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Health Co. Asks High Court To Rein In FCA Pleading Rules

Posted on by Mike Bothwell
Healthcare Company Whistleblower Lawyer

Full Article here.

Molina Health has urged the U.S. Supreme Court to rein in pleading requirements for False Claims Act whistleblowers, saying that a circuit divide has loosened standards that will become a broader cudgel for contractual and regulatory issues.

The managed care firm — accused by former contractor Thomas Prose of improperly billing the government for Medicaid services — says the high court must reverse a Seventh Circuit decision and instead conclude that Federal Rules of Civil Procedure Rule 9(b) requires whistleblower-plaintiffs like Prose to allege specific false claims that Molina may have made to the government.

The company also wants the court to rule that an omission alone doesn’t necessarily constitute a false or fraudulent claim under the FCA, according to the writ, filed Feb. 14. Molina warned that inaction or an adverse ruling would further transform the FCA — meant specifically to catch fraudulent billing — into a dragnet for “fishing expeditions,” according to the writ.

“The FCA is one of the most frequently litigated statutes in the U.S. Code,” the writ argues. “Unless this court grants certiorari and holds that a request for payment that makes no specific representations cannot be treated as if it contains an implied false certification, the FCA will become precisely what this court has warned against: ‘a vehicle for punishing garden-variety breaches of contract or regulatory violations.'”

According to Prose’s 2017 lawsuit, his company GenMed ended a contract to provide Molina with care coordination services at nursing homes, but Molina kept billing Medicaid as though GenMed was providing the services. The government paid Molina a set rate per patient regardless of specific services they received, and Molina says it didn’t make fraudulent claims because it never requested payment for specific required services it did not provide.

U.S. District Judge Virginia M. Kendall dismissed the lawsuit against Molina in June 2020, finding that the allegations weren’t specific enough, but the Seventh Circuit reversed that decision last year.

The appellate court concluded in a 2-1 decision in August that Prose has plausibly argued that Molina unit Molina Healthcare of Illinois knew that services it failed to provide were a material part of its Medicaid managed care benefits contract. It also concluded that submitting a claim to the federal government carries the “implied” certification that a claimant complied with the underlying conditions of their contract, meaning an omission is tantamount to a false claim.

Chief Circuit Judge Diane S. Sykes issued a strongly worded dissent, asserting that her colleagues’ position broke with the circuit’s own precedent on Rule 9(b) and conflicted with the high court’s landmark ruling in Universal Health Services Inc. v. United States ex rel. Escobar page2image38116464, which rejected “implied” certification as a theory of FCA liability and found that an alleged false claim must be material to the government’s decision to pay, according to the writ. Molina raised similar arguments in a petition for en banc review last month.

The Eleventh Circuit joined five other circuits — the Third, Fifth, Ninth, Tenth and D.C. — in relaxing false claim pleading requirements, according to the writ. The First, Second, Fourth, Sixth, Eighth and Eleventh circuits have all held that plaintiffs must state particular false claims.

The split has long vexxed whistleblowers and government contractors alike.

A number of courts have also addressed the omission question, with the Fourth, Seventh, and D.C. circuits holding that omissions can constitute false or fraudulent statements, and the Third, Fifth, Ninth, and 11th circuits finding otherwise.

The divide has come before the high court several times before, periodically drawing the justices’ attention, but never winning certification. Two other petitions pending before the Supreme Court raise identical questions about specificity of claims, but the justices should take up Molina’s petition, the Fortune 500 company says, because it raises the additional question about whether an omission constitutes a falsehood.

Alternatively, the court should hold its petition pending a decision in either of those cases — Johnson et al. v. Bethany Hospice and Palliative Care LLC from the 11th Circuit and United States ex rel. Owsley v. Fazzi Assocs. Inc. out of the Sixth Circuit — if it decides to review them instead, Molina said.

Last month, the Supreme Court invited U.S. Solicitor General Elizabeth B. Prelogar to weigh in on the Bethany case, which involves a Georgia hospice company’s alleged kickback scheme.

Prose attorney Bruce C. Howard told Law360 on Tuesday that the Seventh Circuit ruling should stand.

“We continue to believe that there’s little likelihood that the Supreme Court will grant the petition for cert,” he said. “As Molina noted, one of the issues is already subject to a pending petition. Secondly, the Seventh Circuit unanimously denied a petition for rehearing en banc. We believe they got it right.”

Prose is represented by Bruce C. Howard of Siprut PC, and Neil M. Rosenbaum, Damon E. Dunn and Paul M. King of Funkhouser Vegosen Liebman & Dunn Ltd.

