Archive for February, 2010

Three New York City Home Health Agencies Pay $9.7 Million to the United States to Settle False Claims Act Claims

Tuesday, February 2nd, 2010

The United States and the State of New York have entered into settlement agreements with three home health agencies to resolve allegations that the agencies submitted false claims to the New York Medicaid and Medicare Programs.

The New York Medicaid Program provides coverage for home health aides only if those aides have valid certificates showing that they received proper training.  The United States claimed that one of the agencies knowingly supplied aides with phony training certificates and then billed New York Medicaid for the aides’ services.  The United States also claimed that an agency knowingly billed for aides with phony certificates who were untrained and knowingly submitted claims to the Medicare Program for home health aide services purportedly supplied that were not actually provided.   

As part of this settlement, the United States is receiving approximately $9.7 million and the State of New York is receiving approximately $14.3 million, for a total recovery of $24 million.

The settlements resolve allegations in two lawsuits filed under the whistleblower provisions of the False Claims Act.  One whistleblower will receive $251,107 from the government’s recovery, while a second will receive $1,663.040 from the settlement.

More information can be found at:

Oklahoma Hospital Group Pays $13 Million to Settle False Claims Act Allegations

Tuesday, February 2nd, 2010

St. John’s Health System, headquartered in Tulsa, Oklahoma, has agreed to pay the United States $13,229,348.88 to settle allegations that it submitted claims to Medicare and Medicaid that were tainted by the hospital’s financial relationships with referring physicians.

Federal law prohibits health care providers like St. John’s from billing the federal healthcare program for referrals from doctors with whom the providers have a financial relationship, unless the relationship falls within certain exceptions.  Additionally, the Anti-Kickback Statute prohibits the payment of kickbacks for the referral of services that are paid for under a federal healthcare program.  In this case, St. John’s made payments to twenty-three individual physician or physician groups to induce referrals for medical services.

This case did not arise from a whistleblower.  Instead, this information was discovered in April of 2008 when St. John’s submitted a self-disclosure report to the Department of Health and Human Services Office of Inspector General where they acknowledged that the physician agreements may have run afoul of federal law. 

The Department of Justice press release can be found at:

Chevron Agrees to Pay More Than $45 Million Dollars to Resolve Allegations of False Claims for Royalties Under Payment

Tuesday, February 2nd, 2010

Chevron Corporation, Texaco, Unocal, Inc. and their affiliates (the Chevron Companies), have agreed to pay the United States $45,569.584.74 to resolve claims that they violated the False Claims Act by knowingly underpaying royalties owed on natural gas produced from federal and Indian leases. 

Responsibility for overseeing the collection of royalties on federal and Indian leases lies with the Minerals Management Service (MMS) of the U.S. Department of Interior.  Companies are required to report to the MMS the value of the natural gas produced from their federal and Indian leases and to pay a percentage of the reported value as royalties.  These royalties provide an important source of income for Native Americans, the United States, and various states.

The United States alleged that from March 1988 to November 2008 the Chevron companies improperly deducted from royalty values the cost of boosting gas up to pipeline pressures, used affiliate transactions to falsely reduce their reported value of gas taken from federal and Indiana leases, and improperly reported processed gas as unprocessed gas to reduce royalty payments.  Most of the $45 million will be distributed to federal, state and American Indian accounts that were affected by the Chevron Companies’ underpayment of natural gas royalties and improper deductions. 

This is not the first settlement involving allegations of underpayment of royalties.  The Justice Department previously settled with Burlington Resources, Inc. for $105.3 million.  Shell Oil Company for $56 million and Dominion Exploration and Production Company for $2 million. 

The whistleblower initially filed suit in Texas.  Because the whistleblower is deceased, his heirs will $12,303,787.88, plus interest, as part of this settlement. 

More information can be found at:

University of Phoenix Settles False Claims Act Lawsuit for $67.5 Million

Tuesday, February 2nd, 2010

The University of Phoenix has agreed to pay $67.5 million to the United States to resolve allegations that its student recruitment policies violated the False Claims Act.  Two former University of Phoenix employees alleged that the University accepted federal student financial aid in violation of statutory and regulatory provisions that prohibit post-secondary schools from paying admissions counselors certain forms of incentive based compensation tied to the number of students recruited.  For bringing this alleged fraud to light, the two whistleblowers will receive $19,000,000 from the settlement.

Notably, the United States did not intervene in this action, although it did provide support and assistance to the whistleblowers at many stages of the litigation, including filing briefs with the court when the case was on appeal to the 9th Circuit Court of Appeals. 

More information can be found at: