Contact our Georgia national whistleblower lawyers today. Call us at 770-643-1606

Beaumont To Pay $84.5 Million To Settle False Claims Act In Federal Whistleblower Case

Bothwell Law Group filed a case that aided whistleblowers in the reporting of fraudulent activity by William Beaumont Hospital in Detroit, Michigan. The hospital agreed to pay an $84.5 million settlement to resolve allegations under the False Claims Act of improper relationships with eight referring physicians that led to the submission of false claims to the Medicare, Medicaid and the military Tricare programs.

Federal Whistleblower Attorney

If you have witnessed misuse, fraud or waste of government funds and feel compelled to do something about it, contact us at Bothwell Law Group at 770-643-1606.

Settlement Press Releases:

Atlanta Dentist to Pay Settlement

whistleblower awards

Press Release Source Here

The United States Attorney’s Office for the Northern District of Georgia announced that it has reached a settlement with Dennis Jaffe and Dennis B. Jaffe D.M.D., P.C., to pay $324,327.05 to settle health fraud claims—specifically that Jaffe violated the False Claims Act by fraudulently billing Medicaid for tooth extraction procedures and for fraudulently billing for services rendered by a dental assistant when Jaffe was not present in the office. Under the terms of the settlement, Jaffe is also excluded from all federal and state healthcare programs.

In addition to the civil settlement, Jaffe also pleaded guilty to a charge of theft from a healthcare benefit program in a separate federal criminal action and was sentenced to serve one year of probation. As part of the plea, Jaffe agreed to surrender his dental license.

“Citizens rely on dentists to treat all patients in accordance with the approved standards of care,” said Acting U.S. Attorney John Horn. “Patients were placed at risk when a dental assistant, without Jaffe present to supervise, performed procedures a licensed dentist must oversee. The defendant also enriched himself at the expense of those patients by marking up the bills to Medicaid for the services he was not performing.”

“All patients should be entitled to the same level of care and providers who choose to cut costs and increase profits by using unlicensed staff bring shame upon the entire profession and more importantly jeopardizes the safety of patients,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “Dr. Jaffe’s case should stand as a warning to those who choose to put profits above patient care.”

J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “The FBI, in working with Health & Human Services investigators, is proud of the role that it continues to play in ensuring that federally funded healthcare programs such as Medicaid are not abused by providers such as Mr. Jaffe. The FBI asks that anyone with information regarding such matters report it to authorities by contacting their nearest FBI field office.”

Georgia Attorney General Sam Olens stated: “The State’s Medicaid Fraud unit is pleased to work with our federal partners in attacking fraud upon vital healthcare programs. Dr. Jaffe’s actions are inexcusable and clearly warranted the administrative, civil, and criminal actions. I want to thank Assistant Attorneys General Kevin D. Bradberry and James P. Mooney for all of their hard work on the case.”

The civil settlement resolves allegations that Jaffe, a 71-year-old dentist from Atlanta, Georgia, fraudulently sought payment from Medicaid for higher and more expensive levels of service than were actually performed, a practice commonly referred to as “upcoding.” The settlement also resolves claims that Jaffe unlawfully billed for services rendered by an unsupervised dental assistant on days in which Jaffe was not present in the office. Under Medicaid regulations and Georgia law, it is unlawful for dental assistants to render any care outside of the direct supervision of a licensed dentist.

The civil settlement resolves a lawsuit filed by Michelle Smith under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery obtained. The case, pending in the Northern District of Georgia, is filed under United States ex rel. Michelle Smith v. Dennis B. Jaffe D.M.D., P.C. and Dennis B. Jaffe, Civ. 2:13-CV-1732. The Federal government will receive $190,635.67, and the State of Georgia will receive the remainder of the settlement. Ms. Smith will receive a share of the settlement payment that resolves the qui tam suit that she filed. The claims in the civil settlement are allegations only, and there has been no determination of liability.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $24 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.

The case was investigated by Special Agents of Health & Human Services, Office of Inspector General and the Federal Bureau of Investigation as well as investigators with the Georgia Medicaid Fraud Control Unit.

The civil settlement was reached by Assistant U.S. Attorney David A. O’Neal and Georgia Assistant Attorney General Kevin D. Bradberry. The criminal case was prosecuted by Assistant U.S. Attorney Nathan Kitchens and Georgia Assistant Attorney General James P. Mooney.

