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New York Whistleblower And Commercial Litigation Blog

Mercy Health to pay $14.25 million over improper doctor payments

Cincinnati-based Mercy Health, a nonprofit healthcare organization operating in Ohio and Kentucky has agreed to pay the United States $14,250,000 to settle False Claims Act allegations. According to the Justice Department, Mercy Health made improper payments to physicians.

Federal law limits the financial relationships that hospitals and certain healthcare organizations can have with physicians who refer patients to their facilities. Doctors are to be paid no more than the fair market rate for their services, and any incentives offered must be based solely on the patients' clinical interests. Additional payments or incentives may be construed as illegal kickbacks, which result in higher overall healthcare costs and, often enough, false claims against federal healthcare programs.

Whistleblower says Insys paid kickbacks for opioid prescriptions

The Justice Department and six U.S. states have joined a whistleblower's lawsuit against Insys Therapeutics, Inc. In the lawsuit, the drug maker is accused of trying to make more profit on Subsys, a spray form of the opioid fentanyl, by paying kickbacks to induce doctors to prescribe the drug. It is also accused of knowingly having insurers and federal healthcare programs to pay for Subsys when it was not medically necessary.

Subsys is applied under the tongue in cancer patients who are already receiving but are tolerant to round-the-clock opioid therapy. The whistleblower who originally filed the lawsuit is a former Insys sales representative who claims that physicians improperly prescribed Subsys for things like back pain, which is not an approved use of the drug.

Former Bureau of Prisons employee settles Anti-Kickback Law case

"Improper financial arrangements between government officials and private contractors corrupt taxpayer-funded contracts," says the acting assistant attorney general of the Justice Department's Civil Division.

A former financial administrator for the U.S. Bureau of Prisons (BOP) has just agreed to settle allegations that he violated the federal Anti-Kickback Act. The Act prohibits offering or exchanging anything of value in an effort to induce or reward referrals of federal healthcare contracts or program business. The man, who worked in Texas, has agreed to pay $50,000 to settle the allegations. In 2014, he pled guilty to a felony charge of failing to disclose payments he had received, which was his obligation under federal employment rules.

DOJ awards $1,645,600 in case of false billings for oxygen

Respiratory equipment supplier Rotech Healthcare, Inc., has agreed to settle False Claims Act Allegations for $9.68 million. Moreover, as part of the settlement agreement, the company admits that it knowingly billed Medicare for portable oxygen tanks (contents) that patients didn't need or use -- and regardless of whether the tanks were actually delivered.

A whistleblower originally initiated the suit under the False Claims Act, which allows private citizens to sue on behalf of the government when they have evidence of fraud, waste or abuse in government contracts. The whistleblower, a former employee in the company's billing department, will receive a $1,645,600-share in the recovery.

When a noncompete waiver goes too far

One basic principle of the American free market system is that workers have the opportunity for advancement. If that opportunity does not come at your current job, a competitor might see your experience and hire you at a better salary. It is a cornerstone of the economy and something that most people take for granted.

A noncompete clause in an employment contract controls where an employee might work next. Simply put, when an employee signs, he or she agrees not to share trade secrets with the competition. It is done to protect the business and the intellectual property it owns. A recent trend in noncompetes does not just consider trade secrets, but work experience in a much broader sense.

Whistleblower awarded $3.3 million in major False Claims Act case

When Medicare patients could reasonably be treated on an outpatient basis but are admitted for inpatient care, the result is more expense for the government with no reason to expect a better outcome. Furthermore, patient admitting decisions should always be made for medical reasons, not to drive up reimbursements.

That is why the Justice Department's Civil Division recently brought a False Claims Act case against Banner Health. The company owns and operates some 28 acute-care hospitals in a number of states, but the allegedly false claims against Medicare occurred at 12 facilities in Arizona and Colorado Between 2007 and 2016.

Whistleblower to receive $1.1 million in Lance Armstrong case

In 2013, cyclist Lance Armstrong admitted to using banned substances to win his record seven Tour de France titles between 1999 and 2005. In 2012, an investigation by the United States Anti-Doping Agency found that Armstrong and a number of his teammates had used the substances. Unfortunately, Armstrong was representing the U.S. Postal Service during six of his victorious tours, and that led a teammate to blow the whistle under the federal False Claims Act, claiming that Armstrong's doping was a fraud on the government.

Armstrong has just agreed to settle the fraud allegations for $5 million. The extent of the harm suffered by the Postal Service was a looming issue in the case. Armstrong and his team received $32.3 million in sponsorship money from the USPS, and the agency had once said the sponsorship had been a marketing boon. Armstrong's attorneys had planned to argue that the USPS suffered no harm from the doping.

SEC issues $2.2 mln whistleblower award under 'safe harbor' rule

Under the Securities and Exchange Commission's "safe harbor" rule, securities law whistleblowers can receive awards even if they submit their information to another agency, as long as they submit it to the SEC within 120 days. When they do so, the SEC will treat the information as if it had been submitted properly in the first place.

In the first-ever award under the rule, the SEC has just issued an award of $2.2 million to a whistleblower who originally made a report to another federal agency. That agency referred the matter to the SEC -- and the whistleblower provided the same information to the SEC within the 120-day window. The information led to an investigation, to which the whistleblower provided "substantial cooperation" and which led to an enforcement action.

Takata whistleblowers to get $1.7 million from bankruptcy fund

The Motor Vehicle Safety Whistleblower Act may not be completely up to speed, but three former Takata employees will still get their awards. They blew the whistle on the auto parts manufacturer in the largest recall in automotive history. The recall involves faulty air bag inflators installed by 19 automakers into millions of vehicles.

The Motor Vehicle Safety Whistleblower Act was passed in 2015. It offers an award to auto industry employees who blow the whistle on vehicle safety violations. The award these whistleblowers can obtain is between 10 and 30 percent of any monetary sanction over $1 million that the government obtains based on their information.

False healthcare claims could be worth $4 billion in damages

When we think of fraud we often think of fraud and enforcement, we often think of federal laws and agencies. However, a new health care fraud whistleblower case that is making headlines in New York City is being pursued under state law. What does the case entail and how is state law working in this case?

The details of the case

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