Medicaid or Medicare Fraud

A settlement has been reached in a whistleblower class action lawsuit brought against Harmony Care Hospice Inc (Harmony) and Harmony owner and chief executive officer Daniel J. Burton. They are accused of submitting false claims to Medicare for patients under care at its hospice facilities. 

Under today’s agreement, Burton is individually liable for $200,000 of the settlement amount. The whistleblowers will receive $244,529.87 as their share of the government’s recovery.

The initial lawsuit was filed by whistleblowers in May 2010.  Medicare beneficiaries are entitled to hospice care if they have a terminal prognosis of six months or less. The United States alleged that Harmony and Burton knowingly submitted or caused to be submitted false claims for patients who did not have such a prognosis and thus were not eligible for hospice care.

A settlement has been reached in a whistleblower class action lawsuit brought against Morton Plant Mease Health Care Inc and its affiliated hospitals (Morton Plant).  They are accused of submitting false claims for services rendered to Medicare patients.

The whistleblower will receive over a $1.8 million share of the government’s recovery.

The initial suit filed by the whistleblower was filed in August 2008.  The government alleged that, between July 1, 2006 and July 31, 2008, Morton Plant improperly billed for certain interventional cardiac and vascular procedures as inpatient care when those services should have been billed as less costly outpatient care or as observational status.

A settlement has been reached in a whistleblower class action lawsuit brought against Healthpoint Ltd and DFB Pharmaceuticals.  They are accused of causing false claims to be submitted to Medicare and Medicaid for an unapproved drug, Xenaderm, which was ineligible for reimbursement by those programs.

Under the terms of the agreement, Healthpoint and DFB will pay $28 million, plus another $20 million if there is a change in ownership of Healthpoint or DFB over the next three years. Currently there is not an agreement as to the whistleblower's share of the government's recovery.

A whistleblower case was filed in 2002 against Healthpoint Ltd.  In January 2011, the United States intervened in, and later filed, a civil False Claims Act case against Healthpoint, alleging that it launched Xenaderm, a prescription skin ointment for the treatment of nursing home patients’ bed sores, without any FDA approval. The complaint alleged that Healthpoint’s business strategy was to market new prescription drug products modeled after drug products that were on the market before October 1962, in order to avoid the time, effort, and expense of obtaining FDA approval. The complaint further alleged that at no time prior to its introduction of Xenaderm into the market did Healthpoint complete any double-blind placebo-controlled clinical studies that established the safety and effectiveness of Xenaderm. In fact, one of Healthpoint’s own clinical researchers expressly conceded in an internal e-mail that the safety and efficacy data for Xenaderm was “cruelly insufficient” to meet FDA standards. Notwithstanding the lack of FDA approval, the government alleges, Healthpoint actively promoted Xenaderm as a prescription drug that, unlike non-prescription skin ointments such as Vaseline, was “Medicaid reimbursed” and thus cost nursing homes nothing to administer to Medicaid patients.

While products containing Xenaderm’s principal active ingredient, trypsin, were on the market prior to 1962, the FDA had determined in the 1970s that trypsin was less-than-effective for its intended use. The government contends that those determinations rendered Xenaderm ineligible for Medicaid and Medicare reimbursement. Nonetheless, the government alleges, Healthpoint misrepresented the regulatory status of Xenaderm when it submitted quarterly reports to the government. As a result, the government contends, Healthpoint knowingly caused false claims to be submitted for Xenaderm.

A settlement has been reached in a whistleblower class action lawsuit brought against American Sleep Medicine LLC who is accused of billing Medicare, TRICARE, and the Railroad Retirement Medicare Program for sleep diagnostic services that were not eligible for payment.

The whistleblower will receive $2,601,228 of the government's recovery.

The initial whistleblower case was filed in 2007.  The government's complaint alleged that American Sleep submitted false claims to Medicare and TRICARE between Jan. 1, 2004, and Dec. 31, 2011.   They were false because the diagnostic testing services were performed by technicians who lacked the required credentials or certifications which is in violation of the False Claims Act.

A settlement has been reached in a whistleblower class action lawsuit brought against EMH Regional Medical Center (EMH) and North Ohio Heart Center Inc (NOHC). They are accused of submitting false claims to Medicare.

Making up the $4,400,000 settlement, EMH Regional Medical Center (EMH) has agreed to pay the United States $3,863,857 and North Ohio Heart Center Inc. (NOHC) has agreed to pay the United States $541,870. The whistleblower will receive $660,859.

The initial whistleblower case was filed in October of 2006.  The government's complaint alleged that between 2001 and 2006 EMH and NOHC performed unnecessary cardiac procedures on Medicare patients. Specifically, the United States alleged that EMH and NOHC performed angioplasty and stent placement procedures on patients who had heart disease but whose blood vessels were not sufficiently occluded to require the particular procedures at issue.