*We do not claim ownership of the above article, we are citing this government information originating here.

AstraZeneca and Cephalon Pay $54 Million

Two False Claims Act cases have settled, resulting in $54 million in payouts.

Quarterly Rebates to Medicaid

Pursuant to the Medicaid Drug Rebate Program, each quarter, drug manufacturers are required to pay rebates to state Medicaid programs. This is in exchange for Medicaid’s coverage of the manufacturers’ drugs.

These quarterly rebates are based partly on the Average Manufacturer Prices (AMPs) the manufacturers report to the government per each covered drug.  It follows that the higher the AMP for a given drug, the higher the rebate state Medicaid programs get from the manufacturer.

Underreporting AMP’s

Both AstraZeneca and Cephalon allegedly underreported AMPs for several of their drugs. They did so by improperly reducing the reported AMPs for service fees they paid to wholesalers.

By underpaying quarterly rebates to state Medicaid programs, federal officials say  it caused the United States to be overcharged for its payments to states for the Medicaid program.

Millions in Settlement Payouts

AstraZeneca will have to pay $46.5 million, plus interest. This settlement resolves the allegations it knowingly underpaid rebates owed through the Medicaid Drug Rebate Program.

$26.7 million of that, plus interest, will be going to the United States. The remaining $19.8 million will go to the states participating in the settlement.

Similarly, Cephalon will be paying $7.5 million, along with interest, to settle similar allegations. $4.3 million of the settlement will go to the United States and the remaining $3.2 million will be divided among the states participating in the settlement.

These two settlements partially resolve a lawsuit filed under the whistleblower, or qui tam, provisions of the False Claims Act. This act permits private individuals to sue on behalf of the government for false claims. It also allows them to share any recovery.

 

 

New Drug Causing Problems

A very powerful new painkiller is taking over the market and has become a $100 million business. But, questions are lurking about how the drug is sold and to whom.

In 2012, a new narcotic called Subsys, was approved by the F.D.A for use by cancer patients. It is used when painkillers like morphine fail to provide relief. The intended use is for the cancer patients who are already using around the clock painkillers. The F.D.A. warned that it should only be prescribed by oncologists and pain specialists. However, according to data provided by Symphony Health, only about 1 percent of prescriptions for Subsys are written by oncologists.

Nearly half of the prescriptions for Subsys are written by pain specialists and the rest are written by a wide variety of doctors, including dentists, neurologists, podiatrists, and general practice physicians.

Marketing Against F.D.A’s Regulations

This may all be due in part to the company’s aggressive marketing strategy.  The powerful drug, Subsys, is from Insys Therapeutics in Chandler, AZ. According to several former Insys sales representatives, the company aggressively markets the drug to physicians who do not treat many cancer patients. They also pay the sales force higher commissions for selling higher doses of the drug.

The problem with this model of marketing is that under F.D.A. rules, manufacturers can market prescription drugs for approved uses only. However, doctors are allowed to prescribe drugs as they see fit.

It appears that part of Insys’s marketing strategy relies on the assumption that patients will eventually need more and more of the drug, as well as higher doses. The higher doses are more expensive than the lower doses and the sales reps are paid more for selling higher doses.

Subsys is sprayed under the tongue and takes effect quickly. This is wonderful for cancer patients who are in intense pain. This is bad news for other patients who aren’t already taking pain medicine. Respiratory distress and death can occur if taken by people who aren’t using painkillers regularly.

Settlements For Encouraging Doctors To Prescribe Drugs For Off-Label Uses

Throughout the last 10 years, billions of dollars in settlements have been paid by pharmaceutical companies to settle claims that they encouraged doctors to use drugs for off-label or nonapproved treatments just to increase profits and sales.

Drug-safety experts are troubled at the wide range of medical experts who are prescribing the drug Subsys. This is especially true given the widely known abuse of narcotic painkillers. Subsys is a highly addictive and powerful drug.  According to Dr. Sidney M. Wolfe of Public Citizen Health Research, ““You’re essentially spreading the accessibility to a very potent, rapid-onset narcotic to a large number of people, and a number of them may get addicted.”

 

Insys Is Being Investigated

The federal health department’s Office of the Inspector General has subpoenaed documents from Insys related to its sales and marketing practices. Insys says it is cooperating with the investigation.

