False Claims Act

A settlement has been reached to resolve False Claims Act Allegations against BlueCross BlueShield of Illinois who is accused of  wrongly terminating insurance coverage and denying patient claims, among other claims.

Under the agreement, BlueCross BlueShield of Illinois will pay $14.25 million to the state of Illinois and $9.5 million to the United States. The company will also pay $1.25 million to Illinois for allegations under the state consumer fraud statute.

In detail, the United States contends that BlueCross BlueShield of Illinois wrongly terminated insurance coverage for private duty skilled nursing care for medically fragile, technologically dependent children, in order to shift the costs of such care to the Medicaid program. Medicaid funds a special program designed to provide home care for children at risk of institutionalization.

As a result, children whose specialized care should have been covered by BlueCross BlueShield of Illinois under the terms of existing insurance policies, were shifted to the government-funded Home and Community Based Services Medicaid program, operated by the Illinois Division of Specialized Care for Children under an agreement with the Illinois Department of Healthcare and Family Services. As a result, Medicaid spent millions of dollars providing care that should have been paid for by private insurance.

The settlement resolves claims that BlueCross BlueShield of Illinois denied patient claims based on internal, undisclosed guidelines that were more restrictive than the language provided to beneficiaries in plan policy materials. Additionally, the government alleged that BlueCross BlueShield of Illinois improperly told policy holders that children were not covered for private duty nursing during the claims review process sought after initial denials.

A settlement has been reached in a whistleblower class action lawsuit brought against CVS Pharmacy Inc  who is accused of submitting inflated prescription claims to the government.

Under the terms of the agreement with the United States and the 10 states, CVS will pay the United States $7,993,615.55 and the states $9,506,384.45 plus interest. The whistleblower will receive a total of $2,595,460: $1,278,978 of the United States’ recovery and $1,316,482 of the state proceeds from California, Florida, Indiana, Massachusetts, Michigan, New Hampshire, Nevada and Rhode Island. Alabama and Minnesota do not have state False Claims Act statutes.

Originally filed in September 2008, the United States alleged CVS submitted inflated prescription claims to the government by billing the Medicaid programs in Alabama, California, Florida, Indiana, Massachusetts, Michigan, Minnesota, New Hampshire, Nevada and Rhode Island for more than what CVS was owed for prescription drugs dispensed to Medicaid beneficiaries who were also eligible for benefits under a primary third party insurance plan (excluding Medicare as the primary payor). The United States also alleged that rather than billing the government for what the insured would have been obligated to pay had the claims been submitted solely to the third party insurer (typically the co-pay), CVS billed and was paid a higher amount by Medicaid.

A settlement has been reached in a whistleblower class action lawsuit brought against DynCorp International LLC and The Sandi Group (TSG). They are accused of submitting false claims to the Department of State.

According to the settlement, DynCorp has agreed to pay the United States $7.7 million and TSG agreed to pay $1.01 million. The whistleblowers will will share a total of up to $481,710 of the government’s recovery.

Originally filed in September 2006, the United States alleged that DynCorp submitted inflated claims for the construction of container camps at various locations in Iraq and that TSG sought reimbursement for danger pay that it falsely claimed to have paid its U.S. expatriate employees working in Iraq.

A settlement was reached to resolve False Claims Act allegations against Serono Laboratories Inc., EMD Serono Inc., Merck Serono S.A, and Ares Trading S.A. They are accused of paying health care providers to promote or prescribe Rebif, a recombinant interferon injectable that is used to treat relapsing forms of multiple sclerosis. 

Under the terms of the agreemen, the proceeds from the settlement will be split between the federal government and various states, with the United States receiving $34.6 million to resolve the federal claims and the states receiving $9.7 million to settle their respective claims under Medicaid.

Serono is alleged to have made payments to providers for hundreds of speaker training meetings and programs, as well as payments for attending consultant, marketing and advisory board meetings, all at upscale resorts and other locations. Serono’s actions allegedly resulted in the submission of false claims to federal health care programs including Medicare and Medicaid for the payment of Rebif, i.e., claims that were tainted by kickbacks.

A settlement was reached to resolve False Claims Act allegations against Ultralife Corporation, formerly known as Ultralife Batteries Inc., who is accused of failing to provide current, accurate and complete cost and pricing data related to three contracts with the U.S. Army.

In each of the three contracts at issue, Ultralife was alleged to have knowingly provided government contracting personnel with false certifications concerning the company’s cost and pricing information, which was not current, accurate and complete as required by law. As a result of the defective price disclosures, the Army paid inflated prices for the batteries it purchased.

A settlement has been reached in a whistleblower class action lawsuit brought against Midtown Imaging LLC, a radiology clinic, and its former owners Midtown Imaging P.A. and PBC Medical Imaging. They are accused of submitting false claims to Medicare during the period 2000 through 2008.

The whistleblowers will share in $600,000 of the government's recovery.

Originally filed in November 2009, the United States alleged that the West Palm Beach clinic is alleged to have submitted false claims to Medicare during the period 2000 through 2008 by entering into certain leasing and professional services agreements with referring physicians and physician groups that violated the Anti-Kickback Statute and Stark Law.