Education Management Corp. sought to dismiss the entire suit.  In its opinion addressing the company’s motion to dismiss, the District Court stated that this was a “massive and complex case.”  While the Court found that the compensation plan, on its face, appeared to comply with the Higher Education Act, it allowed the plaintiffs to proceed with their allegations that the company violated the Act by the manner in which the plan was actually implemented.  According to the Court, the allegations that it was allowing to proceed charged that Education Management Corp. executives made a knowing decision to perpetuate a companywide “sham” to conceal prohibited compensation practices. 

As the District Court explained in its opinion, the prohibition on providing recruiters with incentive compensation was passed by Congress in 1992 after an investigation into school’s abuse of federal student-loan programs which guarantee that the institution will be paid.  If the student does not repay the money owed, though, the costs of that default are passed on to the taxpayers.  The prohibition was intended to avoid the risk that recruiters, who might otherwise be paid based upon the number of students they brought to the institution, would enroll poorly qualified students who would obtain little benefit from the subsidy and may be unwilling or unable to repay the federally-guaranteed loan.  The Court noted that the annual federal student loans brought in by Education Management Corp. went from $656 million in 2003 to $2.578 billion in 2010. 

In commenting on this case, Marc Raspanti an attorney with Pietragallo Gordon Alfano Bosick & Raspanti, LLP who specializes in qui tam litigation, stated, “these are interesting, somewhat cutting-edge and certainly complex theories of liability.”  Mr. Raspanti also noted that the Western District of Pennsylvania has typically not seen a great deal of qui tam litigation and that “Mr. Hickton (the U.S. Attorney for the Western District of Pennsylvania who as sworn in in 2010) is obviously changing the focus of that office.” 

For more information, please see:
http://www.law.com/jsp/pa/PubArticleFriendlyPA.jsp?id=1202553692816

The federal government accused Lenox Hospital of fraudulently inflating its charges for services provided to Medicare patients in order to obtain higher supplemental reimbursements that Medicare pays to health care providers in cases where the cost of care is unusually high.  Specifically, between February 2002 and August 2003, the hospital raised room and board charges and manipulated its overall charge structure to make it appear as if the treatment given to certain patients was unusually costly when, in fact, it was not.  As a result, the hospital received Medicare payments it would not have otherwise obtained. 

In announcing the settlement, the U.S. Attorney for the Southern District of New York stated that his office would remain vigilant in protecting the integrity of the Medicare program and recovering taxpayer funds from health care institutions that fail to comply with Medicare regulations. 

Lenox Hospital is to pay the amount required under the settlement by May 14, 2012.

For more information, please see:
http://www.justice.gov/usao/nys/pressreleases/may12/lenoxhillsettlement.html

An investigation conducted by the U.S. Department of Health and Human Services – Office of the Inspector General, FBI, area federal prosecutors, the Tennessee Bureau of Investigations and the Tennessee Valley Authority Office of Inspector General revealed that from at least 2001 through 2006, Apex Medical Group, doing business as Nephrology Consultants and affiliated dialysis centers had submitted inaccurate claims to government health programs, including Medicare and TennCare, for a variety of dialysis services.  These inaccurate requests for payment took the form of upcoding for physician services whereby a medical provider submits a bill for a particular procedure when a less expensive type of treatment was actually provided.

According to the U.S. Attorney’s office, Apex Medical Group has agreed to compensate the federal and state governments for its improper billing practices.

For more information, please see:
http://www.knoxnews.com/news/2012/may/03/physicians-group-to-pay-436-million-in-over/

Abbott Labs was charged with promoting the drug for uses which had not been approved as safe and effective by the Food and Drug Administration.  In addition to pleading guilty, Abbott Labs has also agreed to pay $1.5 billion to resolve its criminal and civil liability.  The $1.5 billion payment, the second largest by a drug company, is made up of a criminal fine and forfeiture of $700 million and civil settlements with federal and state governments in the amount of $800 million. 

Furthermore, Abbott Labs will be subject to court-supervised probation and Abbott Labs’ CEO and Board of Directors will be required to satisfy certain reporting requirements.

For more information, please see:
http://www.justice.gov/opa/pr/2012/May/12-civ-585.html

Boerman presented suspicious billing activity that she discovered to the library’s previous administration.  She claimed that she was ignored by former library director Anne Marie Gold.  Besides not acting on her concerns Boerman also claims that her bosses denied her promotions, pay raises, and “generally made her life miserable.” 

Boerman first brought her concerns to her supervisors in April 2004.  After she was rebuffed by her bosses, she published a series of articles that prompted investigations by the grand jury and the District Attorney’s Office.

Former library director, Gold retired in 2008 amid the Sacramento County Grand Jury investigation into mismanagement of the agency.

The District Attorney’s investigation uncovered an estimated 1,400 padded invoices that cost the library $800,000.  It led to criminal charges against two library officials, facilities director Dennis Nilsson, 65, and security chief James E. Mayle, 67, as well as Mayle’s wife, Janie Rankins-Mayle, 63, who had set up a billing company to handle the maintenance accounts.  All three were convicted earlier this year and sentenced to prison terms ranging from five years and four months to 14 years.