Wall Street Rise and Fall

Insys shares had an explosive growth when Wall Street investors bet the company’s sales would rise. Now, investors are counting on the stock to decline. After a neurologist in Michigan was arrested on federal fraud charges, the stock for Insys declined by a third in just a week. The neurologist was a top prescriber of Subsys.

Subsys Is Not Compatible With Having A Functioning Life

According to Dr. Lewis S. Nelson, a medical toxicologist at the New York School of Medicine, “If you’re waiting to die, you should die in comfort and dignity. It’s very different than if you’re attempting to have a functional life, because these drugs are relatively incompatible with having a functional life.”

The Future for Subsys

Despite everything, sales for Subsys are growing rapidly. The company reported the first quarter of 2015 saw $40.7 million, while the first quarter of 2014 was at $9.7 million. Insys announced earlier this year that they intend to seek approval to market Subsys for a broader range of uses, including uses for children, for burn victims and for use in emergency rooms.

 

Game Changer for Whistleblowers

False Claims Act | SEC Whistleblower Claim

It looks like there has never been a better time to be a whistleblower. This is especially true for public companies or within the securities industry.

In 2010 the Securities & Exchange Commission’s (SEC) established a whistleblower awards program.  As a result, whistleblowers now have unprecedented financial incentives to disclose potential misconduct to the government.  Also, they are enjoying extraordinary legal protection for doing so.

Nowadays even compliance personnel, the employees tasked with identifying internal misconduct within a company, are receiving substantial payouts for reporting their own companies in some instances.

However, if you are the company being faced with a whistleblower, the situation has never been more difficult. The companies face several problems. One is the legal minefield when trying to deal with reports of misconduct. Another is the consequence of increased financial incentives for the whistleblowers to report actual or perceived misconduct. On top of it all, the companies are dealing with all this under an extremely tight reporting timeline.

Before Financial Incentives, Whistleblowers Were Scared To Speak Out

Before the awards program was established in 2010, whistleblowers had very little incentive to speak out.  Quite the opposite. They had incentive to stay quiet in order to avoid retaliation.

In 2002, the Sarbanes-Oxley Act of 2002 went into effect and whistleblowers were protected against retaliation. However, this provision was not only weak, it was often ineffective.

Paradigm Shift In 2010

The passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 changed everything for whistleblowers. This was the first time whistleblowers were offered a financial reward for whistleblowing relating to securities violations.

Million Dollar Settlements

Dodd-Frank directed the Commission to pay eligible individuals when the original information they provided lead to SEC and other enforcement actions to a monetary sanction over $1,000,000.  What does that mean for the whistleblower? With awards ranging from 10 to 30 percent of the total amount of money collected in a case, it means a lot!

Non-US Awards

The Commission determined that whistleblower awards need not be limited to those in the United States. Four of the 17 whistleblower awards to date were to whistleblowers living in foreign countries.

Penalties for Retaliation

Beyond the Sarbanes-Oxley Act of 2002, Dodd-Frank broadly prohibited retaliation against whistleblowers who report possible wrongdoing.

Thanks to the stringent protection and the financial incentives, 17 whistleblowers have received awards under Dodd-Frank, paying out nearly $50 million. The number of whistleblowers continues to rise.  The first quarter of 2015 saw a 20 percent increase in the number of whistleblower tips over the same quarter last year.

What companies subject to the SEC’s oversight should be concerned about:

  • The SEC has expressed intense interest in retaliation cases.
  • The SEC has recently granted awards to a company’s own compliance officers.
  • The SEC has voices a serious concern about the use of confidentiality agreements that may suppress SEC whistleblowers.

 

If you are a whistleblower or are considering being a whistleblower, contact a specialized whistleblower attorney as soon as possible.

Historical Amount of Medicare Fraud Arrests

Despite the historical number of Medicare fraud arrests, more are set to come. 

According to Modern Healthcare reporter Lisa Schencker, “Federal officials announced Thursday the largest coordinated, criminal Medicare fraud takedown—and the first large-scale effort to focus on Medicare Part D fraud—in the history of the U.S. Justice Department.

