"By bringing allegations of fraud to light, whistleblowers play an important role in protecting the integrity of our healthcare system," says the U.S. Attorney for the Western District of Pennsylvania.
As drug prices rise in the U.S., some have expressed concerns that charitable payment of drug copays could be contributing to price inflation. This is because, although most patient assistance groups of this type are charities, pharmaceutical companies routinely donate to the groups.
When someone blows the whistle on fraud, waste or abuse in federal programs, they can often receive as a reward a substantial portion of any money recovered on behalf of the government. This is called the qui tam provision of the federal False Claims Act. In a recent pair of consolidated False Claims Act cases, the whistleblower will receive a reward of $5,411,521.
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:
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.
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.
Pharmaceutical manufacturer Insys Therapeutics, Inc., has tentatively agreed to settle allegations by the U.S. Justice Department that it paid kickbacks to doctors in order to get them to prescribe its drug Subsys. The drug is an under-the-tongue spray containing the opioid fentanyl, which is some 100 times stronger than morphine. Subsys was intended to manage pain in cancer patients.
It was recently reported, that, after four different employees blew the whistle on false and inflated claims to Medicare and Medicaid, two healthcare concerns have admitted responsibility and agreed to pay a $14.7 million settlement. One was Health Quest Systems, Inc., a New York-based family of hospitals and healthcare providers delivering medical, surgical and home healthcare services. The other was Putnam Health Center (PHC), a Health Quest subsidiary based in Carmel Hamlet, New York.
"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.
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.