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Archive for November, 2010
Marc Raspanti, a name partner of our firm, was featured in Sunday’s Philadelphia Inquirer. Please click on the following link to read about Marc Raspanti’s career and opportunities for whistleblowers in today’s economic and legislative climate.
On November 10, 2010, U.S. District Court Judge Maurice B. Cohill, Jr., of the Western District of Pennsylvania denied the defendant’s Motion for Summary Judgment, thereby permitting the qui tam action by the doctors and U.S. Government to go forward. Doctors Dilbagh Singh, Paul Kirsch, Rao Nadella, and Martin Jacobs filed a qui tam action pursuant to the False Claims Act against Bradford Regional Medical Center (“BRMC”), V&S Medical Associates, LLC, Peter Vaccaro, M.D., and Kamran Saleh, M.D. Doctors Singh, Kirsch, Nadella and Jacobs alleged that the Defendants submitted, or caused to be submitted, false claims for Medicare payment which arose out of referrals from Doctors Vaccaro and Saleh to the BRMC in violation of the Stark Act and the Anti-Kickback Act. The Stark Act is contained at Section 1395 of Title 42 of the United States Code and prohibits a physician from making a referral to an entity for the provision of Medicare- or Medicaid-paid services where the physician has a financial relationship with the entity. The False Claims Act prohibits any individual or business from submitting, or causing someone else to submit, a false or fraudulent claim or payment to the government.
In his Opinion and Order, Judge Cohill stated that (1) financial relationship existed between BRMC and Doctors Vaccaro and Saleh pursuant to the Stark Act, (2) none of the exceptions under the Stark Act applied to the defendants, (3) none of the “safe harbor” provisions under the Anti-Kickback Act applied to the Defendants, and (4) BRMC submitted claims for payment to Medicare based on referrals from Doctors Vaccaro and Saleh pursuant to the Stark Act and received payment from Medicare for such claims.
For more information see: http://alturl.com/dai37
On October 20, 2010, the Department of Health and Human Services’ (“HHS”) Office of Inspector General (“OIG”) announced guidelines enabling the barring of executives of pharmaceutical companies from contracting with U.S. Government health programs when they know, or if the OIG concludes they should have known, about Medicare fraud at their company. Violations of certain law, including patient abuse or a felony conviction of health-care fraud, require automatic exclusion by law. In other cases, like a misdemeanor conviction, the OIG has the authority to bar an executive at his discretion.
The announcement of these guidelines follow the agreement by Glaxo-Smithkline (“GSK”) to pay criminal fines and forfeitures totaling $150 million and a civil settlement under the False Claims Act and state claims for $600 million. GSK’s settlement related to manufacturing and distribution of adulterated drugs made at a GSK facility in Cirda, Puerto Rico. The facility was operated by a subsidiary of GSK, SB-Pharmco, Puerto Rico, Inc. It was alleged that GSK sold certain amounts of drugs whose purity or quality fell materially below the strength, purity, or quality specified in the applications to the FDA.
On November 5, 2010, an engineering contractor, Louis Berger Group, Inc. (“LBG”), agreed to pay over $69 million to settle claims of defrauding the U.S. Government related to reconstruction contracts in Iraq and Afghanistan. LBG is a New Jersey-based engineering consulting company which performed engineering contracts for the U.S. Department of Defense and United States Agency for International Development in Iraq and Afghanistan. The allegations, which resulted in civil and criminal charges, stemmed from an overbilling scheme uncovered by a whistleblower at the firm. An investigation began in 2006 when a senior LBG financial analyst and auditor, Harold Salomon, filed a whistleblower lawsuit under seal accusing LBG of illegally billing the U.S. Government for costs not directly attributable to its work in Iraq and Afghanistan. The overbilling included legal and accounting fees, rent, and other general company costs related to LBG’s offices in New Jersey and Washington D.C. LBG and government officials agreed upon a settlement whereby LBG would pay $18.7 million in criminal penalties and $50.6 million to resolve civil claims.
For more information see: http://alturl.com/89ahp
St. Joseph Medical Center in Maryland to Pay U.S. $22 Million to Resolve False Claims Act AllegationsThursday, November 11th, 2010
St. Joseph Medical Center has agreed to pay the United States $22 million to settle allegations under the False Claims Act that it paid unlawful remuneration under the Anti-Kickback Act and violated the Stark Law when it entered into a series of professional services contracts with MidAtlantic Cardiovascular Associates.
For more information see: http://www.justice.gov/opa/pr/2010/November/10-civ-1271.html
On October 26, 2010, the Washington State Investment Board announced that it will receive $11.7 million in a settlement with its former master custodian, State Street Bank. The dispute between the Board and State Street concerned the execution of certain foreign exchange transactions by the bank on behalf of the Investment Board, which oversees over $53 billion in assets, between 1997 and 2007.
According to Washington’s State Treasurer, James McIntyre, the settlement was the direct result of an internal investigation by the state prompted by two state false claims act suits filed against State Street in California. Washington did not file suit against State Street, which settled promptly after the results of the state’s investigation were disclosed.
For more information see: http://www.pionline.com/article/20101026/DAILYREG/101029919
On October 27, 2010, GlaxoSmithKline (“GSK”), the world’s fourth-largest pharmaceutical company by revenue, announced that it had finalized a settlement with the U.S. Government to resolve both civil False Claims Act allegations and criminal allegations related to GSK’s faulty manufacturing of prescription medications at the company’s former plant in Cidra, Puerto Rico. GSK’s Cidra facility, which was closed in 2009, was sent a warning by the Food and Drug Administration in 2002 for its lax manufacturing processes. In 2004, one of GSK’s former quality-assurance managers, Cheryl Eckard, filed a False Claims Act suit against the company. Ms. Eckard alleged that the company submitted various false claims to government health programs because the drugs manufactured at the Cidra plant were not safe and effective, and therefore should not have been covered by the programs. In 2005, the U.S. Marshals seized several lots of certain medications that had been manufactured at the Cidra plant, including the popular antidepressant Paxil. The U.S. Government proceeded to pursue both civil allegations against GSK (premised on Ms. Eckard’s original lawsuit) and criminal allegations. As a result of that investigation, GSK has now agreed to plead guilty to charges that medications made at the Cidra plant were mislabeled, mixed up in the wrong packaging, and mislabeled. The majority of the settlement – $600 million – will be provided to state and federal governments to resolve the false claims allegations against GSK. Ms. Eckard’s share of the settlement – $96 million – is the largest settlement attributable to a lone whistleblower in U.S. history. As Ms. Eckard’s attorney put it, however, the settlement is not just a victory for her, but will force drug manufacturers to improve their manufacturing processes, or risk suits by employee whistleblowers.