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Bharara Says Whistleblower Awards May Aid Corruption Fight

March 18th, 2015 by Qui Tam

Speaking at a Fordham University School of Law event on Friday, March 6, U.S. Attorney for the Southern District of New York, Preet Bharara said that whistleblower bounties and leniency agreements could be useful tools for uncovering public corruption. Bharara is the latest law enforcer to endorse the benefits of rewarding tipsters who come forward with information about misconduct.

Bharara noted that other federal statutes, including the False Claims Act and the Dodd-Frank Act, already offer payments to whistleblowers, and the U.S. Department of Justice’s antitrust division runs a “first-in-the-door” leniency program for individuals and companies who are first to approach the government with a confession of participating in criminal antitrust violations. Bharara also noted that the law allows prosecutors some discretion to seek leniency for those who cooperate in other investigations. “If there is some proposal that would not unduly let blameworthy people off the hook but would simultaneously help to bring more blameworthy people in the system, that’s obviously something people should look at carefully because it has worked in other contexts.

Bharara’s comments were not part of any formal proposal, but they echo other calls to ramp up the government’s ability to offer incentives to recruit individuals to come forward with evidence of wrongdoing that might otherwise not makes its way into the government.

On Feb.26, New York Attorney General Eric Schneiderman announced plans for legislation to create a whistleblower rewards and protection program, a program modeled after the U.S. Securities and Exchange Commission program instituted following the Dodd-Frank Act.

In September of last year, U.S. Attorney General Eric Holder called for increasing the rewards available for whistleblower tips made pursuant to the Financial Institutions Reform, Recovery and Enforcement Act. As it stands, the law caps these awards at $1.6 million, markedly smaller than the multibillion-dollar penalties that government has imposed upon big financial institutions under FIRREA.

Whistleblower Protection Caucus Created by Bipartisan Group of Senators

March 17th, 2015 by TarahMendez

The official founding of a Senate Whistleblower Protection Caucus was announced on February 25, 2015 by Senator Charles Grassley (R-IA). This is a cross-party group of senators created by Senators Chuck Grassley (chairman), Ron Wyden (D-OR) (vice-chairman), Ron Johnson (R-WI), Mark Kirk (R-IL), Deb Fischer (R-NE), Thom Tillis (R-NC), Barbara Boxer (D-CA), Claire McCaskill (D-MO), Tammy Baldwin (D-WI), and Ed Markey (D-MA).

The National Whistleblower Center released a report on just how whistleblowers are essential to protecting the United States from fraud. The report is titled, “Utilizing Whistleblowers in the Fight Against Waste, Fraud and Abuse.” The Executive Director of the National Whistleblower Center, Stephen M. Kohn, stated, “This is an example of bipartisanship which makes our system work.” Furthermore, Kohn said, “The National Whistleblower Center looks forward to working with the Senate Whistleblower Protection Caucus to ensure all whistleblowers obtain meaningful protection.”

HHS Announces Goal to Tie More Medicare Payments to Quality

March 10th, 2015 by Qui Tam

On January 26, 2015, the U.S. Department of Health and Human Services (HHS) announced an initiative to base more Medicare provider payments on the quality of care provided.  HHS has set goals for the use of alternative payment models in the next three years.

Medicare payments have traditionally been based on a fee-for-service where providers receive payment for each individual health care service provided.  Some feel this method encourages high volume care rather than high value or coordinated care.  Conversely, alternative payment models such as accountable care organizations (ACOs), primary care medical homes, or bundled payments for episodes of care endeavor to link provider payments to quality of care and encourage providers to be more cost-efficient.

In the announcement, HHS established goals both for alternative payment models and for tying payments to quality or value generally.  HHS’ goal is to 30 percent of fee-for-service Medicare payments to quality or value through alternative payment models by the end of 2016 and to tie 50 percent of fee-for-service payments to alternative payment models by the end of 2018.  Generally, the agency aims to tie 85 percent of all traditional Medicare payments to quality or value by 2016 and to tie 90 percent of all Medicare payments to quality or value through programs such as Hospital-Based Purchasing and Hospital Readiness Reduction Program.

