ever against a biotech company. The case involved the alleged off label marketing of drugs manufactured by Cephalon for prescription drugs used to treat cancer pain, epilepsy and narcolepsy. The complaint alleged that Cephalon focused its marketing campaign on unapproved uses for drugs targeting medical specialists with large patient populations. Criminal charges were based on information provided by relators who came forward in the civil Qui Tam case.

GE Healthcare: Providing false and misleading information resulting in inflated drug pricing of Myoview

As a result of a lawsuit filed in 2006, the United States Department of Justice announced settlement of $30 million with GE Healthcare, a provider of medical technologies and pharmaceutical products. The complaint alleged that Amersham Biosciences, the division of GE Healthcare, knowingly provided false and misleading information to the federal Medicare program from 2000-2003 in connection with the distribution of the pharmaceutical agent Myoview, a drug used by medical providers in the cardiology field to perform nuclear stress tests. The conduct allegedly caused Medicare to reimburse Myoview at artificially inflated rates. The relator alleged that the company had systematically gamed its reporting system at the expense of both patients who received diluted Myoview and the taxpayers who paid for the financial burden of this fraud. The Qui Tam relator in this case, James Wagel received over $5million dollars as his relator’s share of the settlement.

Eduardo Barquin – 5 Years in Prison for healthcare fraud with additional fines.

On April 8, 2009 U.S. District Court Judge Ursula Ungaro sentenced Barquin to 63 months in prison and a fine of $233,203 for restitution for his part in a healthcare fraud scheme. Barquin had admitted in a trial that he operated a Miami durable medical equipment company that submitted some 3.4 million in fraudulent claims to Medicare for reimbursement. He had also submitted false claims to Medicare for services that had not been prescribed by doctors or that were provided as claimed.

Wheaton Community Hospital – Providing unnecessary medical care

On January 4, 2010, the Department of Justice announced an $846,000 settlement against Dr. Stanley Gallagher and Wheaton Community Hospital. The lawsuit alleged these Defendants needlessly admitted Medicare patients and kept them longer than necessary for treatment. The Department of Justice cited a variety of cases using particular examples, including one example in which an elderly patient was admitted for six days allegedly due to pain. However, he received only oral pain medications and physical therapy prompting the Government to challenge the medical necessity for his stay.

University of California – Teaching Hospital – Upcoding and Improper Supervision

The Department of Justice announced it had entered into a $22.5 million settlementwith the University of California for alleged claims by five teaching hospitals that involved reimbursement under Medicare and other federal health insurance programs. The complaint alleged that services were performed or supervised by faculty physicians rather than residents without supervision and for upcoding which involves improper assignment of diagnostic codes for purposes of increasing reimbursement amounts.

Network Appliance, Inc. – GSA Supply Procurement Fraud

In March 2009 the Department of Justice announced a $128 million fraud settlement against McLean-based company Network Appliance, Inc. This fraud settlement was associated with the General Service Administration’s federal supply service procurement program. Under long-standing GSA guidelines, companies that contract with the GSA are obligated to provide the Government with favorable pricing to the items they sell. According to allegations in the lawsuit, Network Appliance, Inc. did not give the Government accurate and complete data about the discounts offered to commercial customers not did it afford the Government the opportunity an opportunity to achieve its most favored customer status in violation of the Best Price Rule.

HMO Wellpoint pays $37.5 Million for Whistleblower Claim

In 2004 four whistleblowers represented by Plaintiffs recovered more than $137 Million from an HMO which was allegedly lying about services they were providing to Medicare and Medicaid patients. The relators alleged that Wellpoint Healthplans, Inc. falsified data to make medical conditions of patients worse so they could charge more for the services they were providing.

Johnson & Johnson Agrees To a $150 Million Settlement With the State of Texas Involving Risperdal

The Texas Attorney General has announced that Johnson & Johnson has agreed to pay $150 Million to settle a case involving the anti-psychotic drug Risperdal. The lawsuit, filed in Texas, alleged that the company had defrauded the state by misleading doctors about this anti-psychotic drug. The settlement was reached after damaging court room testimony in which a witness stated that Johnson & Johnson hid data showing that Risperdal caused weight gain and can lead to diabetes. Evidence also revealed that Johnson & Johnson had an important study revealing these problems, but delayed adding a warning label to the drug.

Dominion Resources and Marathon Oil Company

Two energy companies, Dominion Resources, Inc. and Marathon Oil Company agreed to pay $2.2 Million and $4.7 Million respectively to settle a claim that arose from a whistleblower Qui Tam lawsuit. The complaint alleged that both companies knowingly underpaid royalties owed on natural gas from federal and Indian leases. Whistleblower, Harold Wright, who reported the fraud, was awarded $1.8 Million as his share in the settlement.

IIF Data Solutions – Government Overbilling

The Orlando Sentinel announced in May 2008 that Alan Grayson brought charges against IIF Data Solutions, a defense contractor alleging fraud against the Government for overbilling. Allegations included that the company misrepresented its experience and overbilled for technical and professional support services to the National Guard. As part of the settlement, IIF Data Solutions agreed to pay $8.9 Million, but did not admit any wrongdoing.

Burlington Resources, Inc./Underpaying Royalties for Natural Gas: $97.5 million recovery

In August 2007 Forbes reported that a lawsuit had been brought against Burlington Resources following a whistleblower claim that alleged underpaying royalties for natural gas produced on federal and Indian lands for a 17 year time period. Under a program overseen by the Department of the Interior’s Mineral Management Services, companies were required to report the monthly value of natural gas produced from their federal and Indian leases. They had to pay a percentage as royalty. The lawsuit alleged that Burlington had failed to pay appropriate royalties between March 1998 and March 31, 2005. Burlington Resources, Inc. agreed to settle the lawsuit for $97.5 Million.

Harris Community Hospital – Submitting Fraudulent Medicare Claims

In Mach 2007, Houston Business Wire announced a $15.5 Million settlement from the Harris County Hospital District. The Government alleged that the District submitted improper medical claims on behalf of thousands of patients.

Robert McCaslin was the initial whistleblower who reported the fraudulent practices, first to several supervisors. He then anonymously notified the District’s medical fiscal intermediary, Trailblazer Health Enterprises LLC of the fraudulent claim. He later sought the assistance of private civil counsel who assisted him in successfully prosecuting this claim in conjunction with the Government.