Molina is represented by Kelly Perigoe, Albert Giang, Jeffrey S. Bucholtz, Ashley C. Parrish, Quyen L. Ta, Anne M. Voigts, and Matthew V.H. Noller of King & Spalding LLP.

The case is Molina Healthcare of Illinois Inc. et al., Petitioners v. Thomas Prose, case number 21- 1145, in the U.S. Supreme Court.

Full Article here.  |  The Bothwell Law group does not claim ownership of this article.

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About the Bothwell Law Group:

Since 1996, the Bothwell Law Group has earned a national reputation for successful representation of whistleblowers in federal and state courts across the United States, and is one of only a handful of firms exclusively representing whistleblowers. Bothwell Law Group’s cases have resulted in the recovery of more than $400 million for the United States treasury and in the payment of millions of dollars in whistleblower rewards. Inquiries may be directed to Mike Bothwell at (770) 643‐1606, email Mike@WhistleblowerLaw.com.

Georgia Cracking Down on Medicare and Medicaid Fraud

Posted on by Mike Bothwell

$520,000 False Claims Act settlement is second this week.

The state of Georgia is cracking down on Medicare and Medicaid fraud.

If there’s any doubt on that score, just look at the two False Claims Act settlements that came out this week – a $20 million settlement with the Medical Center of Central Georgia in Macon, and a $520,000 settlement with Irwin County Hospital in Ocilla.

Mike Bothwell of the Bothwell Law Group in Atlanta, who helped settle the second case in less than 20 months, notes that heath care fraud cases can be complex, but that the law provides real rewards for whistleblowers who step up with insider information that leads to recoveries and an end to fraud schemes.

In his Irwin County Hospital case, won with the help of co‐counsel Brandon Hornsby at the Hornsby Law Group in Atlanta, the whistleblowers walked away with a $130,000 award for helping stop the fraud, and as compensation for the retaliation that followed.

Federal and State False Claims Acts allow private citizens with insider knowledge of fraud, waste, and abuse to bring an action on behalf of the governments in order to stop the fraud. If the case is won, the government can recover over three times the amount defrauded, and successful whistleblowers can receive between 15 and 30 percent of the governments’ recovery.

“It’s all about incentivizing integrity,” says Bothwell. “Chiselers are always incentivized to cheat. The False Claims Act sets things right by providing a countervailing incentive to do the right thing.”

There’s no question the False Claims Act works. Last year, the U.S. government and the states recovered well over $6 billion thanks to whistleblower‐initiated cases.

Bothwell notes that a lot of False Claims Act cases involve health care – a situation likely to continue as the Affordable Care Act kicks in.

The Macon hospital settlement involved allegation of upcoding for more expensive inpatient services when the billing should have been for less costly outpatient or observation services.

In the Irwin County Hospital case, the allegations involved kickbacks for patient referrals and for billing for improperly performed imaging services.

Bothwell notes that it looks like a real fraud‐fighting partnership is forming between Georgia Attorney General Sam Olen’s Medicaid Fraud Control Unit, the U.S. Department of Justice, and Georgia whistleblowers and their attorneys.

“We’re seeing a real public/private partnership that is bringing a real dividend for the American people. That’s exactly how the law is supposed to work.” Mike Bothwell, Whistleblower Attorney

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About the Bothwell Law Group:

Since 1996, the Bothwell Law Group has earned a national reputation for successful representation of whistleblowers in federal and state courts across the United States, and is one of only a handful of firms exclusively representing whistleblowers. Bothwell Law Group’s cases have resulted in the recovery of more than $400 million for the United States treasury and in the payment of millions of dollars in whistleblower rewards. Inquiries may be directed to Mike Bothwell at (770) 643‐1606, email Mike@WhistleblowerLaw.com.

For more information about the firm, FCA settlements and FCA experience, see

www.whistleblowerlaw.com

FINAL SETTLEMENT AGREEMENT   |   COMPLAINT

DOJ Targets Funders as Eleventh Cir. Upholds Whistleblower Win

Posted on by Mike Bothwell
Whistleblower Law

Below is a clip from Bloomberg Law, full article here: https://news.bloomberglaw.com/federal-contracting/doj-targets-funders-as-eleventh-cir-upholds-whistleblower-win

A $255 million Medicare fraud award will stand after the Eleventh Circuit refused Thursday to reconsider a panel’s decision greenlighting a successful whistleblower’s outside funding agreement.

The U.S. Court of Appeals for the Eleventh Circuit wasn’t swayed by the skilled nursing facility defendants’ assertion in a petition for rehearing that the False Claims Act expressly disallows third parties from receiving assigned fraud claims pursued in the U.S. government’s name.