A settlement has been reached to resolve False Claims Act allegations against St. Joseph’s Medical Center in Towson, MD, who is accused of submitting false claims to Medicare, Medicaid and other federal healthcare programs.

This settlement resolves the hospital’s civil liability to the United States under the False Claims Act for the hospital’s disclosure that from 2007-2009 it engaged in a practice of admitting patients to the hospital unnecessarily. In particular, the hospital disclosed that it admitted patients for short stays – typically one or two days – that were not warranted by the patient’s medical condition, and thereby generated a larger reimbursement than was proper for each patient. Of the $4.9 million to be paid by St. Joseph’s, $4.6 million will go the United States, and $152,406 will go to the state of Maryland, which is also a party to the agreement.

A settlement has been reached in a whistleblower class action lawsuit brought against Grace Healthcare LLC and its affiliate Grace Ancillary Services LLC (Grace) . They are accused of knowingly submitting or causing the submission to the Medicare and TennCare/Medicaid programs of false claims for medically unreasonable and unnecessary rehabilitation therapy.

The whistleblower in this case will receive $405,000.

The whistleblower case was originally filed in 2010.  The federal government alleged in ten nursing home facilities in which Grace provided physical, occupational, and speech therapy for periods ranging from 2007 through June of 2011, Grace pressured therapists to increase the amount of therapy provided to patients in order to meet targets for Medicare revenue that were set without regard to patients’ individual therapy needs and could only be achieved by billing for a large amount of therapy per patient. As part of the settlement, Grace has agreed to enter into a Corporate Integrity Agreement with the Inspector General of the Department of Health and Human Services that provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to the settlement.

A settlement has been reached in a whistleblower class action lawsuit brought against Hospice of Arizona LC, along with a related entity, American Hospice Management LLC, and their parent corporation, American Hospice Management Holdings LLC.  They are accused of submitting or causing the submission of false claims to the Medicare program for ineligible hospice services.

The whistleblower in this case will receive $1.8 million.

The initial whistleblower suit was filed in 2010.  The government's allegations were that Hospice of Arizona and its related entities submitted or caused the submission of false Medicare claims between Sept. 1, 2002, and Dec. 31, 2010, for Hospice of Arizona patients who did not need end of life care or for whom the hospice billed at a higher reimbursement rate than it was entitled.

The government alleged that Hospice of Arizona and its related entities, engaged in certain practices that resulted in the admission of ineligible patients or inflated bills, including pressuring staff to find more patients eligible for Medicare, adopting procedures that delayed and discouraged staff from discharging patients from hospice when they were no longer appropriate for such services, and not implementing an adequate compliance program that might have addressed these problems. As part of the settlement, American Hospice Management Holdings has agreed to enter into a corporate integrity agreement with the Inspector General of the Department of Health and Human Services that provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to the settlement.

A settlement has been reached in a whistleblower class action lawsuit brought against Sound Inpatient Physicians Inc who is accused of overbilling Medicare and other federal health care programs.

The whistleblower will receive $2.7 million of the settlement amount.

The initital whistleblower lawsuit was filed in May 2009.  The United States alleged that, between 2004 and 2012, Sound Physicians knowingly submitted to federal health benefits programs inflated claims on behalf of its hospitalist employees for higher and more expensive levels of service than were documented by hospitalists in patient medical records.

A settlement has been reached in a whistleblower class action lawsuit brought against TranS1 Inc who is accused of causing health care providers to submit false claims to Medicare and other federal health care programs for minimally-invasive spine surgeries.

The whistleblower will receive $1,020,000 from the settlement.

The government's case was based upon a whistleblower lawsuit filed in April of 2011.  The federal allegations were that TranS1 knowingly caused health care providers to submit claims with incorrect diagnosis or procedure codes for minimally-invasive spine fusion surgeries using Trans1’s AxiaLIF System.  That device was developed as alternative to invasive spine fusion surgeries.  The United States further alleged that TranS1 improperly counseled physicians and hospitals to bill for the AxiaLIF System by using incorrect and inaccurate codes intended for more invasive spine fusion surgeries.  Additionally, the government alleged that, as a result, health care providers received greater reimbursement than they were entitled to for performing the minimally-invasive AxiaLIF procedures.   

Further to those allegations were that TranS1 knowingly paid illegal remuneration to certain physicians for participating in speaker programs and consultant meetings intended to induce them to use TranS1 products, in violation of the Federal Anti-Kickback Statute, 42 U.S.C.  § 1320a-7b(b), and thereby caused false claims to be submitted to federal health care programs.  

Also alleged by the government were that TranS1 promoted the sale and use of its AxiaLIF System for uses that were not approved or cleared by the U.S. Food and Drug Administration, including use in certain procedures to treat complex spine deformity, and which were thus not covered by federal health care programs.