Archive

November 25, 2015

Defense contractor L-3 Communications Eotech, Inc., its parent company, L-3 Communications Corporation, and Eotech president Paul Mangano, agreed to pay $25.6 million to settle charges they violated the False Claims Act by selling defective holographic weapon sights to the Department of Defense, Department of Homeland Security, and the Federal Bureau of Investigation.  Defendants knew the sights failed to perform as represented in cold temperatures and humid environments, but delayed disclosure of these defects for years. DOJ (SDNY)

November 24, 2015

The former CFO of Long Beach, California-based Pacific Hospital, two orthopedic surgeons and two others have been charged in long-running health care fraud schemes that illegally referred thousands of patients for spinal surgeries and generated nearly $600 million in fraudulent billings.  The wide-ranging kickback scheme, which involved dozens of surgeons, orthopedic specialists, chiropractors, marketers and other medical professionals, involved improper referrals to Pacific Hospital and Hawaiian Hospital.  The most recent targets of the government’s investigation, all of whom have agreed to plead guilty, include: former Pacific Hospital CFO James L. Canedo; orthopedic surgeons Philip Sobol and Mitchell Cohen; chiropractor Alan Ivar; and health care marketer Paul Richard Randall, previously affiliated with Pacific Hospital and Tri-City Regional Medical Center in Hawaiian Gardens.  Under the terms of their plea agreements, Sobol faces a federal prison term of up to 10 years; Canedo, Ivar and Randall face up to five years in prison; and Cohen faces up to three years in prison.  All of them will be required to pay restitution to the victims of the scheme, which in Canedo’s case will be at least $20 million.  Whistleblower Insider

November 20, 2015

Novartis Pharmaceuticals Corp. agreed to pay $390 million to resolve charges it gave kickbacks to specialty pharmacies in return for recommending two of its drugs, Exjade and Myfortic.  The settlement follows the January 2014 and April 2015 settlements of specialty pharmacies Bioscrip, Inc. and Accredo Health Group under which the pharmacies agreed to pay a total of $75 million to resolve False Claims Act charges based on the same allegations.  That brings to $465 million the total government recovery from this alleged kickback scheme.  The allegations leading to the settlement were first brought to the attention of federal law enforcement by David Kester, who filed a whistleblower lawsuit under the qui tam provisions of the False Claims Act.  He will receive a yet-to-be disclosed whistleblower award from the government’s recovery.  Whistleblower Insider

November 20, 2015

The University of Florida agreed to pay $19.875 million to settle allegations the university improperly charged the U.S. Department of Health and Human Services for salary and administrative costs on hundreds of federal grants.  According to the government, the university overcharged hundreds of grants for the salary costs of its employees, where it did not have documentation to support the level of effort claimed on the grants for those employees.  The government also contended the university charged for impermissible administrative costs for equipment and supplies and inflated costs charged to the grants.  DOJ

November 19, 2015

Florida-based hospice company Hospice of Citrus County agreed to pay roughly $3 million to settle charges the company violated the False Claims Act by knowingly billing Medicare and Medicaid for medically unnecessary and undocumented hospice services.  The allegations resolved included liability under the False Claims Act.  Specifically, the government alleged the company treated at least 52 patients with lengths of stay in excess of 1,000 days and either knowingly or recklessly failed to document a valid basis for the initial start of hospice care and/or subsequent hospice coverage.  The failure in documentation included no support for the length of hospice services; patient files that failed to document basic patient characteristics; and patient records that were either unsigned or signed with inconsistent practitioner information.  In some cases, patients were admitted to HOCC simply because their spouse was in hospice care.  DOJ (MDFL)

November 18, 2015

Deaconess Home Health, Inc. (formerly known as Outreach Home Health) and its owner, Lazarus Bonilla, agreed to pay $3,724,000 to resolve charges they violated the False Claims Act through the false billing of personal care worker services to the Wisconsin Medicaid Program.  Specifically, the defendants (1) intentionally recruited patients for personal care services without regards to whether the services were medically necessary; (2) instructed nurses employed by Deaconess to routinely inflate, without regard to medical necessity, the assessment of the patient that was provided to the Medicaid program; (3) failed to conduct required supervisory visits to ensure that services were in fact being provided, that services continued to be medically necessary, and that any services provided were appropriate for the needs of the patient; and (4) hired physicians to act as medical directors to sign plans of care for patients on whom they had not completed a physical examination.  The allegations first arose in three whistleblower lawsuits filed under the qui tam provisions of the False Claims Act.  Two of the whistleblowers are former employees of Deaconess.  The whistleblowers collectively will receive a whistleblower award of approximately $600,000.  (DOJ (EDWI)

November 16, 2015

Pittsburgh-based for-profit education company Education Management Corp. agreed to pay $95.5 million to resolves allegations it violated the federal False Claims Act and several state False Claims Acts by falsely certifying it was in compliance with Title IV of the Higher Education Act and parallel state statutes.  The government alleged the company violated the statute’s Incentive Compensation Ban by running a high pressure boiler room where admissions personnel were paid based purely on the number of students they enrolled.  The allegations first arose in series of whistleblower lawsuits filed under the qui tam provisions of the False Claims Act.  The whistleblowers will collectively receive a whistleblower award of $11.3 million from the proceeds of the government’s recovery.  Whistleblower Insider IN, IL, IA, MT, NJ, NY, NM, VA, WA

November 16, 2015

HCA Holdings, Inc. (including affiliated entities Hospital Corporation of America; Parallon Business Solutions, LLC; West Florida Regional Medical Center, Inc.; HCA Health Services of Florida, Inc.; Regional Medical Center Bayonet Point; HCA Health Services of Florida, Inc.; New Port Richey Hospital, Inc.; and Medical Center of Trinity) agreed to pay $2 million to resolve charges of violating the False Claims Act through billing Medicare for unnecessary lab tests and double billing for fetal testing.  The allegations first arose in a whistleblower lawsuit by HCA employee Kelly Oxendine under the qui tam provisions of the False Claims Act.  The whistleblower will receive a whistleblower award of roughly $400,000 from the government’s recovery.  DOJ(SC)

November 4, 2015

AstraZeneca LP and Cephalon, Inc. agreed to pay $54 million to settle government charges they violated federal and state False Claims Acts by overcharging state Medicaid programs for their pharmaceutical products.  AstraZeneca will pay $46.5 million and Cephalon, the wholly-owned subsidiary of Teva Pharmaceutical Industries. Ltd., will pay $7.5 million.  According to the government, the two pharmaceutical companies underpaid drug rebates owed the states under the Medicaid Drug Rebate Program, which requires drug makers to periodically return to the government a portion of their Medicaid proceeds.  The allegations first arose in a whistleblower lawsuit filed by Virginia pharmacist and attorney Ronald Streck under the quit tam provisions of the Federal False Claims Act, New York False Claims Act and other state false claims statutes.  Mr. Streck will receive a yet-to-be-disclosed whistleblower award from a portion of the government’s recoveries.  Whistleblower Insider

November 2, 2015

Massachusetts-based telecom software company NetCracker Technology Corp. agreed to pay $11.4 million, and Virginia-based information technology company Computer Sciences Corp. agreed to pay $1.35 million to settle charges they violated the False Claims Act by using individuals without security clearance on a government defense contract.  The allegations first arose in a whistleblower lawsuit filed by former NetCracker employee John Kingsley under the qui tam provisions of the False Claims Act.  Mr. Kingsley will receive a whistleblower award of $2,358,750 as his share from the government’s recovery in this case. Whistleblower Insider