The panel’s June 25 decision is the “first and only” by a federal court to give a whistleblower “the unlimited right to secretly reassign the government’s claims to any third-party speculator gambling with the government’s money,” the nursing facilities said in their petition challenging standing.

The panel’s decision was right because the whistleblower, who sold a 4% share in any recovery she received, still maintained sufficient control and interest in the litigation, said H. Vincent McKnight, Jr., of Sanford Heisler Sharp LLP in Washington.

Had the Eleventh Circuit agreed with the nursing facilities, whistleblowers not only wouldn’t be allowed to enter into such agreements, they also couldn’t, for example, use a line of credit with a bank to finance an FCA case, McKnight said.

U.S. Examining Outside Funded Suits

The appeals court’s decision comes at a time when the Justice Department, which has the power to stop FCA cases it doesn’t support, has voiced concerns about not knowing when third parties are funding cases it is investigating and litigating.

Stephen Cox, deputy associate for Attorney General William Barr, said early this year the agency was weighing what interest the U.S. has in funding agreements, and if it should require disclosures in some instances.

More recently, Justice attorneys have been told to engage in a “purely information-gathering exercise” to ascertain when third party funders are working with whistleblowers, and how much control they have over the cases, Ethan P. Davis, deputy assistant to the attorney general, told the Chamber of Commerce’s legal arm June 26.

Counsel for whistleblowers, however, have expressed worry over such governmental inquiries.

“The DOJ’s interest in learning whether a whistleblower has an agreement with a third party funder is cause for concern because that information could lead to DOJ using that information to dismiss otherwise meritorious cases,” said Mike Bothwell of Bothwell Law Group PC in Roswell, Ga.

“Animus” toward a limited liability company whistleblower was one reason why an Illinois federal court rejected a DOJ motion to dismiss a false claims case alleging kickbacks by drug makers last year.

The Justice Department maintained that disapproval of professional whistleblowers—the suit was one of nearly a dozen filed on behalf of the National Health Care Analysis Group—is a valid governmental reason for stopping a suit from going forward, said Judge Staci M. Yandle of the U.S. District Court for the Southern District of Illinois.

But the U.S. Court of Appeals for the Seventh Circuit reversed Yandle Aug. 17, ruling that the motion to dismiss should be granted and that it didn’t violate due process law.

An attorney who represents false claims defendants, including pharmaceutical companies, says DOJ’s inquiries could help the U.S. reasonably conclude that a case should be dismissed, or help explain why a settlement is being held up.

When the DOJ assesses fraud claims, it looks at whether whistleblowers have useful information from being insiders, or if they are just being opportunistic, said Scott D. Stein of Sidley Austin LLP in Chicago.

“Knowing who is behind a whistleblower’s suit can have a significant impact on the DOJ’s ability to settle with a defendant,” he said.

“If a whistleblower has a secret third party agreement that requires handing over a large cash payment, the whistleblower could hold up a resolution by pushing for more money, and the DOJ won’t know why,” said Stein.

 

The Bothwell Law group does not claim ownership of this article.

The full article is credited here: https://news.bloomberglaw.com/federal-contracting/doj-targets-funders-as-eleventh-cir-upholds-whistleblower-win

Throw Out Your Assumptions About Whistleblowing

Posted on by Mike Bothwell

Harvard Business Review recently published the below. See a portion below: 

Whistleblowing stories are all over the news. Some observers have attributed this to a systemic change in society. There are more stories about whistleblowing, the argument goes, because there are more crimes to report.

However, rather than an increase in criminal activity, we may instead be observing an increase in the willingness of employees to speak up. Consider the dramatic increase in claims of sexual harassment in 2017 as the #MeToo movement gained momentum. Was this a sudden increase in harassment, or an increased willingness to speak up about problems that have been ongoing for years?

Our research on employee whistleblowing, using previously unavailable data, shows for the first time that we may be in the golden age of accountability systems. In 2018, NAVEX Global, the leading provider of employee hotline and incident management systems, provided us secure, anonymized access to more than 2 million internal reports made by employees of more than 1,000 publicly traded U.S. companies.

Our study of the data led us to two important findings: First, whistleblowers are crucial to keeping firms healthy. The average manager seems to take these reports seriously and uses them to learn of and address issues early, before they evolve into larger, more costly problems. We also found that second hand reports are more credible and more valuable, on average, than firsthand reports.

Based on our research we’ve identified three lessons for leaders on effectively managing whistleblower systems.

View the 3 lessons and read full article here.