Additionally, the agency is creating a Health Care Payment Learning and Action Network to expand the use of alternative payment models beyond Medicare.  Through this network HHS will work with private payers, employers, consumers, providers, states, state Medicaid programs and other partners.

The announcement came after a meeting with health care leaders including representatives from health insurance companies, CVS health, and organizations such as the AMA, American Hospital Association, and the National Partnership for Women and Families.

The AMA issued its own press release in support of the initiative.  “Patients benefit when physicians have the flexibility and resources to redesign care, and when payers provide new payment models that can support physician efforts to improve patient care and lower health care costs over the long-term” said AMA President Robert M. Wah.

Two current alternative payment models are the Medicare Shared Savings Program and the Bundled Payments for Care Improvement Initiative.  Under the Medicare Shared Savings Program, providers participate by joining an ACO.  ACOs are generally groups of health care providers that share financial incentives to improve the quality and efficiency of care provided to a population of patients.  With Bundled Payments for Care Improvement Initiative, organizations must meet financial and performance goals for episodes of care.

The AMA notes that ACOs incur costs for care management, consultation between different physicians, and other services not reimbursed by Medicare fee-for-service payments.  In order to remove these financial barriers, the AMA recommends that CMS provide monthly care management payments; provide partial capitation payments; and establish low-cost or federally guaranteed loan programs.

Physicians considering involvement with and ACO or any other alternative payment model, should consider the investment required to join and the overall financial and organizational risk of the arrangement.

2014 Whistleblower Recoveries

March 10th, 2015 by Qui Tam

In 2014, the total whistleblower recoveries amounted to just shy of $3 billion, $2.2 billion (73 percent) of which were in the health care arena.

When the Department of Justice announces a False Claims Act recovery, they put the total recovery into the headline (the total amount that the fraudster is paying as a result of the FCA action), this includes state Medicaid recoveries and Criminal penalties triggered by FCA investigations.  However, when the DoJ announces their recoveries at the end of the year they leave the state and criminal recoveries off the table.

An example may be seen in the Johnson & Johnson matter announced in November 2013.  The Department of Justice initial press release states that $2.2 billion was recovered in this matter, but nearly $500 million of the $2.2 billion was a criminal penalty and over $500 million went to states.  Half of the total recovered is actually counted in the federal FCA statistics.

Ultimately, there is no evidence that the total fraud recoveries in the health care arena are going down.  FCA actions were very high in 2014, almost entirely due to non-qui tam banking cased that are listed in the non-HHD and non-DOD part of the report.  The total FCA number jumped from $422 million (FY 2013) to $3.3 billion (FY 2014), of which $2.6 billion was brought in from non-qui tam cases.

Whistleblower Protection Caucus Created by Bipartisan Group of Senators

March 2nd, 2015 by Qui Tam

The official founding of a Senate Whistleblower Protection Caucus was announced on February 25, 2015 by Senator Charles Grassley (R-IA). This is a cross-party group of senators created by Senators Chuck Grassley (chairman), Ron Wyden (D-OR) (vice-chairman), Ron Johnson (R-WI), Mark Kirk (R-IL), Deb Fischer (R-NE), Thom Tillis (R-NC), Barbara Boxer (D-CA), Claire McCaskill (D-MO), Tammy Baldwin (D-WI), and Ed Markey (D-MA).

The National Whistleblower Center released a report on just how whistleblowers are essential to protecting the United States from fraud. The report is titled, “Utilizing Whistleblowers in the Fight Against Waste, Fraud and Abuse.” The Executive Director of the National Whistleblower Center, Stephen M. Kohn, stated, “This is an example of bipartisanship which makes our system work.” Furthermore, Kohn said, “The National Whistleblower Center looks forward to working with the Senate Whistleblower Protection Caucus to ensure all whistleblowers obtain meaningful protection.”

