Medicaid or Medicare Fraud

A settlement has been reached in a whistleblower class action lawsuit brought against Ammed Direct LLC who is accused of submitting false claims to Medicare and TennCare.

Under the terms of the settlement, AmMed will pay $17,560,997 to the United States and $439,003 to Tennessee. The whistleblower's portion of the recovery is $2.88 million.

The whistleblower's lawsuit was filed March 2009.  The United States alleged  from September 2008 through January 2010, AmMed submitted false claims to Medicare and TennCare for diabetes testing supplies, vacuum erection devices and heating pads. The United States and Tennessee asserted that AmMed widely advertised free cookbooks in order to induce Medicare beneficiaries to contact AmMed or its hired telemarketing firm. Once AmMed confirmed that a beneficiary was covered by Medicare, AmMed representatives improperly attempted to sell the beneficiary supplies that would be paid for by Medicare. Medicare rules prohibit medical businesses from making unsolicited telephone contact with beneficiaries to sell them their products, unless specific exceptions apply.

The United States and Tennessee further alleged that, as a result of AmMed’s improper marketing, many Medicare beneficiaries who called AmMed to receive the advertised free cookbooks returned their diabetic supplies to AmMed. AmMed, however, failed to timely refund the money to Medicare or TennCare. Rather, AmMed allowed the unpaid refunds to accrue from September 2006 until January 2010. Prior to learning of the United States’ and Tennessee’s investigation, AmMed disclosed to the Medicare Administrative Contractors its failure to refund monies for returned supplies and began paying the refunds to Medicare and TennCare.

A settlement has been reached in a whistleblower class action lawsuit brought against Walgreens who is accused of offering illegal inducements to beneficiaries of government health care programs.

The whistleblower will receive $1,277,172 as the recovery of the federal share settlement of $7,298,124.

The whistleblower case was filed in September 2008.  The United States alleged that Walgreens offered illegal inducements to beneficiaries of government health care programs, including Medicare, Medicaid, TRICARE and the Federal Employees Health Benefits Program (FEHBP), in the form of gift cards, gift checks and other similar promotions that are prohibited by law, to transfer their prescriptions to Walgreens pharmacies.  The government investigation alleged that Walgreens had offered government health beneficiaries $25 gift cards when they transferred a prescription from another pharmacy to Walgreens.  The company’s advertisements that promoted gift cards and gift checks for transferred prescriptions typically acknowledged that the offer was not valid with Medicaid, Medicare or any other government program.  Nevertheless, the government alleged that Walgreens employees frequently ignored the stated exemptions on the face of the coupons and handed gift cards to customers who were beneficiaries of government health programs, in violation of federal law.

A settlement has been reached to resolve False Claims Acts allegations against McKesson Corporation who is accused of reporting inflated pricing information for a large number of prescription drugs, causing Medicaid to overpay for those drugs.

The government alleges that McKesson reported the inflated pricing data to First DataBank (FDB), a publisher of drug prices that are used by most state Medicaid programs to set payment rates for pharmaceuticals. The drug pricing data at issue relates to the “Average Wholesale Price” (AWP) benchmark used by Medicaid and other programs to set payment rates for pharmaceuticals. The settlement is based on the United States’ allegations that McKesson reported inflated mark-up percentages to FDB for a wide variety of brand name drugs, causing FDB to publish inflated AWPs for those drugs.

A settlement has been reached in a whistleblower class action lawsuit brought against Orthofix Inc who is accused of improperly waiving patient co-payments and paying kickbacks to physicians.

The whistleblower will receive a $9,243,251 share of the civil settlement amount.

The government's complaint stemmed from a whistleblower lawsuit that was filed in March 2005.  The United States alleged that Orthofix  improperly waived patient co-payments, thus misstating their true cost and resulting in overpayments by federal programs; paid kickbacks to physicians and their staffs in the form of “fitter fees,” referral fees and other comparable fees, to induce the use of Orthofix products; caused the submission of falsified certificates of medical necessity; and failed to advise patients of their right to rent rather than purchase Orthofix products.

The company has also agreed to plead guilty to a felony of obstruction of a federal audit, and to pay a $7,765,737 criminal fine. The company’s criminal guilty plea involved its failure to disclose information concerning its practices regarding certificates of medical necessity to a Medicare contractor during a June 2008 audit. Five individual Orthofix employees had previously pleaded guilty to criminal charges in connection with this matter.

A settlement has been reached in a whistleblower class action lawsuit brought against Hospice Care of Kansas LLC and its parent company, Ft. Worth, Texas-based Voyager HospiceCare Inc. They are accused of submitting claims to the Medicare program for ineligible hospice services.

The whistelblower will receive a $1.342 million share in the government's recovery.

The government's complaint stemmed from an initital whistleblower case filed in October 2006.  The United States alleged that Hospice Care of Kansas and Voyager,  between January 2004 and December 2008, engaged in certain practices that resulted in the submission of false claims, including the provision of compensation to clinical employees based on patient census and admissions, delaying discharges of patients determined not to have a six month or less prognosis, instructions to staff to document patient conditions in a misleading manner, and implementation of an inadequate compliance program.