Whistleblowerlaw.com & Mike Bothwell Lawfirm does not claim or imply ownership of this article. 

Full article link here: https://hbr.org/2020/01/throw-out-your-assumptions-about-whistleblowing

Justice Department Recovers over $3 Billion from False Claims Act Cases in Fiscal Year 2019

Posted on by Mike Bothwell
Justice department logo

The United States Justice Department recently published the below article. See a portion below: 

The Department of Justice obtained more than $3 billion in settlements and judgments from civil cases involving fraud and false claims against the government in the fiscal year ending Sept. 30, 2019, Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division announced today.  Recoveries since 1986, when Congress substantially strengthened the civil False Claims Act, now total more than $62 billion.

“The significant number of settlements and judgments obtained over the past year demonstrate the high priority this administration places on deterring fraud against the government and ensuring that citizens’ tax dollars are well spent,” said Assistant Attorney General Hunt.  “The continued success of the department’s False Claims Act enforcement efforts are a testament to the tireless efforts of the civil servants who investigate, litigate, and try these important cases as well as to the fortitude of whistleblowers who report fraud.”

Of the more than $3 billion in settlements and judgments recovered by the Department of Justice this past fiscal year, $2.6 billion relates to matters that involved the health care industry, including drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, laboratories, and physicians.  This is the tenth consecutive year that the department’s civil health care fraud settlements and judgments have exceeded $2 billion.  The amounts included in the $2.6 billion reflect only federal losses, but in many of these cases the department was instrumental in recovering additional millions of dollars for state Medicaid programs.

In addition to combating health care fraud, the False Claims Act serves as the government’s primary civil tool to redress false claims for federal funds and property involving a multitude of other government operations and functions.  The Act helps to protect our military and first responders by ensuring that government contractors provide equipment that is safe, effective, and cost efficient; to protect American businesses and workers by promoting compliance with customs laws, trade agreements, visa requirements, and small business protections; and to protect other critical government programs ranging from the provision of disaster relief funds to farming subsidies.

In 1986, Congress strengthened the Act by increasing incentives for whistleblowers to file lawsuits alleging false claims on behalf of the government.  These whistleblower, or qui tam, actions comprise a significant percentage of the False Claims Act cases that are filed.  If the government prevails in a qui tam action, the whistleblower, also known as the relator, typically receives a portion of the recovery ranging between 15 and 30 percent.  Whistleblowers filed 633 qui tam suits in fiscal year 2019, and this past year the department recovered over $2.1 billion in these and earlier filed suits.

Health Care Fraud

The department investigates and resolves matters involving a wide array of health care providers, goods, and services.  The department’s health care fraud enforcement efforts not only recover money for federal health care programs, such as Medicare, Medicaid, and TRICARE, but also help deter fraud schemes that put patients at risk and increase health care costs.

Reflecting the department’s commitment to holding drug companies accountable for their role in the opioid crisis, two of the largest recoveries involving the health care industry this past year came from opioid manufacturers.  In one matter, as part of a global resolution of criminal and civil claims, Insys Therapeutics paid $195 million to settle civil allegations that it paid kickbacks to induce physicians and nurse practitioners to prescribe Subsys for their patients.  The kickbacks allegedly took the form of sham speaker events, jobs for the prescribers’ relatives and friends, and lavish meals and entertainment.  The government also alleged that Insys improperly encouraged physicians to prescribe Subsys for patients who did not have cancer, and lied to insurers about patients’ diagnoses to ensure payment by federal healthcare programs.  In another matter, Reckitt Benckiser Group plc paid a total of $1.4 billion to resolve criminal and civil liability related to the marketing of the opioid addiction treatment drug Suboxone, which is a formulation of the opioid buprenorphine.  As part of the resolution, RB Group paid $500 million to the United States to resolve civil allegations that it directly or through subsidiaries promoted Suboxone to physicians who were writing prescriptions for uses that were unsafe, ineffective, and medically unnecessary; promoted Suboxone Film using false and misleading claims that it was less susceptible to diversion, abuse, and accidental pediatric exposure than other buprenorphine products; and took steps to delay the entry of generic competition in order to improperly control pricing of Suboxone.