Over the last three days, the Medicare Fraud Strike Force has unveiled charges against 243 individuals across the country accused of falsely billing $712 million to Medicare in a number of separate schemes, said U.S. Attorney General Loretta Lynch. Those charged include 46 doctors, nurses and other licensed medical professionals.”

Of those arrested, more than 44 have been charged with fraud related to Medicare’s drug benefit program – Medicare Part D.

HHS Inspector General Daniel Levinson said costs in Medicare Part D reached $121 billion last year. “Our focus on Medicare Part D continues because more than 41 million Americans depend on that program, and its integrity must be protected,” Levinson said.

Law firms, like Health Law Partners, are starting to see a lot of fraud enforcement in the pharmacy area.

Medicare Part D More Difficult to Prosecute

Since Medicare Part D payments are capitated, instead of being fee-for-service, prosecuting in this area can be more difficult to prosecute than other areas of Medicade, according to Patrick Burns, co-director of the Taxpayers Against Fraud Education Fund.

Tony Maida, a former deputy chief of the administrative and civil remedies branch of HHS’ Office of Inspector General, also noted in a statement that the announcement Thursday “was packaged together by the government to create a high level of media and public exposure, as well as for a deterrent effect.”

Types of Charges Against the 243 Individuals

In this latest federal effort to crack down on fraud, the 243 individuals accused were charged with a variety of crimes including “conspiracy to commit healthcare fraud, violating the anti-kickback statute, money laundering and aggravated identity theft in areas including home healthcare, psychotherapy, physical and occupational therapy, durable medical equipment and pharmacy fraud.”

Who’s Investigating These Cases?

Medicare Strike Force teams from the Fraud Section of the Justice Department’s Criminal Division as well as U.S. attorney’s offices around the country are prosecuting and investigating these cases.

If you are aware of Medicare fraud, contact a Medicare Fraud Attorney as soon as possible.

 

Endangering Babies For Profit

Bottom line: Medicaid pays the same amount for a Midwife as for an Ob-Gyn. Thus, some hospitals have a financial incentive to push even the high-risk patients to use Midwives rather than doctors. Unfortunately, this is happening at considerable risk and sometimes serious damage to patients.

$100 Million Lawsuit Filed

$100 Million federal law suit was filed against Indiana University Health and 2 associated medical organizations, Healthnet and MDWise.  Allegations state “Contrary to their carefully crafted image of offering compassionate care for the indigent, two of the largest healthcare providers in Indianapolis put poor, pregnant women and their newborn babies at risk with a fraud scheme designed to increase revenues, regardless of the law or the risks to the most medically-fragile patients.”

A doctor at the hospital filed a complaint after what she saw there. Dr. Judy Robinson is the former medical director at the hospital. “I’m filing this lawsuit because of the abysmal care I witnessed these people receiving. And, after approaching IU Health, nobody would do anything.” Robinson pointed out that patients who should have received monitoring during their pregnancy didn’t receive the monitoring. “There was little to no physician involvement in the obstetrical care of these high-risk patients.”

Under the state Medicaid reimbursement rules, “Nurse midwives may not provide services to members with medically high-risk pregnancies. However, according to the lawsuit, lower-cost nurse midwives handled high-risk patients, in violation of the Medicaid regulations.

To make it worse, the hospital filed false-claims with the state and federal government for doctor services the patients never received. The hospitals are using midwives but getting reimbursed for using doctors.

Babies Permanently Damaged

According to Dr. Robinson, at least 3 babies suffered permanent neurological damage and 17 infants nearly missed a tragic outcome.

Watch the TV interview here. 

Thanks to whistleblowers like Dr. Judy Robinson, the lives of children may be dramatically changed for the better.

If you think you may have a whistleblower case, have a confidential talk with a whistleblower attorney as soon as possible. These are time-sensitive matters. A whistleblower attorney knows how to protect your rights and get results.

Children’s Hospital Pays Millions in Settlement

Hospitals around the country have been accused of violating the false claims act.  Children’s Hospital in D.C. is among them.

The allegations against Children’s Hospital

Children’s Hospital, Children’s National Medical Center Inc. and it’s affiliated entities, collectively known as CNMC faced claims of violating the False Claims Act. They are accused of submitting false claims reports and other applications to the Department of Health and Human Services (HHS) and to Medicaid programs in Virginia and the District of Columbia.

