Archive for June, 2010

Health Alliance of Greater Cincinnati, Two Ohio Hospitals, and Physician Group to Pay $2.6 Million to Resolve Fraud Allegations

Friday, June 25th, 2010

The Health Alliance of Greater Cincinnati, two of its member hospitals (The Fort Hamilton Hospital and The University Hospital), and University Internal Medicine Associates Inc. have agreed to pay the United States $2.6 million to settle claims that they violated the Anti-Kickback Statute and the False Claims Act by engaging in a kickback-for-referral scheme, announced the United States Department of  Justice.

The Fort Hamilton Hospital is a 310-bed hospital located in Hamilton, Ohio. The alleged scheme involved the hospital’s desire to expand the scope of its cardiology services to include certain interventional cardiology procedures. Under state law, The Fort Hamilton Hospital could only perform the interventional cardiology procedures if it participated in a particular clinical trial involving those procedures.

The government asserted that University Internal Medicine Associates, a physician group based at The University Hospital in Cincinnati, offered to provide the interventional cardiology coverage that The Fort Hamilton Hospital needed for the clinical trial, but only if the hospital agreed to refer cardiology patients and procedures to the physician group on a preferential basis. The government contended that the preferential referral arrangements sometimes resulted in patients being transferred to The University Hospital, or being seen by cardiologists with University Internal Medicine Associates, rather than the hospital or cardiologist of their choosing.

The government asserted that the arrangements violated the federal Anti-Kickback Statute, which prohibits a hospital from soliciting or receiving, or a physician from offering or paying, anything of value in return for patient referrals. Violations of the federal Anti-Kickback Statute, 42 U.S.C. Section 1320a-7b(b), have served as the basis for many whistleblower (or “Qui Tam”)  cases under the federal False Claims Act.  The Anti-Kickback Statute, and a number of similar State laws, generally prohibit anyone from offering, paying, soliciting or receiving any remuneration to induce (or reward) a referral of a person for services or items paid for by Medicare, Medicaid, another federal healthcare program.  These improper payments can come in many different forms, including, but not limited to: referral fees; finder’s fees; productivity bonuses; discounted leases; discounted equipment rentals; research grants; speaker’s fees; excessive compensation; and free or discounted travel or entertainment.

The allegations resolved by the settlement were initiated by a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act, which allow private parties to file actions on behalf of the United States and share in any recovery. The whistleblower in this suit, Dr. Deborah Hauger, a cardiologist who formerly worked at The Fort Hamilton Hospital, will receive $468,000.

For more information go to http://www.justice.gov/opa/pr/2010/June/10-civ-696.html

Detroit-Area Medical Clinic Owners Convicted in $23 Million Medicare Fraud Scheme

Friday, June 25th, 2010
The owner and the vice president of a Detroit-area physical therapy clinic were convicted on June 22, 2010, by a federal jury for their roles in a $23 million Medicare fraud scheme, announced the Departments of Justice and Health and Human Services.
 
Evidence at trial established that Wayne County Therapeutic Inc. (WCT) in Livonia, Michigan, purported to be an outpatient clinic that specialized in physical and occupational therapy.  Evidence at trial established that Bernice Brown, the owner of WCT, purchased fake physical and occupational therapy files from certain third-party contractors, and she and the Vice President of WCT billed the services reflected in the files to Medicare as if WCT therapists had provided the services. Brown instructed her staff to create false documents and to add those documents to medical files to make it appear that the WCT therapists, who were licensed in the state and enrolled with Medicare, had performed the services, when she knew they had not.
 
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.  Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 585 individuals who collectively have falsely billed the Medicare program for approximately $1.3 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers. 
 
For more information about this health care fraud prosecution go to:

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT) go to: www.stopmedicarefraud.gov.

Dermatologist Pays $2.75 million to settle false Claims Suit

Thursday, June 17th, 2010

 A New York dermatologist settled a false claim lawsuit against him for $2.75 million.  The physician was able to collect higher reimbursements from Medicaid by classifying himself as a primary care physician instead of as a dermatologist, allowing him to collect fees for services not actually provided. 

More information can be found at: http://online.wsj.com/article/BT-CO-20100610-711174.html?mod=WSJ_latestheadlines&mg=com-wsj

OIG Seeks to Bar Executives of Companies that committed Fraud from Medicare

Thursday, June 17th, 2010

The Office of Inspector General is seeking new powers from Congress to exclude offending corporate executives from Medicare if their companies committed healthcare fraud.  Under current law, OIG can only seek to bar executives from working for the companies that committed fraud.  However, they are still able to work for other companies in the healthcare industry.  The OIG is seeking to close this loophole.  Members of Congress support the OIG’s efforts.   

More information can be found at: http://thehill.com/business-a-lobbying/103401-white-house-wants-broad-new-authority-on-medicare-fraud

Cochlear Americas settles False Claims Case for $880,000

Friday, June 11th, 2010

Cochlear America, a manufacturer of cochlear implants, has settled a false claims case against it, alleging that it made illegal payments to health care providers to induce the purchase of its implant systems.  Cochlear implants are small, complex electronic devices that can help to provide a sense of sound to a person who is profoundly deaf or severely hard-of-hearing.  The lawsuit was brought initially by Brenda March, a whistleblower, who claimed that Cochlear America made illegal payments to physicians in exchange for prescribing its cochlear implants.  Under the terms of the settlement, Ms. March will receive $176,000 for her efforts. 