The department also pursued other cases involving drug manufacturers.  For example, Avanir Pharmaceuticals paid over $95 million to resolve allegations that it paid kickbacks and engaged in false and misleading marketing to induce healthcare providers in long term care facilities to prescribe the drug Neudexta for behaviors commonly associated with dementia patients, which is not an approved use of the drug.  The department also continued to investigate efforts by drug manufacturers to facilitate increases in drug prices by funding the co-payments of Medicare patients.  Congress included co-pay requirements in the Medicare program, in part, to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs.  This year, seven drug manufacturers – Actelion Pharmaceuticals US Inc., Amgen Inc., Astellas Pharma US Inc., Alexion Pharmaceuticals, Inc., Jazz Pharmacueticals Inc., Lundbeck LLC, and US Worldmeds LLC – paid a combined total of over $624 million to resolve claims that they illegally paid patient copays for their own drugs through purportedly independent foundations that the companies in fact treated as mere conduits.

The department also reported substantial recoveries involving a variety of other healthcare providers.  Pathology laboratory company Inform Diagnostics, formerly known as Miraca Life Sciences Inc., paid $63.5 million to resolve allegations that it paid kickbacks to referring physicians in the form of subsidies for electronic health records (EHR) systems and free or discounted technology consulting services.  Greenway Health LLC, an EHR software vendor, paid over $57 million to resolve allegations that it misrepresented the capabilities of its EHR product “Prime Suite” and provided unlawful remuneration to users to induce them to recommend Prime Suite to prospective new customers.  Encompass Health Corporation (formerly known as HealthSouth Corporation), the nation’s largest operator of inpatient rehabilitation facilities (IRFs), paid $48 million to resolve allegations that some of its IRFs provided inaccurate information to Medicare to maintain their status as an IRF and to earn a higher rate of reimbursement, and that some admissions to its IRFs were not medically necessary.

Recoveries in Whistleblower Suits

Of the $3 billion in settlements and judgments reported by the government in fiscal year 2019, over $2.1 billion arose from lawsuits filed under the qui tam provisions of the False Claims Act.  During the same period, the government paid out $265 million to the individuals who exposed fraud and false claims by filing these actions.

The number of lawsuits filed under the qui tam provisions of the Act has grown significantly since 1986, with 633 qui tam suits filed this past year – an average of more than 12 new cases every week.

“Whistleblowers continue to play a critical role identifying new and evolving fraud schemes that might otherwise remain undetected,” said Assistant Attorney General Hunt.  “Taxpayers have benefitted greatly from these individuals who are often required to make substantial sacrifices to bring these schemes to light.”

In 1986, Senator Charles Grassley and Representative Howard Berman led the successful efforts in Congress to amend the False Claims Act to, among other things, encourage whistleblowers to come forward with allegations of fraud.  In 2009 and 2010, further improvements were made to the False Claims Act and its whistleblower provisions.  Congress also included in the False Claims Act authority for the government to dismiss cases that do not advance the goal of fraud prevention, and during the past year the government made increasing use of this tool to help prioritize and protect the expenditure of government resources.

Finally, Assistant Attorney General Hunt expressed appreciation for the many dedicated public servants throughout the department’s Civil Division and the U.S. Attorneys’ Offices, as well as the agency Offices of Inspector General and the many other federal and state agencies that contributed to the department’s False Claims Act recoveries this past fiscal year.

“The accomplishments announced today reflect the extraordinary efforts of the men and women throughout the government committed to protecting the federal fisc and the integrity of the government’s programs,” said Assistant Attorney General Hunt.  “Having served many years in the Civil Division, I have witnessed the passion and dedication of the talented employees who have committed their careers to serving the American people and defending the interests of our great nation.”

 

Whistleblowerlaw.com & Mike Bothwell Lawfirm does not claim or imply ownership of this article. Full article link here: https://www.justice.gov/opa/pr/justice-department-recovers-over-3-billion-false-claims-act-cases-fiscal-year-2019

Judge v. Jury: $350 Million Medicare Award at Stake in Atlanta

Posted on by Mike Bothwell

Whistleblower attorney Mike Bothwell was a tops quoted source in the article below:

Full Article Link

The invalidation of a Florida jury’s nearly $350 million Medicare fraud verdict wasn’t only frustrating for whistleblower Angela Ruckh and her attorneys. It may have also seriously hurt plaintiffs’ ability to fight alleged fraud in the southeast U.S.

Ruckh Nov. 20 will urge the Eleventh Circuit in Atlanta to reinstate the award, which a district judge tossed after concluding she failed to satisfy U.S. Supreme Court standards for demonstrating materiality in a False Claims Act case. The federal government is supporting her appeal.

The judge misconstrued ample evidence of materiality, Ruckh says. Rejecting her appeal could do great harm to the ability of FCA whistleblowers and the federal government to raise a valid case, whistleblower attorneys say.

The decision by Judge Steven Merryday of the U.S. District Court for the Middle District of Florida “takes the most conservative and defense-oriented” view of Supreme Court standards for raising false claims cases, said Mike Bothwell of Bothwell Law Group P.C. in Roswell, Ga.

