Medicaid or Medicare Fraud

A settlement has been reached to resolve False Claims Act allegations against Covenant Medical Center who is accused of submitting false claims to Medicare by having financial relationships with five physicians that violated the Stark Law.

The federal government alleged that Covenant submitted false claims to Medicare by having financial relationships with five physicians that violated the Stark Law. The Stark Law prohibits a hospital from profiting from referrals of patients made by a physician with whom the hospital has an improper compensation arrangement. An arrangement is improper if a physician is paid above fair market value for their services and that compensation is not commercially reasonable. The Stark Law is intended to ensure that physicians' medical judgments are not compromised by improper financial incentives and are based solely on the best interests of the patient.

The United States alleged that Covenant violated the Stark Law by paying commercially unreasonable compensation, far above fair market value, to five employed physicians who referred their patients to Covenant for treatment. These physicians were among the highest paid hospital-employed physicians not just in Iowa, but in the entire United States.

A settlement has been reached in a whistleblower class action lawsuit brought against Endoscopic Technologies Inc (Estech) who is accused of marketing its medical devices for uses other than what is approved by the U.S. Food and Drug Administration (FDA).

The whistleblower will receive $210,000 as a recovery reward.

The case was originally filed by a whistleblower.  The United States' complaint alleged Estech marketed its medical devices to treat atrial fibrillation (the most common cardiac arrhythmia or abnormal heart rhythm), a use that is not approved by the FDA). The government also alleged that Estech promoted expensive heart surgeries using the company’s devices when less invasive alternatives were appropriate, advised hospitals to up-code surgical procedures using the company’s devices to inflate Medicare reimbursements, and paid kickbacks to healthcare providers to use its devices. The United States asserted that by engaging in this conduct, Estech knowingly violated the Food, Drug and Cosmetic Act and caused the submission of false and fraudulent claims in violation of the False Claims Act.

A settlement has been reached in a whistleblower class action lawsuit brought against Dr. Gabriel DeCandido who is accused of defrauding the Medicare program.

According to the settlement, the court permitted the government to seize five of his vehicles and garnish $976,000 that Dr. DeCandido transferred to his wife.The whistleblower's share of the recovery is $306,000.

This case was originally filed by a whistleblower in January 2005.  The United States alleged Dr. DeCandido violated the False Claims Act by billing the Medicare program for higher levels of service than he actually rendered to patients and by billing for services not provided. The government presented sufficient evidence showing that Dr. DeCandido attempted to hide and transfer his assets to avoid having to pay a judgment to the United States.

According to the terms of the settlement, the state of New York will pay $440 million over time, partly in cash and partly by releasing its claim to payments withheld. New York City’s share of the settlement, $100 million, will also be paid over time. The whistleblower in this case will receive $10 million from the settlement.

The United States alleged that for the period 1990 to 2001, the state of New York knowingly failed to provide proper guidance to the districts and counties outlining the requirements for a service to be covered by the Medicaid program, failed to monitor the districts and counties for compliance as required by the program and passed on claims to the federal government for services it knew were not covered or properly documented, all to make the United States pay a larger share of New York’s Medicaid costs.

The government additionally asserted New York City submitted claims to the state for false speech services. The state then passed these claims on to the federal government for Medicaid reimbursement.

A settlement has been reached in a whistleblower class action lawsuit brought against HealthEast Care System. Three HealthEast Care System hospitals are accused of submitting false claims to Medicare.

The two whistleblowers' recovery amounts from this lawsuit that was filed in 2008, were not specified.

The United States complaint asserts that three HealthEast Care System hospitals overcharged Medicare from 2002 to 2007 by thousands of dollars each time they performed kyphoplasty, a minimally-invasive procedure used to treat certain spinal fractures that often are due to osteoporosis. The procedure can be performed safely as an outpatient surgery, but the government contends that the HealthEast hospitals performed the procedure on an inpatient basis in order to increase their Medicare billings.

A settlement has been reached in a whistleblower class action lawsuit brought against Regency Nursing and Rehabilitation Centers Inc who is accused of submitting false claims to Medicare and the Texas Medicaid program.

Specifically the United States complaint alleged that Regency submitted claims for reimbursement to Medicare and Medicaid for rehabilitation and skilled nursing services that were not reimbursable because the nursing home residents were not qualified for the services, the services were not medically necessary, or they were not supported by adequate documentation.

A settlement has been reached in a whistleblower class action lawsuit brought against Aventis Pharmaceutical Inc., a wholly owned subsidiary of sanofi-aventis U.S. LLC.  Aventis is accused of misreporting drug prices in order to reduce its Medicaid Drug Rebate obligations.