Medicare, Part D, Full of Fraud Due to Lack of Oversight

February 25th, 2015 by Qui Tam

Medicare, Part D began in 2006 as a program to get much needed medication to more than 36 million senior citizens and people with disabilities.  Billions of needless expense has been added to the program due to lack of oversight and doctors prescribing name brand medications instead of generics.  Moreover, ProPublica has reviewed Medicare’s data and found that many doctor’s patterns of prescribing were fraudulent.  Some doctors blame this on identity theft claiming their identities were stolen.  One doctor, Ernest Bagner, III, made this claim.  Nevertheless, law enforcement, fraud units of at least two insurers and Medicare’s fraud contractor never blocked his national provider ID, which is needed to fill prescriptions.  Bagner had the highest total of money paid by Medicare for prescriptions by 2010.  Bagner claimed that the prescriptions were not his.  He stated, “These people make more money off of my name than I do.”  Some investigating his case do not believe he is being completely truthful.

There are many schemes that are constantly developing to loot the Medicare program.  Many foreign, aging, poor or disabled doctors are hired at small pharmacies and their ID’s are used to write thousands of fraudulent prescriptions for patients whose identities make also have been bought or stolen.  After dispensing, the drugs can be relabeled then sold to wholesalers or other pharmacies.  Other schemes include willing doctors who bill Medicare for the same prescriptions many times over that are never filled.  Not all prescriptions are for pain killers so law enforcement may overlook them.

In Los Angeles, Sheriff’s Sargent Steve Opferman heads LA County’s Health Authority Law Enforcement Task Force.  This is a hot spot of Medicare fraud and he spends much his time running down Part D scams.  Sgt. Opferman stated that most of the scams are related to Armenian organized crime rings. The scams depend upon a large group of doctors who are either unaware or dishonest.  Once the doctors are under law enforcement radar, the crime ring merely finds another doctor.  Opferman stated that Medicare is short of help and investigations can take “months or years” to get basic prescription or billing data.  He stated, “It’s like pulling teeth.”  Opferman said that if Medicare would ensure that doctors and pharmacies are legitimate and if they would shut down ID’s quickly when fraud is suspected, Medicare could stop much of the fraud.

Investigators from many agencies are involved in fraud cases and many times fall short of the goal line so justice is rarely swift.  Part D is run by private insurance companies unlike other parts of Medicare.  Insurers are supposed to look for fraud.  Typically the beginnings of cases investigated by insurers are once they notice a spike in a doctor’s prescribing or when tipped off by a patient.  Medicare does not require insurers to notify its Part D fraud contractor, only encourages reporting.  Insurers are not allowed to block a suspected doctor’s prescriptions.  Furthermore, insurers can only see a portion of the doctor’s prescribing record and they have no insight into the prescribing patterns   that are sent to other companies.  Contractors must get the patient’s chart from the insurers, who suspect fraud, to determine if the patient actually saw the doctor or was prescribed the correct medication.  This is usually where the investigation comes to a dead end.  Part D competes with other areas of Medicare fraud, such as kickbacks.  Only a small percentage is referred for prosecution.  Most are dropped due to “lack of resources or insufficient evidence,” states a 2012 report from the Government Accountability Office.

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US Settles False Claims Act Allegations Against ev3 for $1.25 Million

February 9th, 2015 by Qui Tam

The Justice Department announced that it has reached a $1.25 million settlement with ev3, a medical device manufacturer base in in Minnesota.   Ev3 formerly was known as Fox Hollow Technologies. A lawsuit filed under the whistleblower provision of the False Claims Act alleges that between 2006-2007, Fox Hollow induced 12 hospitals in 9 states to admit patients who were undergoing elective atherectomy procedures.   This minimally invasive procedure removes atherosclerosis and opens up coronary arteries, thereby increasing blood flow.   It is usually performed on an outpatient basis.  At that time, Fox Hollow sold the Silver Hawk Plaque Excision System, a device that was used in these procedures.  In order to increase hospital purchases of this device, Fox Hollow convinced the 12 hospitals to admit the atherectomy patients.  The hospitals subsequently submitted claims for unnecessary admissions and received higher reimbursements from Medicare for procedures that should have been performed in an outpatient facility. For more information, please click here.