Prosecution of FCA cases will become “infinitely harder” if the U.S. Court of Appeals for the Eleventh Circuit affirms, he said.

In 2018, the U.S. recovered $2.8 billion from FCA cases, $2.5 billion of which came from cases involving the healthcare industry.

Ruckh convinced a jury in February 2017 that Medicare wouldn’t have paid Consulate Health Care, a nursing home services provider, if Medicare knew the truth about the Consulate’s practice of “ramping,” which misleads Medicare as to the necessity of services, and “upcoding” for services which led to overbilling.

Merryday tossed the verdict nine months later, ruling that the alleged misconduct wasn’t material to government payment decisions under the Supreme Court’s 2016 ruling in Universal Health Servs., Inc. v. United States ex rel. Escobar.

That is, Ruckh didn’t offer meaningful proof that Medicare’s knowledge of the disputed practices was consequential to payment decisions, Merryday concluded.

Medicare knew about the allegations and continued to pay anyway, he said.

“We don’t want every administrative failure by a contractor to be an FCA case, but when you have facts like these, where folks are receiving unnecessary services, how is that not leading to inflated, unnecessary claims,” said Pamela Coyle Brecht of Pietragallo Gordon Alfano Bosick & Raspanti LLP in Philadelphia.

“Medicare has a pay and chase system. The U.S. doesn’t examine every claim in real time. It is entitled to rely on the truthfulness of a claim submitted by a contractor, and then attempt to recoup fraudulent payments at a later date,” she said.

“It undermines the entire purpose of the FCA to say that payments to a contractor, that turn out to be fraudulent, require dismissal of cases for lack of materiality,” she said.

Consulate says materiality was indeed lacking because Ruckh offered no evidence that Medicare had overlooked any alleged deficiencies in audits before deciding to continue paying.

“If the government thought the alleged violations were material, why would they keep paying the claims? There are a host of cases now where the government ‘knowledge’ defense has been successfully raised,” said Aaron Danzig of Arnall Golden Gregory LLP in Atlanta.

‘Wild, Wild West’

The verdict should be reinstated because Ruckh introduced more than enough evidence to show that higher therapy levels lead to increased payments, and using false therapy codes has a natural tendency to influence payments, her brief says.

The U.S. Justice Department supports Ruckh, stating in a brief that materiality for her claims is “obvious,” and that “it is difficult to see how any reasonable jury could have concluded otherwise.”

Brecht said it’s “currently the wild, wild west with regard to the materiality defense, and I would hope that the Supreme Court would shed more light on this issue.”

“There are many reasons why the government would continue to pay a contractor that don’t have to do with excusing fraud,” Brecht said.

More litigation will result if the Eleventh Circuit affirms, “because whistleblowers will be forced to get more aggressive in discovery,” Brecht said. “They will be forced to say I need to know more about what the government knew about defendants’ practices and when it knew it.”

Defendants naturally will be pleased if Merryday’s ruling is affirmed.

But in the event the Eleventh Circuit sides with Ruckh, the silver lining for defendants could come in the form of another materiality case working its way back to the high court’s door.

Several defendants since Escobar have unsuccessfully petitioned the Supreme Court to adopt a clear “no harm, no foul” rule with regard to continued payments. There can’t be any fraud if the government knows but pays, the petitions have argued.

Merryday’s opinion cited one of those continued payment cases, United States ex rel. Harman v. Trinity Indus. Inc.

The Fifth Circuit ruled in that case that a $663 million jury verdict couldn’t stand because the Federal Highway Administration always paid for and approved of a highway guardrail contractor’s product despite knowledge of alleged wrongdoing.

To contact the reporter on this story: Daniel Seiden in Washington at dseiden@bloomberglaw.com

To contact the editors responsible for this story: Jo-el J. Meyer at jmeyer@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com

Whistleblowerlaw.com & Mike Bothwell Lawfirm does not claim or imply ownership of this article. Full article link here: https://news.bloomberglaw.com/federal-contracting/judge-v-jury-350-million-medicare-award-at-stake-in-atlanta

Trump & our thoughts on why we should protect Whistleblowers

Posted on by Mike Bothwell

USA Today recently published the following article “Trump’s allies want to ID the whistleblower, who may learn the price of speaking out“.

Here are our my thoughts.

Shortly after signing the Declaration of Independence, the Continental Congress passed a resolution for whistleblower protection.  Some sailor and marines blew the whistle on a commander of the navy during the war with Great Britain.  They reported the problems to the Continental Congress and were prosecuted for it.  The Continental Congress not only passed the resolution supporting blowing the whistle on such abuse (calling it a “duty”), but it passed a subsequent resolution to pay the costs of their defense.

