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New York Whistleblower And Commercial Litigation Blog

$1 billion+ False Claims Act case vs. UnitedHealth moves forward

Last year, the Justice Department launched two lawsuits against UnitedHealth, which it accuses of defrauding Medicare through its Medicare Advantage plans. One of those suits was dismissed in October. Now, a federal judge has ruled that the other case can move forward with certain claims dismissed.

According to the DOJ, UnitedHealth benefited by submitting invalid diagnostic data about Medicare Advantage plan participants. The allegedly untruthful, inaccurate information allowed UnitedHealth to get higher risk-adjustment payments from Medicare. Once the truth was discovered, between 2011 and 2014, according to the lawsuit, the insurer failed to repay Medicare by more than $1.14 billion.

U.S. Attorney settles False Claims Act case with hospice provider

A private, for-profit hospice provider and its CEO have agreed to settle False Claims Act allegations brought by the federal government. The company and its head have agreed to pay $1,240,000 to resolve claims that they fraudulently billed Medicare and Medicaid.

According to the U.S. Attorney for the Western District of Pennsylvania, Horizons Hospice, LLC, submitted claims to Medicare and Medicaid for patients who didn't qualify for end-of-life hospice care. The federal healthcare programs typically do not pay for hospice care unless patients have terminal illnesses with a life expectancy prognosis of six months or less, but Horizon and its CEO submitted fraudulent claims. In some cases, the U.S. Attorney also contended that the defendants falsified the medical records that supported the claims so they would seem legitimate. These activities violated the False Claims Act.

Whistleblower suit costs Lockheed Martin $4.4 million

A former engineer for Lockheed Martin sued the corporation on behalf of the U.S. government under the False Claims Act. The whistleblower suit alleged that Lockheed knowingly sold defective surveillance and communications systems to the U.S. Coast Guard.

Imaging group to pay $16.2 million in False Claims Act judgment

Orthopaedic and Neuro Imaging LLC (ONI) and its owner were accused of submitting some $6,125,947.13 in false claims to Medicare. A default judgment has been issued against them. Generally, a default judgment is entered when defendants fail to defend themselves in court.

The case was initiated by a whistleblower. The former ONI employee brought forward the claim and the government intervened in the lawsuit. In False Claims Act cases, whistleblowers are entitled to a percentage of the total recovery as a reward. In this case, the former employee will receive 18 percent of the judgment, or approximately $1,102,670.

Whistleblower to receive $246,500+ in unnecessary opioids case

A former office manager for a Tennessee pain clinic filed a qui tam lawsuit under the federal False Claims Act accusing her former employer of falsely billing Medicare and TennCare for unnecessary painkillers, upcoding claims, and billing Medicare for improper nurse practitioner services. The federal government and the State of Tennessee brought suit and have just settled with a chiropractor, a nurse practitioner and several now-closed pain clinics. As a result of the whistleblower's actions, she will receive more than $246,500 -- a share in the total settlements.

According to the Justice Department, a Lenior City chiropractor, his four pain clinics, and a Cookeville nurse practitioner were all involved in the alleged scheme. The chiropractor managed four pain clinics in Tennessee: the Cookeville Center for Pain Management, Spinal Pain Solutions in Harriman, Preferred Pain Center of Grundy County, and McMinnville Pain Relief Center.

Whistleblower to receive $225,000 in False Claims Act reward

San Diego-based Scripps Health, a health care system, has agreed to settle False Claims Act allegations for $1.5 million. According to the Department of Justice, Scripps Health violated the Act by billing Medicare and TRICARE for physical therapy services performed by un-enrolled therapists. A former employee blew the whistle on the unlawful billings against the two federal health programs, and she will receive a $225,000 reward in return for her service.

Medicare and TRICARE, the health insurance program provided to uniformed military service members and their dependents, only allow healthcare providers who are enrolled in the network to bill for services. Other services can be provided, but those services must be billed as "incident to" services provided by an enrolled provider. When an un-enrolled service provider wishes to bill as incident to an enrolled one, he or she must be directly supervised by the enrolled provider.

Former Wells Fargo insurance broker sued on non-compete agreement

Non-compete agreements serve an important purpose: To protect a company's interests after an employee departs. An issue involving non-compete agreements recently entered the news in New York.

USI Insurance Services, L.L.C., is suing a former broker at Wells Fargo Insurance Services USA. Chad Elgas is accused of being in violation of his non-compete agreement. 

DOJ: Production incentives led to false dental claims

The Department of Justice and a large number of states collaborated on a settlement with dental management company Benevis LLC and over 130 Kool Smiles dental clinics that Benevis provided services for. The clinics and Benevis have agreed to settle allegations of false claims made against state Medicaid programs. The companies allegedly submitted claims for medically unnecessary dental procedures, and procedures that were not performed, on Medicaid-insured children.

The settlement resolves an investigation that was initiated under the False Claims Act's whistleblower provision. Three former Kool Smiles employees blew the whistle against a regime of aggressive production goals which contributed to false claims being submitted. The settlement totals $23.9 million and the whistleblowers will share over $2.4 million in rewards.

Pharmaceutical company to pay $210 million in FCA kickbacks case

Medicare beneficiaries are often required to make a copayment, use coinsurance or pay a deductible when buying prescription drugs. These are collectively referred to as "copays." Congress mandates certain copays, which rise with the expense of the drug, in order to introduce market forces into the purchase of prescription medications. Copays serve both to sway patient choices and to limit what pharmaceutical companies can charge for their drugs.

For these market forces to work, pharmaceutical companies are barred from offering inducements to patients for buying their products. The Anti-Kickback Statute prohibits drug makers from offering or paying any direct or indirect remuneration for that purpose -- and that includes covering patients' copays.

False Claims Act recovers $3.7 billion in the 2017 fiscal year

Health care fraud and false claims pose a serious financial threat to the federal government and tax payers alike. The Department of Justice (DOJ) works in conjunction with ordinary citizens and public servants to pursue justice against those committing the fraud.

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