Archive for March, 2010

CCHS Settles Largest False Claims Act Case in Delaware History

Friday, March 12th, 2010

Christiana Care Health System (CCHS) has agreed to pay the United States and the State of Delaware $3.3 Million to settle a whistleblower lawsuit that alleged that CCHS paid kickbacks to, and entered into improper self-referral relationships, with a physicians’ practice located in New Castle, Delaware.

The qui tam whistleblowers were represented by Marc S. Raspanti, Kevin E. Raphael, and Michael A. Morse, of the national whistleblower law firm of Pietragallo Gordon Alfano Bosick & Raspanti, LLP.

The “qui tam” whistleblower lawsuit alleged that during the period from January 1997 to February 2003 CCHS violated the Federal False Claims Act, Federal Anti-Kickback Statute, Federal Stark Law, the Delaware Anti-Kickback Statute, and the Delaware False Claims act by certifying, in claims submitted to Medicare and Medicaid, that CCHS was in compliance with all laws and regulations, when in fact CCHS knew, deliberately ignored, or recklessly disregarded the fact that: 

 (a) CCHS was paying fees to the physicians’ practice under an “evergreen” contract that was executed in 1989, which fees, in some cases, were multiples of what Medicare or Medicaid paid CCHS as reimbursement for those services, in order, as alleged, to illegally induce the physicians’ practice to make referrals to CCHS; and/or 

(b) Claims that CCHS submitted to Medicare and Medicaid were not reimbursable because CCHS and the physicians’ practice had an impermissible “financial relationship” as defined in the Stark Statute.

Attorney Marc S. Raspanti praised the courageousness of the qui tam whistleblowers in stepping forward and uncovering one of the largest false claims cases ever in the State of Delaware.  Raspanti added that “this is a landmark whistleblower case because it is one of the largest ever in the State of Delaware, and because it sends a strong signal to healthcare providers that kickbacks and lucrative self-referrals violate the law and will not be tolerated.”

Attorney Kevin E. Raphael also credited the successful resolution of the case to the strong partnership between the Relators and the federal and state prosecutors, including: United States Attorney David C. Weiss; Delaware Attorney General Joseph R. Biden, III; Assistant United States Attorneys Shannon T. Hanson and Seth M. Beausang; former Delaware Deputy Attorney General Daniel R. Miller; Lawrence M. Kutys, an auditor in the United States Attorney’s Office; and former Delaware HHS-OIG Special Agents Conrad J. Quarles and Edward J. McCusker.

Attorney Michael A. Morse commented that the goal of the Stark Law, Federal Anti-Kickback Statute and Delaware Anti-Kickback Statute is to ensure that a physician’s professional judgment in referring patients for health care services is not compromised by improper financial arrangements offered to that physician. 

Houston School District Settles E-Rate False Claims Case

Friday, March 12th, 2010

The Houston Independent School District has agreed to relinquish millions of dollars in requests for federal funds and to pay a total of $850,000 as part of a civil settlement relating to allegations that the school district violated the False Claims Act in connection with the Federal Communications Commission (FCC) E-Rate Program, the Justice Department recently announced.

The E-Rate program, which Congress created in the Telecommunications Act of 1996, provides funding for needy schools and libraries to connect to and utilize the Internet. Under the program, which is funded by fees collected from telephone users, schools apply for funds to pay for hardware and monthly connectivity service fees. The FCC oversees the E-Rate program.

The United States contended that the Houston Independent School District provided false information to the E-Rate program and otherwise violated the program’s requirements by engaging in non-competitive bidding practices for E-Rate contracts. The United States further alleged that school district officials received gratuities from technology vendors, including trips, meals and loans.

This settlement resolves a very interesting, novel False Claims Act case involving an FCC Program that has not received much attention prior to this lawsuit.  This settlement could cause additional suits to be filed against other school districts, as the public beomes more aware of schemes in impacting this Program.