Violating False Claims Act Raises Health Care Costs for Everyone

“The false reporting alleged in today’s settlement deprived the Medicare Trust Fund of millions of taxpayers’ dollars,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “Such conduct wastes critical federal health care program funds and drives up the costs of health care for all of us.”
“The integrity of federal health care programs depends on honest and accurate reporting from the hospitals and other health care providers that receive hundreds of billions of tax dollars every year,” said Acting U.S. Attorney Vincent H. Cohen Jr. of the District of Columbia.  “This settlement demonstrates our commitment to defending the integrity of the system and ensuring that taxpayer money goes to meet the most critical health care needs.  We will continue to work with whistleblowers like the former employee who came forward in this case to battle waste, fraud and abuse that fuel the skyrocketing cost of health care.”

The settlement Agreement

Children’s Hospital agreed to pay $12.9 million in a settlement agreement. According to the settlement agreement, in two distinct ways, CNMC misstated information on cost reports and applications.  The HHS and Medicaid programs used the false information to calculate reimbursement rates to CNMC. The United States contended that CNMC falsely reported its available bed count on its application to HHS’ Health Resources and Services Administration under the Children’s Hospitals Graduation Medical Education (CHGME) Payment Program. This program provides federal funds to freestanding children’s hospitals to help maintain their graduate medical education programs. Such programs train pediatric and other residents.

The United States further contended that CNMC filed cost reports which misstated their overhead costs. These false reports resulted in overpayment from Medicare as well as the Virginia and District of Columbia Medicaid programs.

Allegations against CNMC were filed by James A. Roark Sr., a former employee of CNMC, under the qui tam or whistleblower provisions of the False Claims Act.  Under the False Claims Act, a private citizen can sue on behalf of the United States and share in any recovery. The United States is entitled to intervene in a False Claims Act lawsuit, as it did in this case.

From the $12.9 million settlement, Mr. Roark will receive $1,890,649.98.

Health Care Fraud Prevention and Enforcement Action Team (HEAT) Initiative

In May 2009, the Attorney General and the Secretary of Health and Human Services announced the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative. This was done in efforts to combat health care fraud. The two departments are working together to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of their most powerful tools is the False Claims Act.

$24.3 billion has been recovered through False Claims Act cases since January 2009. More than $15.3 billion involves fraud against federal health care programs.
Please note: This particular matter was handled by the U.S. Attorney’s Office of the District of Columbia with assistance from the Civil Division’s Commercial Litigation Branch and the HHS’ Office of Inspector General.
The case is United States ex rel. Roark v. Children’s Hosp., et al., No. 1:14-cv-00616 (D.D.C.).
The claims resolved by the settlement are allegations only, and there has been no determination of liability.

 

Average Joe Jailed for Medicaid Fraud

In today’s day and age, federal and state governments work tirelessly to protect the funding for public services such as Medicaid and Medicare. In the past, while the governments focused their fraud watches on hospitals and healthcare providers, they now look at Medicaid recipients themselves, including Melissa Letica Simmons, a 49-year-old woman from Gadsden County, Florida.

The Average Joe vs. Corporate Fraud

Florida Attorney General Pam Bondi said that Simmons, a home healthcare worker in Gadsden County, one of the poorer counties in Florida, had defrauded taxpayers to the tune of $13,000. As such, Bondi played a role in sentencing Simmons to six months in jail. However, just a few years prior, the state accused three major hospitals of defrauding Medicaid to the tune of millions of dollars. There was no criminal prosecution of any of the parties involved, and the hospitals managed an insignificant punishment – they repaid the funds they stole from taxpayers for only pennies on the dollar.

The State’s “Amicable Settlement”

A Floridian fraud case involving many different hospitals resulted in a statement directly from the state, saying it wanted to “resolve this matter amicably with our industry partners.” Thus, a poor woman receives a six-month jail sentence for a $13,000 crime while several large hospitals receive little to no punishment because the state wants an amicable relationship. Prosecutors rarely want amicable resolutions; they want to see the criminal punished to the extent allowed by law.

How Florida Legislature Views Healthcare Fraud?