A settlement has been reached in a whistleblower class action lawsuit brought against AHS Hospital Corp, Atlantic Health System Inc, and Overlook Hospital. They are accused of overbilling Medicare.

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

The initial whistleblower case was filed in April 2008.  The United States alleged that Overlook Hospital, owned and operated by AHS Hospital Corporation, and Atlantic Health Systems Inc., overbilled Medicare for patients who were treated on an inpatient basis when they should have been treated as either observation patients or on an outpatient basis.

A settlement has been reached in a whistleblower class action lawsuit brought against Nextcare Inc who is accused of submitting false claims to Medicare, TRICARE and the Federal Employees Health Benefits Program, as well as the Medicaid programs for various different states.

The whistleblower will receive a $1.614 million share of the government's recovery.

The government's complait stems from a whistleblower lawsuit filed in December 2009 that alleged that NextCare submitted false claims to Medicare, TRICARE and the Federal Employees Health Benefits Program, as well as the Medicaid programs of Colorado, Virginia, Texas, North Carolina and Arizona, by billing for unnecessary allergy, H1N1 virus and respiratory panel testing. The United States also alleged that NextCare inflated billings for urgent care medical services in the years under review, a practice known as upcoding.

A settlement has been reached in a federal lawsuit brought by the United States against James W. Carell, CareAll Management LLC (formerly known as Diversified He alth Mana gement Inc.), C are All Inc., the James W. Car ell Family Trust, V IP Home Nursing and Reh abilitation Servi ces L LC, Professional Home He alth Care L LC, University Home H ealth, LLC and Elizabeth Vining (as representative of the Estate of Robert Vining).  They are accused of causing Medicare to pay out money through mistake of fact, and were unjustly enriched by falsely concealing the home health agencies’ relationship with their management company.

This settlement resolves the United States’ lawsuit alleging that the CareAll entities fraudulently submitted eight cost reports for fiscal years 1999, 2000 and 2001 to support their Medicare billings. The United States alleged that these cost reports were false because they knowingly hid the relationship between the management company and the home health agencies. According to the complaint the United States filed in this case, the cost reports should have disclosed that the management company was related to the home health agencies, which would have lowered the Medicare reimbursement for the management company’s services. During the relevant years, the United States alleged that James W. Carell owned the management company, and his friend Robert Vining – an attorney who lived in Missouri – served as the nominee or “sham” owner of the home health agencies.  

The United States further alleged in court filings that the management company exerted significant control over the home health agencies in a myriad of ways, including:  James. W. Carell’s key role in facilitating Robert Vining’s purchase of the home health agencies; loans worth millions of dollars from companies owned by James W. Carell to the home health agencies; cash transfers for millions of dollars from the management company to the home health agencies; the management company’s day to day control over the home health agencies’ operations; and Robert Vining’s role as a mere figurehead owner.  The United States also alleged in court filings that James W. Carell profited greatly from this “sham” owner relationship and that he monetarily rewarded Robert Vining for his participation in this scheme. 

A settlement has been reached in a whistleblower class action lawsuit brought against HCA Inc who is accused of violating the False Claims Act and the Stark Statute.

As part of the civil settlement, HCA has agreed to pay $16.5 million to the United States and the state of Tennessee, with the federal portion representing $15,693,000 of the settlement amount. The whistleblower will receive an 18.5 percent share.

The initial whistleblower lawsuit was filed in March 2008.  The United States alleged that during 2007, HCA, through its subsidiaries Parkridge Medical Center, located in Chattanooga, TN, and HCA Physician Services (HCAPS), headquartered in Nashville, TN, entered into a series of financial transactions with a physician group, Diagnostic Associates of Chattanooga, through which it provided financial benefits intended to induce the physician members of Diagnostic to refer patients to HCA facilities. These financial transactions included rental payments for office space leased from Diagnostic at a rate well in excess of fair market value in order to assist Diagnostic members to meet their mortgage obligations and a release of Diagnostic members from a separate lease obligation.

A settlement has been reached in a whistleblower class action lawsuit brought against RxAmerica, a wholly-owned subsidiary of CVS Caremark Corporation, who is accused of making false submissions to the Centers for Medicare & Medicaid Services (CMS).

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

The government's case is based upon two different whistleblower lawsuits, the first of which was filed in November 2008.  The United States alleged that during the period Jan. 1, 2007, to Dec. 31, 2008, RxAmerica made false submissions to CMS regarding prices for certain generic prescription drugs used for Plan Finder, despite certifying to CMS that it would submit accurate pricing data for Plan Finder. As a result, the government alleged that RxAmerica received Medicare Part D payments for claims for the covered drugs at prices that in some cases were significantly higher than the pricing data RxAmerica submitted to CMS for use on Plan Finder.