Another major whistleblower legislation was passed in 1863 during the Civil War.  The False Claims Act also known as the Lincoln Law allowed private citizens to sue on behalf of the government to recover for false claims and fraud against the government.  This law was significantly revised in 1985 and has become the government’s number one tool for prosecuting fraud against the United States.  Whistleblowers recover from 15% to 30% of what the government receives and cases under the False Claims Act have brought in $60 billion since it was revamped in 1985.

Various state and federal agencies have passed whistleblower protections and evinced a consensus that whistleblowers play a crucial role in ferreting out fraud, waste, and abuse in our system.  In 1985, when Congress was considering one of the oldest and most robust whistleblower statutes (the False Claims Act), it noted that the act was underutilized in large part because of fear of retaliation.  That is perhaps the number one deterrent to people shinning a light on corruption and illicit dealings.  From July 30, 1778 to the present, America has agreed to protect people who are willing to bring bad things to light.

We absolutely need to continue this protection. I’m fighting for this daily.

Tips from Pharmaceutical Whistleblower Lawyers on How to Report Fraud

Posted on by Mike Bothwell

What do you need to know if you’re a whistleblower in a pharmaceutical case? Get the details you need about pharmaceutical whistleblower lawyers.

pharmaceutical whistleblower lawyersPharmaceutical whistleblower lawyers work on cases involving drug fraud against the government. These cases fall under the qui tam provision of the False Claims Act (FCA). This law allows a person to sue companies on behalf of the government. The exact process depends on the specific type of drug fraud. The following categories cover the most common types of fraud:

  • Off label drug promotion
  • Kickbacks
  • Medicaid rebates
  • Adulterated drugs

Off Label Drug Promotion

Off label drug promotion is the most common type of drug fraud. It occurs when a company receives FDA approval to use a drug for one use but promotes it for another use. Assume for this example that the FDA approves drug XYZ for the treatment of diabetes. The drug company then contacts doctors to promote its benefits for treating depression. It may even say the drug has FDA approval without saying that it’s only approved for treating diabetes.

Your evidence needs to show the company intentionally promoted off label drug use for this case to qualify as fraud. The key requirement is specific evidence showing this intent. This evidence includes documents of training sessions that explain how to promote drugs for off label uses. Another example of strong evidence for drug fraud would be letters to doctors with marketing information on off label uses.

Recognizing Kickback Schemes

Kickbacks are the second most common form of drug fraud. This type of fraud occurs when a drug company pays a healthcare worker to promote their drugs. These workers may include doctors, nurses, hospitals, pharmacies, and nursing homes.

It’s generally illegal for drug companies to offer financial incentives to their customers. These activities are rarely as obvious as handing over a bag full of cash. For example, drug makers can provide healthcare workers with marketing materials. These materials could include inexpensive items such as pens and coffee mugs. Such items don’t constitute drug fraud by themselves. However, companies often cross the line by offering more costly items.

Another example is when a drug company hires a doctor to provide consulting services. It can be difficult to show that this case is a kickback since the doctor is providing a service.

Drug companies go to extreme lengths to hide kickback schemes. You could be eligible for a reward if you attended a discussion of these schemes. The minutes from such a meeting can be useful for showing kickbacks. This is especially true if the speakers at the meeting were executives. Inside information on how these schemes are taking place can also be strong evidence of kickbacks.

Medicaid Rebate Fraud

Medicaid rebate fraud involves drug companies underpaying Medicaid rebates to the government. Drug companies must belong to the Medicaid Rebate program to provide drugs for Medicaid patients. This program prohibits companies from charging Medicaid more than they charge other customers. Drug companies must submit a report to Medicaid every quarter showing the highest price they charged for each drug. They must then pay Medicaid a rebate if Medicaid paid a healthcare provider more than the company charged other customers for that drug.

The specific schemes for committing Medicaid rebate fraud are highly varied. You might be eligible for a reward if someone at a drug company lied about drug prices. You generally need to show that someone lied about a drug’s average manufacturer price (AMP) or average wholesale price (AWP). Drug companies use these figures to calculate the rebate they owe to Medicaid.

Adulterated Drugs

The use of adulterated drugs is a less common form of drug fraud. However, its frequency is increasing as process controls for drug manufacturing becomes stricter. The FDA must approve a drug’s manufacturing processes, including quality control procedures. A drug company may commit drug fraud when it materially deviates from its approved processes.