According to the aforementioned truths, Florida seems to view those who commit fraud alone as evildoing criminals with an intent to steal from taxpayers. However, when an entire corporation is in on the theft, even to the tune of millions of dollars, it is chalked up to clerical error or misunderstanding. Rather than jailing those responsible – or even forcing them to pay back what they stole – these hospitals and other companies settle for just pennies in order to keep their reputations intact. The judge in the corporate case claims that the men involved had “already been punished” with the damage to their reputations.

As it turns out, it would seem that Aesop was right all along. Sometimes, the government chooses to “hang the petty thieves and appoint the great ones to public office” for no other reason than to set an example. With legislators like this, corporations will only continue to commit fraud, while the little guy remains afraid of his own “clerical errors”.

If you need help with a whistleblower law suit, call an experienced whistleblower attorney right away!

$9 Million Settlement Then Bankruptcy

United States Claims Global Computer Enterprises Utilized Non-Cleared Employees on Sensitive Projects

The United States, along with the Federal Bureau of Investigation (FBI), claims that Global Computer Enterprises (GCE) and its president, Raed Muslimani, knowingly put non-cleared employees on projects and software service contracts, a violation of the False Claims Act. As such, Muslimani and GCE have agreed to a settlement for $9 million.

What Happened?

According to representatives for the United States, Muslimani and GCE provided the US Department of Labor (DOL) and the Equal Employment Opportunity Commission (EEOC) with cloud software services for financial management. Later, GCE entered into software development contracts with the General Services Administration (GSA), the United States Secret Service, and the United States Coast Guard (USCG). According to the claims, Muslimani and GCE knowingly allowed engineers and other employees access to the files, even after they were specifically denied access to those files due to their immigration and citizenship statuses, overseas locations, and security clearance statuses.

Why Is This a Problem?

Many United States agencies regularly utilize information that is confidential for a purpose; the clearance levels assigned to such information prevent it from getting into the wrong hands and paving the way for terrorism and/or fraud. When the US Government hires companies to handle sensitive information, they expressly allow and/or deny certain individuals from handling this information due to its sensitivity. According to these civil claims, GCE, headed by Muslimani, allowed engineers and other employees access to sensitive information even though the contracts between the two specifically forbade it. As such, GCE’s actions indicate a breach of contract and an alleged violation of the civil False Claims Act.

What Is the Outcome?

GCE filed for Chapter 11 bankruptcy on Sept. 4, 2014. On Feb. 27 of this year, the United States filed a proof of claim to the Bankruptcy Court, which in turn approved the settlement (not a judgement) on Apr. 22. The FBI notes that there has been no determination of civil liability and the settlement is not an indication of such. The civil claims are allegations only. Government offices such as the FBI, the DOL, the EEOC, the USCG, and the Secret Service were all involved in the investigation of GCE and its president.

Although giving employees access to files during the software development process may not seem like a major offense, bear in mind that sensitive financial information is secret for a reason. If it falls into the wrong hands, the information could be used against the country as a whole.

If you are aware of a violation of the civil False Claims Act, contact a Whistleblower attorney as soon as possible.  Bothwell Law Group helps whistleblowers across the entire United States.

(Our firm did not represent parties listed in the article above).

$15 Million False Claims Act Settlement

False Claims Act | SEC Whistleblower Claim

Sixteen Hospitals Violate False Claims Act to the Tune of $15.69 Million

According to the US Justice Department, 16 hospitals across the country will repay the federal government nearly $15.79 million for claims submitted to Medicare for services deemed unreasonable or unnecessary. This is one of the largest violations of the False Claims Act to date.

The Involved Hospitals

Health Management Associates Inc., or HMA, owns and operates 14 of the involved hospitals. They include Central Mississippi Medical Center, Crossgate River Oaks (Mississippi), Dallas Regional Medical Center (Texas), Davis Regional Medical Center (North Carolina), East Georgia Regional Medical Center, Gilmore Regional Medical Center (Mississippi), Lake Norman Regional Medical Center (North Carolina), Lehigh Regional Medical Center (Florida), Medical Center of Southeastern Oklahoma, Natchez Community Hospital (Mississippi), Santa Rosa Medical Center (Florida), Southwest Regional Medical Center (Arkansas), and Summit Medical Center (Arkansas). Between the 14 hospitals, a payment of $15 million will reimburse the federal Medicare program. Wesley Medical Center in Mississippi will pay $210,000, and North Texas Medical Center will round out the rest with a payment of $480,000.

