Social Issues

A settlement has been reached to resolve False Claims Act Allegations against Beazer Homes USA Inc.  They are accused of fraudulent mortgage origination activities in connection with federally insured mortgages.

According to the agreement, Beazer will pay $5 million dollars, plus contingent payments of up to $48 million dollars to be shared with victimized private homeowners.

The federal government alleged that when Beazer Mortgage Corp made Federal Housing Administration (FHA) insured mortgage loans for the purchase of homes built by Beazer Homes USA Inc., the companies fraudulently and improperly: 1) required purchasers to pay "interest discount points" at closing, but then kept the cash and failed to reduce interest rates; 2) provided cash "gifts" to home purchasers through certain charities, so purchasers could come up with minimum required down payments, with assurances the "gifts" would not have to be repaid, and then increased home purchase prices to offset the amount of the gifts; 3) obscured which of its branches made defaulting mortgage loans to avoid FHA detection of excessive default rates, and; 4) ignored "stated income" requirements in making loans to unqualified purchasers.

As a consequence, unqualified home buyers were induced to enter into FHA insured mortgages, interest rates for and the amount of FHA insured mortgages were improperly inflated, and Beazer Mortgage branches involved in fraudulent activity were hidden from the FHA. In some instances, mortgages that resulted from these fraudulent activities defaulted. When they did so, holders of the loans made FHA mortgage insurance claims and the FHA was wrongfully required to pay inflated claims, and to pay for the management, maintenance, rehabilitation and marketing of defaulted properties. 

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 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.

A settlement has been reached in a whistleblower class action lawsuit brought against CareSource, CareSource Management Group Co and CareSource USA Holding Co. They are accused of causing Medicaid to make payments for assessments and case managements they failed to provide to children and adults.

The whistleblowers will receive a $3.1 million share of the government's recovery.

Originally filed in November 2006, the United States alleged that between January 2001 and December 2006, the CareSource entities knowingly failed to provide required screening, assessment and case management for adults, and children with special health care needs. As a result, it was alleged that CareSource received millions of dollars in Medicaid funds to which it was not entitled. The CareSource entities subsequently submitted false data to the state of Ohio so that it appeared they were providing these required services to improperly retain incentives received from Ohio Medicaid and to avoid penalties.

A settlement has been reached in a whistleblower class action lawsuit brought against Alaska DigiTel LLC, a former Alaska limited liability company now owned by General Communication Inc. (GCI), who is accused of submitting false claims to the Federal Communications Commission’s (FCC) Low Income Support Program.

The whistleblower will receive $260,274 from the settlement.

Originally filed in 2008, the United States alleged that Alaska DigiTel violated the False Claims Act by submitting claims to the Low Income Support Program for improperly substantiated, duplicative, or otherwise ineligible subscribers for the period from Jan. 1, 2004, though Aug. 31, 2008.

The Low Income Support Program of the Universal Service Fund, which includes the Lifeline, LinkUp and Toll Limitation Services, was created by Congress in the Telecommunications Act of 1996 and is administered by the Universal Service Administrative Company for the FCC. Under the Low Income Support Program, eligible individuals may apply for free ordiscounted phone or wireless services. Reimbursement is paid directly to Eligible Telecommunications Carriers, such as Alaska DigiTel.

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.

The whistleblowers will receive a $80,000 share of the government's recovery.

This lawsuit was originally filed in May 2008 and stemmed from a 2005 filing of a lawsuit against Kyphon Inc.  The United States' complaint alleged that Rex Healthcare routinely submitted claims to Medicare for a variety of minimally-invasive procedures during the period 2004 through 2007, which the hospital classified as inpatient admissions in order to increase its reimbursement from Medicare, despite the absence of medical necessity justifying the more expensive inpatient admissions. The government also made claims related to a variety of other minimally-invasive procedures that the hospital classified as inpatient admissions in order to increase its reimbursement when less costly outpatient visits would have been appropriate.

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.