Medicaid or Medicare Fraud

A settlement has been reached in a whistleblower class action lawsuit brought against KV Pharmaceutical Company, which was the St. Louis-based parent company of now-defunct Ethex Corporation. Ethex Corporation was accused of failing to advise the Centers for Medicare and Medicaid Services (CMS) that two unapproved products did not qualify for coverage under federal health care programs.

According to the terms of the settlement, the federal share is $10,158,695, and the state Medicaid share is $6,841,305. The whistleblower will receive a total of $1,523,804 from the federal share and additional amounts from the state share. 

Originally filed in August 2002, the United States alleged that Ethex misrepresented the regulatory status of a pair of drugs, Nitroglycerin Extended Release Capsules (Nitroglycerin ER) and Hyoscyamine Sulfate Extended Release Capsules (Hyoscyamine ER), and failed to advise CMS that these unapproved drugs did not qualify for coverage under federal health care programs. As a result, the government contends, Ethex knowingly caused false claims to be submitted for Nitroglycerin ER and Hyoscyamine Sulfate ER. Ultimately, neither drug ever received full regulatory approval for safety and effectiveness, and neither product is currently on the market.

A settlement has been reached in a whistleblower class action lawsuit brought against fourteen hospitals located in New York, Mississippi, North Carolina, Washington, Indiana, Missouri and Florida. They are accused of submitting false claims to Medicare.

According to the settlement the recovery, amounts will be distributed as follows; Plainview Hospital, Plainview, N.Y. ($2,307,265); North Shore Syosset Hospital, Syosset, N.Y. ($192,735); North Mississippi Medical Center, Tupelo, Miss. ($1,894,683.30); Mission Hospital, Asheville, N.C. ($1.5 million); Wenatchee Valley Medical Center, Wenatchee, Wash. ($1,224,709.96); Community Hospital Anderson, Anderson, Ind. ($500,561.36); St. John’s Mercy Hospital, Creve Coeur, Mo. ($365,000); Gulf Coast Hospital, Fort Myers, Fla. ($173,005.86); Lee Memorial Hospital, Fort Myers, Fla. ($159,571.87); and Cape Coral Hospital, Cape Coral, Fla. ($73,279.47). Four hospitals affiliated with Adventist Health System/Sunbelt Inc. in Florida will pay a total of $3.9 million, and these include Florida Hospital Orlando, Florida Hospital-Oceanside, Florida Hospital Fish Memorial and Florida Hospital Heartland Medical Center. The two whistleblowers will share in the recovery amount of $2.1 million.

 The initial whistleblower case was filed in 2008. The United States alleged that the hospitals in question 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 outpatient procedure, but the government contends that the 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 Dava Pharmaceuticals Inc who is accused of misreporting drug prices in order to reduce its Medicaid Drug Rebate obligations.

The federal government’s portion of the settlement is approximately $5.7 million. Dava will also pay over $5 million to the Medicaid participating states and approximately $200,000 to certain public health services entities who paid inflated prices for the drugs at issue. The whistleblower will receive 15 percent of the settlement proceeds. 

The initial whistleblower case was filed in 2010. The United States alleged that, between October 1, 2005 and Septtember 30, 2009, Dava and its corporate predecessors knowingly underpaid their rebate obligations under the Medicaid Prescription Drug Rebate Program. Under that program, participating drug companies are required to pay quarterly rebates to state Medicaid programs based, in part, on whether a drug is a “generic” or “branded” product and the difference between what the health care program paid for the drug and prices paid by other purchasers.

The government contends that in order to reduce its Medicaid rebate obligation, Dava incorrectly treated its version of the drugs cefdinir, clarithromycin and methotrexate as “generic” drugs rather than “branded” products, thereby lowering the overall percentage rebate payable to Medicaid.  In addition, the government further alleges Dava reduced its Medicaid rebate obligations by incorrectly calculating average manufacturer prices for its versions of the drugs cefdinir, clarithromycin, methotrexate and rheumatrex.  As a result, the government alleges that Dava 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 Odyssey HealthCare, a subsidiary of Gentiva, who is accused of submitting false claims to the Medicare program for services that were unnecessary or not performed as Medicare requires.

The whistleblower's share of the government's recovery has not been disclosed.

The settlement resolves claims made from a few different whistleblower caes, the first of which was filed in 2008.  The United States alleged that Odyssey, between January 2006 and January 2009, submitted false claims to the Medicare program for continuous home care services that were unnecessary or that were not performed in accordance with Medicare requirements.

A settlement has been reached in a whistleblower class action lawsuit brought against LifeWatch Services Inc who is accused of submitting false claims to federal health care programs.

The whistleblowers will receive approximately $3.4 million plus interest as their share of the settlement proceeds.

The initial whistleblower case was filed December 2009.  The United States alleged that LifeWatch improperly billed Medicare for ambulatory cardiac telemetry (ACT) services. ACT services are a form of cardiac event monitoring that use cell phone technology to record cardiac events in real time without patient intervention. Traditional event monitoring requires the patient to press a button when he or she notices a cardiac event to record the cardiac rhythms. Medicare reimbursed ACT services at between $750 and $1200 and traditional event monitoring services at roughly $250 during the relevant time period.