According to the settlement, the federal recovery is approximately $49 million. Aventis will also pay over $40 million to the Medicaid participating states, and over $6 million to certain public health services entities who paid inflated prices for the drugs at issue.

The United States complaint alleged that between 1995 and 2000, Aventis and its corporate predecessors knowingly misreported best prices for the steroid-based anti-inflammatory nasal sprays Azmacort, Nasacort and Nasacort AQ. Under the Medicaid Drug Rebate Statute, Aventis was required to report to Medicaid the lowest, or "best" price that it charged commercial customers, and pay quarterly rebates to the states based on those reported prices.

In order to avoid triggering a new best price that would obligate it to pay millions of dollars in additional drug rebates to Medicaid, Aventis entered into "private label" agreements with the HMO Kaiser Permanente that simply repackaged Aventis’s drugs under a new label. As a result, Aventis underpaid drug rebates to the Medicaid program and overcharged certain Public Health Service entities for these products.

A settlement has been reached in a whistleblower class action lawsuit brought against San Mateo Medical Center (SMMC) who is accused of submitting false claims to the United States in connection with payments from the Medicare and Medicaid programs.

The whistleblower that filed the orignal complaint will receive $1,020,000.

The government alleges that SMMC falsely inflated its bed count to Medicare in order to receive higher payments under Medicare’s Disproportionate Share Hospital (DSH) adjustment. The DSH adjustment is an extra Medicare payment available to hospitals that meet certain requirements, including having 100 or more acute care beds.

In addition, the government alleges that San Mateo County improperly obtained federal payments under the Medicaid program for services provided to patients at Institutes of Mental Disease (IMDs) who were between the ages of 22 and 64. Such services are ineligible for federal funding, and San Mateo County was required to separately report them to the California Department of Mental Health so that the state could ensure that no federal funds were used to pay for them. Medicaid (known as Medi-Cal in California) is a program funded jointly by federal and state funds. The settlement covers conduct from 1997 to 2007.

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

According to the settlement agreement, the federal share of the civil settlement is $12,583,413.84, and the state Medicaid share of the civil settlement is $916,586.16. The whistleblower will receive a $2.2 million share of federal reward.

The whistleblower case was originally filed in September 2012.  The United States complaint alleged that between 2008 and 2013, NuVasive promoted the use of the CoRoent System for surgical uses that were not approved or cleared by the FDA, including for use in treating two complex spine deformities, severe scoliosis and severe spondylolisthesis.  As a result of this conduct, the United States alleged that NuVasive caused physicians and hospitals to submit false claims to federal health care programs for certain spine surgeries that were not eligible for reimbursement.  In more detail, the government complaint asserts NuVasive knowingly offered and paid illegal remuneration to certain physicians to induce them to use the CoRoent System in spine fusion surgeries, in violation of the federal Anti-Kickback Statute.  The illegal remuneration consisted of promotional speaker fees, honoraria and expenses relating to physicians’ attendance at events sponsored by a group known as the Society of Lateral Access Surgery (SOLAS).  SOLAS was allegedly created, funded and operated solely by NuVasive, despite its outward appearance of independence.      

A settlement has been reached in a whistleblower class action lawsuit brought against seven hospitals located in Florida, Mississippi, Texas, South Carolina, North Carolina and Alabama. They are accused of submitting false claims to Medicare.

The settling facilities include the following:

Lakeland Regional Medical Center, Lakeland, Fla. ($1,660,134.49)

The Health Care Authority of Morgan County – City of Decatur dba Decatur General Hospital, Decatur, Ala. ($537,892.88)

St. Dominic-Jackson Memorial Hospital, Jackson, Miss. ($555,949.35)

Seton Medical Center, Austin, Texas ($1,232,955.91)

Greenville Memorial Hospital, Greenville, S.C. ($1,026,764.01)

Presbyterian Orthopaedic Hospital, Charlotte, N.C.($637,872.57)

The Health Care Authority of Lauderdale County and the City of Florence, Ala., dba the Coffee Health Group, fka Eliza Coffee Memorial Hospital ($676,038.00)

The settlements with these facilities follow the settlements that the government reached in May 2009, September 2009, and May 2010 with 18 other hospitals for kyphoplasty-related Medicare claims, as well as the government’s May 2008 settlement with Medtronic Spine LLC, corporate successor to Kyphon Inc. The whistleblowers will receive a total of approximately $1.1 million as their share of the settlement proceeds.

Originally filed in 2008, the United States alleged that these hospitals overcharged Medicare between 2000 and 2008 when performing kyphoplasty, a minimally-invasive procedure used to treat certain spinal fractures that often are due to osteoporosis. In many cases, the procedure can be performed safely as a less costly out-patient procedure, but the government contends that the hospitals performed the procedure on an in-patient basis in order to increase their Medicare billings.