$2.25 Million Settlement for Unnecessary Angioplasties

January 6th, 2015 by Qui Tam

United States ex rel. Carroll v. Adventist Health Systems, et al., Case No. CV-10-4925 DMR

A settlement in the amount of $2,250,000, payable by St. Helena Hospital, to the United States, stems from allegations that it submitted false claims to Medicare for certain cardiac procedures and related inpatient submissions.

Former employee of St. Helena Hospital, Kacie Carroll, filed the qui tam action in the U.S. District Court for the Northern District of California. Carroll will receive $450,000.

During the period from 1/1/2008 through 7/31/2011, it was alleged, that St. Helena Hospital knowingly charged Medicare for medically unnecessary percutaneous coronary interventions, more commonly known as angioplasty, the surgery performed to open narrowed or blocked blood vessels that supply blood to the heart. In addition, it was also alleged that the hospital unnecessarily admitted angioplasty patients who should have been treated on a less costly, outpatient basis.

Prescriptions for Controlled Substances to Medicare Patients is on the Rise

January 6th, 2015 by Qui Tam

Even as the abuse of prescription drugs has escalated and the national crackdown on it has occurred, new data suggests that doctors are prescribing even larger numbers of prescriptions for the most potent controlled substances to Medicare patients.

And, along with the increase in the number of prescriptions written, physicians are under increased scrutiny, as well as facing disciplinary action. Twelve of Medicare’s top 20 prescribers of Schedule 2 drugs (those that include powerful narcotic painkillers and stimulants with the highest potential for abuse and dependence) have faced disciplinary actions by their state medical boards or criminal charges related to their medical practices.

The most recent year for which data is available, 2012, Medicare covered nearly 27 million prescriptions for Schedule 2 controlled substances. Within the past year, Medicare has started to use prescribing data to identify potentially problematic doctors, as have some state medical boards as well. Beginning in mid-2015, Medicare will have the authority to kick doctors out of the program if they prescribe in abusive ways.

ALLEGATIONS AGAINST RESPIRATORY THERAPY COMPANY SETTLED UNDER THE FALSE CLAIMS ACT

December 9th, 2014 by Qui Tam

North Atlantic Medical Services Inc. (NAMS), a medical device company that provides equipment and services for treatment of respiratory ailments, reached an agreement to pay $852,378 to resolve allegations that it violated the False Claims Act. The Department of Justice announced that NAMS agreed to pay this settlement due to submitting claims to Medicare and Medicaid for services provided by unlicensed personnel. NAMS was doing business as Regional Home Care Inc. and was based in Massachusetts.

Under Massachusetts law, Medicare and Medicaid require suppliers of respiratory therapy equipment and services to comply with state licensing standards. Respiratory therapists must apply for and obtain a license. It was alleged that between September 2010 and January 2013, NAMS utilized unlicensed employees to set up sleep apnea masks and oxygen therapy equipment for patients residing in Massachusetts. NAMS continued to bill Medicare and Medicaid for services provided by unlicensed employees after the Massachusetts Department of Public Health informed them that this practice was illegal. Former NAMS employees, Konstantinos Gakis and Demetri Papageorgiou, filed the lawsuit under the False Claims Act. Together the whistleblowers will share in the government’s recovery and will receive $153, 428.

The Commonwealth of Massachusetts, which paid in part for the Medicaid claims at issue, will recover $229, 210. Special Agent in Charge Phillip M. Coyne for the U.S. Department of Health and Human Services of Inspector General stated, “To safeguard patient health and ensure that taxpayer money is spent well, Medicare and Medicaid require providers of respiratory care services to follow state licensure rules. Companies seeking to boost profits by using unlicensed personnel will be held accountable for their actions.”

Government Settles False Claims Act Allegations Against Oxygen and Sleep Therapy Company

 

 
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