According to the complaints, LifeWatch was aware that ACT services were not eligible for Medicare reimbursement for patients who had experienced only mild or moderate palpitations. The complaints allege that LifeWatch nonetheless submitted claims to Medicare for ACT services for such patients using a false diagnostic code in order to have the claims paid. In addition, according to the complaints, LifeWatch improperly induced Medicare claims for monitoring services by providing valuable services in the form of full-time employees to several hospitals and medical practices, without charge. The relators (whistleblowers) in their lawsuits alleged that these services amounted to kickbacks.

A settlement has been reached in a whistleblower class action lawsuit brought against Universal Health Services Inc (UHS) and two subsidiaries, Keystone Education and Youth Services LLC and Keystone Marion LLC, which did business as the Keystone Marion Youth Center.  They are accused of providing substandard psychiatric counseling and treatment to adolescents in violation of Medicaid requirements, falsifying records and submitting false claims to the Medicaid program.

The whistleblower's portion of the settlement was not disclosed.

The government interevened on this case in November 2009.  The United States alleged that Universal Health Services Inc. and its subsidiaries in Virginia made false records and presented false claims to Virginia Medicaid in connection with sub-standard care to emotionally troubled youth at a residential treatment facility in Marion, Virginia.

A settlement has been reached in a whistleblower class action lawsuit brought against Cypress Pharmaceutical Inc., its subsidiary Hawthorn Pharmaceuticals Inc. and its CEO, Max Draughn. They are accused of marketing three pharmaceutical products that were not approved as safe and effective by the Food and Drug Administration (FDA).

According to the settlement, the federal portion of the settlement, including payments due to the TRICARE program, is $1,615,783. The state Medicaid share of the settlement is $1,184,217.The whistleblower will receive a $300,000 share of the government's recovery.

The government alleged that although the drugs lacked the “safe and effective” designation, Hawthorn’s sale representatives promoted the products to physicians and state Medicaid officials using that designation. This caused TRICARE, the military’s health care program, and state Medicaid programs to improperly pay for the three products. The government also alleged that Cypress, Hawthorn and Draughn caused the submission to the Centers for Medicare and Medicaid Services (CMS) of false quarterly reports that misrepresented these products’ regulatory status and failed to advise CMS that the drugs did not qualify as outpatient drugs that were covered for payment.

A settlement has been reached in a whistleblower class action lawsuit brought against WellCare Health Plans Inc who is accused of a number of violations of the False Claims Act.

The settlement requires that Wellcare pay the United States and nine states – Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Missouri, New York and Ohio – a total of $137.5 million. WellCare may also be required to pay an additional $35 million in the event that the company is sold or experiences a change in control within three years of this agreement.

There were four whistleblowers that initiated cases against WellCare Health Plans Inc. The whistleblower that triggered the government's investigation will receive approximately $20.75 million.  The other three whistleblowers will share in a recovery of $4.66 million and will be entitled to receive an additional share of any contingency payment.

The first whistleblower lawsuit was filed June 2006.  The government's complaint alleged a number of schemes to submit false claims to Medicare and various Medicaid programs, including allegations that WellCare falsely inflated the amount it claimed to be spending on medical care in order to avoid returning money to Medicaid and other programs in various states, including the Florida Medicaid and Florida Healthy Kids programs; knowingly retained overpayments it had received from Florida Medicaid for infant care; and falsified data that misrepresented the medical conditions of patients and the treatments they received.

Additionally, it was alleged that WellCare engaged in certain marketing abuses, including the “cherrypicking” of healthy patients in order to avoid future costs; manipulated “grades of service” or other performance metrics regarding its call center; and operated a sham special investigations unit.

A settlement has been reached in a whistleblower class action lawsuit brought against Radiotherapy Clinics of Georgia LLC, and its affiliates RCOG Cancer Centers LLC, Physician Oncology Services Management Company LLC, Frank A. Critz, M.D. and Physician Oncology Services L.P. (RCOG).  They are accused of billing Medicare for medical treatment that was in excess of those permitted by Medicare rules and for services that were not medically necessary.  

The whistleblowers will receive a $646,000 share of the government's recovery.

The initial whistleblower lawsuit was filed in July 2008. The government alleged that RCOG overbilled Medicare for port films (X-ray images of the treatment area) and for simulations (the process by which radiation treatment fields are defined, filmed and marked on the skin in preparation for personalized radiation therapy).  Additionally, it was alleged that the practice overbilled Medicare for physics consults (production of complete special consultative reports for an individual patient) and for pre-plans ordered by Dr. Critz that were not medically necessary and/or never reviewed by the doctor.

A settlement has been reached to resolve False Calims Act Allegations against Tenet Healthcare Corporation who is accused of overbilling the federal Medicare program.

Tenet has owned and operated throughout the country, various inpatient rehabilitation facilities (IRFs).

The United States alleged that, between May 15, 2005, and Dec. 31, 2007, Tenet improperly billed Medicare for the treatment of patients at its IRFs when, in fact, these patient stays did not meet the standards to qualify for an IRF admission. IRFs are designed for patients who need an intense rehabilitation program that requires a multidisciplinary, coordinated team approach to improve their ability to function. Because the patients treated at these facilities require more intensive rehabilitation therapy and closer medical supervision than is provided in other settings, such as acute care hospitals or skilled nursing facilities, Medicare generally pays IRFs at a higher rate for rehabilitation care than it pays for such care in other settings.