See link below for more information:
http://www.prnewswire.com/news-releases/united-states-settles-false-claims-act-allegations-with-cochlear-americas-for-880000-95961459.html

Johnson and Johnson Moves to Dismiss Anti-Kickback Lawsuit on Grounds that its Conduct Constituted Acceptable Business Practices

Friday, June 11th, 2010

Johnson and Johnson filed a motion to dismiss a lawsuit against it under the False Claims Act for allegedly paying kickbacks to Omnicare, Inc to push Johnson & Johnson drugs to nursing home patients.  Omnicare earlier settled a lawsuit against it for $98 million for accepting such kickbacks, although Omnicare denied liability.  

Johnson & Johnson argued that its payment programs, such as giving customers higher rebates based on the share of the manufacturer’s product used and getting its drugs on provider formularies were common commercial practices.  The company further claims that there is no evidence that any patient was prescribed an inappropriate drug. 

More information can be found at:  
http://www.sfgate.com/cgi-bin/article.cgif=/g/a/2010/06/07/bloomberg1376-L3PL940YHQ0X-1.DTL

Office Depot Settles Claims of Deceptive and Unfair Consumer Practices for Overcharging Government Agencies for Office Supplies

Friday, June 11th, 2010

The Florida Attorney General settled claims under the state’s false claims act against Office Depot for allegedly overcharging government offices for supplies.  The case was settled for $4.5 million.  As part of the settlement, the state of Florida will also be reimbursed an additional $1.3 million for its investigative and legal expenses. 

The claims centered on allegations that Office Depot unilaterally and without notice switched pricing plans, resulting in higher prices to the government, as well as to unrelated non-profit organizations.  David Sherwin, a former Office Depot account manager reported the overpricing scheme in May 2008. 

More information can be found at: http://www.myfloridalegal.com/newsrel.nsf/newsreleases/370FC8DA33D527C9852577380060920D

Health and Human Services Touts New Policy to Bar Executives of Companies recidivist Violators of Healthcare Fraud from Their Jobs or Industry.

Friday, June 11th, 2010

The Department of Health and Human Services has begun a policy to eject executive of companies guilty of healthcare fraud if they were in a position to stop the fraud from occurring.  The HHS policy reflects frustration with repeat offenders of healthcare fraud and acknowledges that while the government must continue to do business with some companies, their executives may be expendable.  Despite increased penalties and damages for fraud, companies still maintain an incentive to increase sales of products paid for through Medicare or Medicaid programs.  One method of increased profits fraught with pitfalls is the incentive-based compensation system, which rewards sales people for hitting targets.  Despite increased government penalties, companies have not had sufficient incentive to alter their behavior. 

See link below for more information: http://money.cnn.com/2010/06/04/news/companies/astrazeneca_pharmaceutical_fines.fortune/index.htm

Program Fraud Civil Remedies Act of 1986

Monday, June 7th, 2010

At a panel on Thursday, June 3, 2010, the Deputy Director of the Commercial Litigation Branch of the Department of Justice’s Civil Division, Michael Granston, announced that he expected Congress to enact changes to the Program Fraud Civil Remedies Act of 1986.  Also known as the “mini False Claims Act,” the PFCRA enables the government to recover up to $150,000 in administrative proceedings and permit a person to be made to pay up to $5,000 per claim and double the amount falsely claimed.  It is reported that the PFCRA would reduce the Department of Justice’s False Claims Act caseload through use of this more streamlined administrative process, instead of the federal courts, where False Claims Act complaints often remained under seal for years. 

Like the False Claims Act, the PFCRA establishes administrative procedures for executive agencies to use against anyone who makes a false claim or false statement to the agency which the person knows or has reason to know is false, fictitious, or fraudulent.  The PFCRA does not create any violations or change the manner in which agencies receive allegations of false claims or false statements.  It merely establishes an additional legal remedy, and its substantive provisions are similar to those under the False Claims Act.

 More information can be found at:  http://www.hhs.gov/dab/guidelines/

Health Care Provider to Pay $44 Million

Monday, June 7th, 2010

On Thursday, June 3, 2010, Senior U.S. District Judge Matthew J. Perry, Jr., ruled that Tuomey Healthcare System, based in Sumter, South Carolina, must pay $44,888,651 plus interest received from Medicare under physician contracts in violation of the Stark Law.  This ruling from Judge Perry follows the March 29 jury verdict where a federal jury found that the hospital violated the Stark Law, a physician self-referral law, through 18 part-time physician contracts for the hospital’s Outpatient Surgery Center.  However, the jurors concluded that the hospital had not violated the False Claims Act and, as a result, would not be required to pay fines and penalties totalling $227.5 million.  Judge Perry also determined that the government was entitled to a new trial regarding the False Claims Act findings.  Any additional money recovered by the government under the False Claims Act will be offset by the $44,888,651 that the government received as a result of the June 3 ruling.

More information can be found at : http://www.theitem.com/news/article_a10824e6-50c2-5bdb-83e0-701057d1094a.html

http://www.tuomey.com/news.aspx?article_id=25