False Claims Act Resource Center

Archive for August, 2013

SEC Is Still Waiting For A Big FCPA Tip

Tuesday, August 27th, 2013

The SEC Whistleblower program has yet to land a big FCPA case.  SEC Whistleblower Head Sean McKessy predicts that FCPA claims will materialize and believes the number of FCPA tips reported may be higher than noted.  Nonetheless, others are skeptical about whether the FCPA is a viable avenue for SEC whistleblowers.  Professor Mike Koehler of the Southern Illinois University predicts low numbers of FCPA tips primarily because most investigations arise from company self-disclosures.  Recent FCPA enforcement actions show a great deal of SEC interest in the claims.  GlaxoSmithKline recently  reported that a number of its senior executives in China may have bribed medical providers in that country. Other companies have reported kickbacks in China, as well.  Most of these allegations, however, arose from internal investigations.  Many believe that the SEC may see a number of whistleblowers who come from outside of the United States.

Texas School Chain Pays $3.7 Million To Settle Claims Of Fraudulent Financial Aid

Tuesday, August 27th, 2013

ATI Enterprises, Inc. agreed to pay the government $3.7 million to settled claims that it falsely certified compliance with federal financial aid programs.  The government claims that ATI fraudulently misrepresented its job placement statistics to maintain its eligibility for financial aid programs, and that it fraudulently induced students to enroll in the school and to maintain their enrollment  to increase the amount of federal dollars received.  The settlement resolves two separate whistleblower suits that were filed against ATI for claims under the False Claims Act.

Outside Auditor Blows The Whistle On Shands Hospitals

Tuesday, August 27th, 2013

Terry Myers tried in vain to have Shands Hospitals self report improper billing practices his company found during routine audits over several years.  The improper billing concerned Shands practice of routinely admitting Medicare and Medicaid patients who were not sick enough to need inpatient care.  Myers also alleged that Shands improperly billed for outpatient care, as well.  When Shands refused to self report, Myers filed a lawsuit under the false claims act.  Last week, the government reported a partial settlement of claims relating to the inpatient component of the lawsuit.  Shands agreed to pay $26,million  to resolve those claims.  The outpatient claims remain unresolved.  The government announced its intervention in the case that remains.

U.S. Senators Welcome CMS Action To Prevent Medicare Waste Fraud & Abuse

Tuesday, August 6th, 2013

Following an announcement by the Centers for Medicare and Medicaid Services about the temporary moratoria on Miami and Chicago home health providers and Houston ambulance providers for Medicare, U.S. Senators Orrin Hatch, Chuck Grassley, and Tom Coburn welcomed this action by CMS to halt waste fraud and abuse within the Medicare program.  The senators had repeatedly asked CMS to use the Patient Protection and Affordable Care Act (“PPACA”) to stop potential fraud by certain Medicare providers.

Under the PPACA, CMS is empowered to impose a temporary enrollment moratorium on new Medicare providers and suppliers in instances when CMS determines there is significant potential for waste, fraud, or abuse within the applicant type of geographic area.  The three senators had repeatedly requested CMS to take action over the prior three years based on evidence from the HHS-OIG demonstrating that the moratorium would stop Medicaid fraud.

“While it’s certainly better late than never, it’s unfortunate that CMS took three years to use the tools it’s had to protect seniors, who rely on Medicare, from fraud and abuse,” said Orrin Hatch, member of the senate finance committee with oversight over the Medicare program. “With CMS finally acting to crack down on fraud in high-risk areas in Miami and Houston, America’s seniors will be better protected from those wishing to gain the system putting their care in jeopardy, while helping sure up Medicare’s finances.” 

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Georgia Joins Fight Against Hospitals That Recruited Undocumented Pregnant Women

Friday, August 2nd, 2013

The state of Georgia publicly joined a pending federal whistleblower case against two hospital companies, Tenet Healthcare Corporation and Health Management Associates, Inc. and an entity commonly known as Clinica de la Mama.  The suit alleges that Clinica operates prenatal clinics to identify and recruit pregnant, undocumented Hispanic women and refers them to Tenet and HMA hospitals that pay for the referrals because the deliveries will be paid for by Medicare and Medicaid.

“To me it was pay for patients, pure and simple.  I said this is an illegal agreement, it is a kickback situation,” said the whistleblower, Ralph Williams.

As a CFO, Williams said that he uncovered a contract for “translation services” for which he was unable to find any services provided.  After inquiring further, the hospital’s CEO explained the contract was actually for referral of pregnant patients.

The lawsuit aims to recover hundreds of millions of dollars in claims paid by Medicare and Medicaid, going back at least ten years.

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Federal Budget Cuts Hit The False Claims Act

Friday, August 2nd, 2013

Federal Officials are scaling back numerous high-profile healthcare False Claims Act investigations due to budget decline.  The Department of Health and Human Services’ Office of Inspector General, which investigates Medicare and Medicaid fraud, is losing 400 staff members through 2015, about 20% of its workforce.

An unspecified number of investigations into poor quality care in hospitals are being delayed due to “significantly reduced” travel budgets and the high cost of paying experts to review medical files.  These delays may result in a “potentially high-risk hospital not being reviewed” and “potentially erroneous claims not being reviewed.”

Sequestration has played a part, but the inspector general’s funding problems are more complex, officials say.  The agency is operating with reduced funds because of the expiration of a $30 million per year appropriation form the Deficit Reduction Act of 2005 and the end of stimulus funding and other budget cuts.

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World’s Largest Pharmaceutical Company To Pay Almost $500M To Resolve False Claims Act Allegations

Thursday, August 1st, 2013

Pfizer Inc., the owner of Wyeth Pharmaceuticals Inc., will pay $491 million to resolve allegations of off-label marketing of the drug Rapamune.

Mark Campbell, the whistleblower and a former Wyeth sales representative, alleged that Wyeth illegally marketed, for over a decade, the transplant drug for uses that had not been approved by the U.S. Food & Drug Administration (“FDA”), including potentially dangerous uses subject to a “black box” warning, the most serious type of warning required by the FDA.

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Florida Pain Center To Settle False Claims Act Allegations

Thursday, August 1st, 2013

AccMed Healthcare Systems, LLC, also knows as the Florida Spine Care and Pain Center, have resolved allegations that it violated the False Claims Act.

The U.S. Attorney’s Office said the settlement involves Bao Pham, D.O, allegedly submitting false claims between 2004 and 2008 for non-reimbursable procedures and services by up-coding and unbundling medical services provided to beneficiaries of Medicare and Federal Office of Workers Compensation programs.

Pham and the Florida Spine Care and Pain Center have paid $448,794 to resolve the allegations.

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Boston Hospital To Pay Over $5 Million In Improper Medicare Claims

Thursday, August 1st, 2013

Beth Israel Deaconess Medical Center, located in Boston and one of the world’s leading teaching hospitals, will pay over $5 million to settle allegations of improper Medicare claims.

The U.S. Attorney’s Office said the hospital improperly filed claims from 2004 to 2008 for inpatient admissions for patients who stayed overnight with congestive heart failure, chest pain and other ailments.  What should have been billed as observational services, an outpatient service, was actually billed as inpatient admissions which Medicare reimburses at significantly higher rates.

The hospital, though not admitting any wrongdoing, will pay $5.315 million to settle the allegations that it violated the False Claims Act.

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