Sacramento Superior Court Judge Allen H. Sumner later ordered the defendants to pay $800,000 in restitution.  Another hearing is scheduled for May 11, 2012 on the district attorney’s request to have a receiver appointed to try to recover the money.

For more information, please see:
http://www.sacbee.com/2012/05/01/4454886/library-whistleblower-settles.html#storylink=cpy

CMS will be diligently verifying provider credentials.  Providers and suppliers will be required to provide their National Provider Identifier numbers (NPI) when applying for Medicare and Medicaid reimbursements.  According to CMS, the agency together with the states can then use the NPI and provider credentials to connect specific claims to the ordering or certifying physician or eligible professional.

By issuing the final rule, CMS is planning to eliminate Medicare fraud and save taxpayers nearly $1.6 billion over 10 years.

For more information, please see: 
http://www.fiercehealthcare.com/story/cms-issues-final-rule-save-16b-fraudsters/2012-04-25?utm_medium=nl&utm_source=internal

 The allegations were brought to the government in two separate whistleblower lawsuits filed under the qui tam provisions of the False Claims Act and statutes.  Relators, Cassie Bass a pharmacy technician and former Walgreens employee, and Jack Chin a pharmacist will receive $1,277,172 from the U.S. government for filing the actions.  The federal government will receive $7,298,124. 

Barbara L. McQuade, U.S. Attorney for the Eastern District of Michigan states that patients should “make decisions based on legitimate health care needs.”  By luring customers in through gift cards and other enticements, Walgreens manipulated customers into selecting a pharmacy for the wrong reasons.  When a person’s health is at stake, the decision cannot be based on gifts. 

Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice highlights the government’s dedication to protecting unsuspecting customers of prescription drugs.  He states that, “this case represents the government’s strong commitment to pursuing improper practices in the retail pharmacy industry that have the effect of manipulating patient decisions.” 

The Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative was announced in May 2009 by Attorney General Eric Holder and Secretary of the Department of Health and Human Services Kathleen Sebelius.  The program was formed to reduce and prevent government health care fraud, which includes the Medicare and Medicaid programs.  By January 2009, the government had recovered  a total of $9 billion through one of its most powerful tools, the False Claims Act. 

For more information, please see: http://www.justice.gov/opa/pr/2012/April/12-civ-505.html

The government alleges that McKesson, a large drug wholesaler, reported inflated pricing information for a large quantity of brand name drugs to First DataBank (FDB), a publisher of drug prices that are used by most state Medicaid programs to set payment rates for pharmaceuticals.  The false information caused FDB to publish inflated AWPs (Average Wholesale Price) for those drugs.  

The Medicaid program is funded jointly by the federal and state governments.   This settlement resolves claims based on the federal share of Medicaid overpayments.  State governments can separately negotiate with McKesson to resolve claims based on the states’ shares of the Medicaid overpayments.

 For more information, please see:
http://www.justice.gov/opa/pr/2012/April/12-civ-539.html

The Defendants include Japanese company, Toyo Ink Manufacturing Co. Ltd. and its U.S. subsidiaries: Toyo Ink International Corp., located in New York; Toyo Ink America LLC, located in Illinois; and Toyo Ink Manufacturing America LLC, located in New Jersey.  Toyo Ink, which has operations worldwide, is a leading provider of printing inks.

The government alleges that Toyo Ink Manufacturing Co. Ltd. and its subsidiaries knowingly misrepresented the country of origin on documents presented to U.S. Customs and Border Protection to avoid paying antidumping and countervailing duties on imports of the colorant carbazole violet pigment number 23 (CVP-23).  Although Toyo’s CVP-23 imports from China and India underwent a finishing process in Japan and Mexico, the complaint alleges that this process was insufficient to change the country of origin.

The Department of Commerce assesses antidumping and countervailing duties, which are collected by U.S. Customs, to protect U.S. businesses by offsetting unfair foreign pricing and government subsidies.  Imports of CVP-23 from China and India have been subject to these duties since 2004.  

For more information, please see:
http://www.justice.gov/opa/pr/2012/April/12-civ-523.html

The flares were used during nighttime combat in Iraq and Afghanistan.  The government alleges that the flares provided by ATK were incapable of withstanding a 10-foot drop test as required by specifications.  During the test, flares either exploded or ignited, and ATK was aware of this issue at the time it submitted claims for payment. 

The investigation team was led by the Defense Criminal Investigative Service, the Air Force Office of Special Investigation, the Navy Naval Criminal Service, the Army Criminal Investigative Command and auditors from the Defense Contract Audit Agency, and the Defense Contract Management Agency.  Technical support was provided by the Army Research Laboratory in Aberdeen, Md., and several other agencies. 

“Our men and women in combat deserve equipment that meets critical safety and performance requirements,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division.  The U.S. government plans to diligently pursue entities that put the lives of our soldiers in jeopardy to prevent undue harm from occurring and recover American taxpayer monies.

For more information, please see:
http://www.justice.gov/opa/pr/2012/April/12-civ-520.html