The Allegations

Between the years of 2015 and 2013, the 16 above hospitals allegedly billed Medicare for Intensive Outpatient Psychotherapy, or IOP services, which are programs designed to treat individuals with serious mental disorders, that they knew were not billable. According to the claim, these hospitals billed Medicare for unqualified IOP services. According to current law, hospitals may only bill Medicare for services under certain conditions. In this case, the patients’ conditions did not qualify for IOP, staff failed to track patients’ progress properly, the patients did not receive the right level of treatment, or individualized treatment plans were not the first course of action as per Medicare’s guidelines.

The Impact on Consumers

With millions of dollars lost each year due to false and fraudulent claims like these, it is no wonder that the costs of healthcare continue to spiral out of control. Millions of people in the US rely on Medicare, a program for senior citizens and the disabled, to help them cover the enormous costs of healthcare. Due to false claims like these, the costs of healthcare are on the rise and Medicare covers less than ever before. Seniors and disabled persons who are already struggling to make ends meet must purchase expensive supplementary plans and pay exorbitant prices for many lifesaving prescription medications.

Whether the 16 hospitals above knew they were committing fraud when they submitted the claims remains unknown. However, one thing is certain: hospitals and medical centers like these need stricter guidelines for claims submissions. The Medicare program’s guidelines are indeed difficult to follow at times, but doing could save consumers tens of millions of dollars every year on the cost of insurance premiums alone.

Are Today’s Prescription Drug Marketing Practices Killing People?

False Claims Act | SEC Whistleblower Claim

You might think that your doctor writes you prescriptions for medications based solely on your medical condition and the proper treatment, but that may not be the case. Reports show that some physicians are receiving “kick-backs” from pharmaceutical companies for writing certain prescriptions – all in the name of marketing – and that some of these drugs are causing death.

The Subsys Conundrum

Subsys is essentially an intranasal version of the opioid pain medication known as fentanyl, and it is the protégé of a company called Insys Therapeutics. While designed for the treatment of breakthrough pain in cancer patients, more and more physicians are prescribing it for off-label use. This is incredibly concerning since the Center for Disease Control, or CDC, reported that some 175,000 people died between 1999 and 2010 due to prescription opioid abuse. Only 120,000 people died from cocaine and heroin overdoses combined during that same period – an obvious indicator of the danger of potent opioid painkillers.

One Doctor’s Story

Dr. Orlando Florete received a sum of $18,874.03 from Insys Therapeutics during the last five months of 2013. What’s more, according to Freedom of Information Act documents, Dr. Florete also received $133,770.36 from TRICARE, the main insurance plan for the US military, for writing 16 prescriptions for Subsys. Astonishingly, it is perfectly legal for pharmaceutical companies to compensate physicians for recommending and discussing their products, including during very carefully worded seminars.

The Growth of Insys Therapeutics

Insys grew from $15.5 million in sales to over $222 million in just two years, raising many eyebrows. Speculation about Subsys is resounding, and while the company claims their organic growth is aided by growing numbers of physicians who increasingly prefer Subsys, despite the fact that the providers of pharmacy benefits refuse to cover the drug in all but a select few cases. Subsys sales are indeed growing – but not in a way that is beneficial to the patient. Instead, the product is increasingly lethal, especially in patients who take it for off-label conditions like headaches. The insert that comes inside the package clearly contraindicates the use of the drug for headaches or in patients who have very little opioid tolerance, yet physicians still prescribe it, and people are dying.

The Role of Insys

What is even more startling is the fact that Insys seems to use sex appeal to convince doctors to prescribe Subsys to patients who are not the right candidates. Insys purposely hires attractive females to sell their medications, and these women have no experience whatsoever in the pharmaceutical industry. In fact, some come from adult entertainment backgrounds. These women learn to explain the products, to listen, and to spend time with physicians, ultimately imploring them to prescribe more of the medication. It seems that the ploy works, and this explains the phenomenal jump in Insys’ sales during that two-year period.

No matter which way you look at it, there are people in the US taking Subsys who absolutely do not need it, and for some of these people, the drug could prove fatal. However, with a unique sales force, a program in which physicians speak at seminars about the drug to convince their fellow doctors of its efficacy, and a stream of cash ready to be doled out to prescription writers, it seems that the only way the trend will stop is with legal intervention.