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New York Whistleblower And Commercial Litigation Blog

DaVita Medical to pay $270 million in False Claims Act case

Medicare Advantage plans are owned and operated by private organizations called Medicare Advantage Organizations (MAOs). Medicare beneficiaries can enroll in and obtain healthcare through these plans. Unlike in traditional Medicare, MAOs are not paid based on services rendered but instead receive a fixed monthly amount for each beneficiary's care. Since some patients require more care than average, payments from Medicare to MAOs are "risk adjusted" to reflect the beneficiary's health status. In other words, MAOs receive higher payments for patients whose conditions require more care.

HealthCare Partners Holdings LLC, doing business as DaVita Medical Holdings LLC (DaVita), operated what is called a medical services organization (MSO) which contracted with MAOs to provide the healthcare for which the MAOs billed Medicare. This put it in the position not only of providing the healthcare services but also of providing the diagnosis codes that MAOs used to obtain risk-adjusted payments. In return, DaVita received a share of the Medicare payments received by the MAOs.

What you need to know about non-compete agreements in New York

Non-compete agreements protect businesses from unfair competition when an employee leaves the company. The agreements typically include language that prevents sharing trade secrets or using your unique skills to help the competition for a specific length of time.

Non-compete agreements were initially only used for highly skilled employees, but in recent years, many companies have asked even low-level workers to sign non-compete agreements. This can limit workers’ ability to pursue better pay and better jobs. In New York, former Attorney General Eric Schneiderman tried to crack down on overuse of non-compete agreements and pursued charges against Jimmy John’s, Law360 and EMSI.

Whistleblowers get at least $27.4 mln in False Claims Act cases

The federal government intervened in eight False Claims Act lawsuits and brought criminal charges against Health Management Associates, LLC (HMA), a hospital chain that has since been sold. According to the Justice Department, HMA engaged in a scheme to defraud the U.S. The allegations include:

  • Unlawfully pressuring doctors to increase emergency department patient admissions even when not medically necessary
  • Billing federal healthcare programs for higher-paying inpatient care when outpatient or observation care were actually performed
  • Formally instituting an aggressive plan to unlawfully increase emergency department inpatient admissions at all its hospitals, including subsidiaries, solely to increase revenue
  • Coercing doctors and medical directors, by threat of termination, to meet strict inpatient emergency department admission benchmarks without regard to whether the patients actually needed inpatient care
  • Billing federal healthcare programs for referred services when the referring physicians were paid for those referrals with items such as free office rent
  • Billing federal healthcare programs for services referred by doctors with whom the company and its facilities had improper financial relationships. According to the Justice Department, these relationships were structured to disguise payments meant to induce referrals

Lockheed Martin employee reaches False Claims Act settlement

Richard O. was an employee of Lockheed Martin Corporation working for Mission Support Alliance (MSA) in August 2009. Lockheed Martin Services, Inc. (LMSI), a Lockheed Martin subsidiary, and MSA were hired by the Department of Energy to perform environmental cleanup of the Hanford Nuclear Reservation in Washington. Through a subsidiary, Lockheed Martin was one of the owners of MSA, as well.

It was the interconnected nature of the businesses that was part of the problem. According to the Justice Department, since LSMI was an affiliate of MSA, it was not entitled to any profit on the work it performed for MSA on behalf of the Energy Department.

Whistleblowing - How It Works, Why We Need It

Who are the most popular fraud targets? The U.S. and state governments. Why? Governments cannot possibly police each of their millions of transactions. But beware you Medicare false claimers, overcharging defense contractors, sales tax skimmers, and bill-padding construction contractors. An explosively growing army of honest employees await to blow the whistle on those illegally slicing your tax dollars into their own pockets. Host Bart Jackson invites noted qui tam (whistleblowing) super-attorney Andrea Fischer to reveal how upright citizens with an aggressive judiciary are bringing cheating firms to justice. Founder of the Fischer Legal Group, Andrea cites specific cases, describes the whistleblowing process and the retaliation protections. Tune in and learn about those valued individuals who refuse to tolerate corruption in our democracy. 

Another case of Medicare kickbacks brings $6.1-million settlement

It was an interesting scheme. According to allegations by the Department of Justice, Reliant Rehabilitation Holdings, Inc., wanted to induce or reward its client nursing homes for referring patients to Reliant for rehabilitation therapy. So, it sent over nurse practitioners employed by Reliant to work for those nursing homes for free or below market value.

The free and low-cost services those nurse practitioners provided to the nursing homes constituted unlawful kickbacks, according to the Justice Department. Moreover, Reliant and doctors working at the nursing facilities entered into improper contracts in which the doctors were paid above market fair market value when they supervised or collaborated with Reliant nurse practitioners. This was done in exchange for doctors' referrals of Reliant therapy services. Those practices tainted Reliant's Medicare claims and violated the False Claims Act.

SEC awards two whistleblowers a combined $54 million

It has been reported that the Securities and Exchange Commission awarded two major whistleblowing payouts earlier this month. The agency granted one whistleblower $39 million. Another informant received $15 million. The SEC awarded these two for information leading to the discovery of a major violation of SEC rules.

The $39 million award was the second largest since the program was implemented under the Dodd-Frank Act in 2010. While both claimants requested higher amounts, their requests were denied.

Whistleblower to get $2,345,670 in medical kickbacks case

It has been reported that Post Acute Medical, LLC, and certain affiliates ("PAM") have agreed to pay $13,168,000 to settle claims by the Justice Department, Texas and Louisiana that they violated the False Claims Act and parallel state statutes. The nationwide operator of rehabilitation and long-term care hospitals was accused of knowingly submitting claims to Medicare and Medicaid that were the result of violations of the Physician Self-Referral Law and the Anti-Kickback Statute.

PAM was founded in 2006 and immediately entered into numerous physician services contracts, ostensibly in order to retain doctors in administrative or medical roles at its facilities. According to the Justice Department, those contracts were actually created in order to induce the doctors to refer patients to PAM facilities. If true, this would violate the Physician Self-Referral Law.

Whistleblower to receive $4.9 million in medical kickbacks case

A Texas doctor will receive $4.9 million as a reward for blowing the whistle on seven ambulance industry defendants who allegedly paid kickbacks to municipal entities in several states in exchange for lucrative ambulance business. The alleged kickbacks violated the federal Anti-Kickback Statute, which prohibits offering, paying, soliciting or receiving remuneration in order to induce referrals. The scheme allegedly resulted in false claims being submitted to Medicare and Medicaid, which violated the False Claims Act.

The Department of Justice achieved a settlement with the ambulance industry defendants of over $21 million. Under the False Claims Act, whistleblowers are entitled to a percentage of the total recovery made by the government in cases they initiate.

Lance Armstrong's ex-manager to pay $1.2 mln in False Claims case

When Lance Armstrong used banned substances to win the Tour de France, he violated the False Claims Act, which imposes legal liability on those who commit fraud against federal programs. The reason his actions violated the False Claims Act is that he had received a $32.3 million sponsorship from the U.S. Postal Service during six of his victorious tours.

As we discussed on this blog at the time, Armstrong settled the False Claims Act case for $5 million, the estimated damage suffered by the USPS. A former teammate who had blown the whistle on the fraud received $1.1 million as a reward for doing so.

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