The key criterion for this type of fraud is whether these changes have the potential to affect the drug. Small errors aren’t enough to file a lawsuit by themselves. However, a large number of such errors may justify a lawsuit. Your evidence must show these errors call the drug’s performance or safety into question.

Assume for this example that a company tells the FDA that it will use a sterile lab for a particular process. The company then decides not to use a sterile lab because it’s too expensive. The FDA could consider the drugs made without the sterile lab to be non-conforming. This scenario could thus qualify as drug fraud.

Pharmaceutical fraud is complex and often hard to prove. Find out more about how pharmaceutical whistleblower lawyers can help by contacting the Bothwell Law Group.

Should You Hire a Lawyer for Whistleblowers Before You Report Fraud?

Posted on by Mike Bothwell

Learn more about how to hire a lawyer for whistleblowers if you need to report fraud.

Hire a Lawyer for WhistleblowersYou may need to hire a lawyer for whistleblowers if you’ve decided to file suit on behalf of the government. The False Claims Act (FCA) covers the majority of these cases, although other such laws exist. These cases generally involve filing false claims for payment with the federal government. Whistleblowers still incur risks, although they have some protection against retaliation. An attorney can also give your lawsuit a better chance of stopping a corrupt business practice.

Your search for the right attorney doesn’t have to be arduous, but you do need to make it with care. Hiring the right attorney is important in whistleblower cases because they’re extraordinarily complex. The following discussion shows what you should look for in a whistleblower attorney.

Becoming a Whistleblower

A whistleblower can be anyone who comes forward with information on wrongdoing. However, it usually refers to someone who reports fraud against the government. Whistleblower cases involving federal healthcare programs and defense contracting are the most common. They also include fraud cases in the financial industry, especially IRS tax fraud. Whistleblowers perform a public service by uncovering these activities. They can provide far-reaching benefits for the government and the general public.

Becoming a whistleblower requires original, provable evidence related to the false claims. Information on the internet isn’t original unless you’re the source. Rumor and innuendo aren’t provable information. You need to have records that provide hard facts such as names, places, dates, and situations.

Whistleblowers can receive part of the damages the government recovers under the FCA. The amount varies from 15 to 30 percent of the total recovery. The percentage is less if the government joins the case. The value of the information from the whistleblower also helps determine the amount of the award. The relevance and amount of information are the most important factors in determining its value. Recoveries in a whistleblower case are typically quite large. The main reason for this is the recovery amount is three times the value of the damages.

Furthermore, each false claim can also incur a civil penalty of up to $11,000. Some of these suits include hundreds of individual claims. That means the civil penalties alone can be significant in a whistleblower case. Whistleblowers can also recover legal expenses from the defendant if the suit succeeds.

Referral Services

Ensure you work directly with a law firm when searching for a whistleblower attorney. Many of the web sites for whistleblower cases are actually from referral services. These services collect information about your case and pass it along to a law firm in exchange for a fee.

The main problem with a referral service is it will only pass your information to one of their clients. This may mean that lawyer isn’t the best choice for your case. A website that doesn’t list any lawyers is a major clue that you’re dealing with a referral service. Another sign is a website that doesn’t list a physical address.

Experience Relative to Your Case

Many types of whistleblower cases exist. Ensure you get an attorney with experience in your particular type of case. Assume for example that you’re filing a lawsuit involving Medicare fraud. You don’t want an attorney who has only tried cases involving defense contractor fraud. If you’re filing a suit on securities fraud, you need an attorney experienced in SEC claims.

Ample Resources

The complexity of whistleblower cases also means they require resources. A single competent attorney can handle many types of legal matters. However, a whistleblower case routinely requires a team of attorneys. Only the first whistleblower to file gets to bring the case, so it usually takes many lawyers to file a case first. Attorneys in whistleblower cases often need to hire consultants to bolster the case. These attorneys also need to have good contacts with the U.S. Attorney’s office.

The Importance of Reputation as You Hire a Lawyer for Whistleblowers

A lawyer’s reputation is always a critical factor to consider. However, it’s particularly important with whistleblower cases. The length of these cases means you’ll be working closely with your attorney for an extended period. An attorney whose judgment you trust increases the probability of a favorable outcome.

Understanding Associated Fees

Ensure you understand how a law firm does business before you retain its services. Whistleblower attorneys typically work on a contingency basis. This means you pay their fees from any money you receive from the case. You should look elsewhere if an attorney in a whistleblower case wants to bill you upfront or by the hour.

For more information about finding the right lawyer for whistleblowers, contact the Bothwell Law Group for the experience and knowledge you need for your case.