Archive

December 23, 2015

Memorial Health, Inc., Memorial Health University Medical Center, Inc., Provident Health Services, Inc., and MPPG, Inc. (d/b/a Memorial Health University Physicians) agreed to pay roughly $10 million to settle charges they violated the False Claims Act by submitting claims to the Government in violation of the Stark Law which prohibits hospitals from entering into improper financial relationships with referring physicians.  The settlement is the largest civil health care fraud recovery in the history of the United States Attorney’s Office for the Southern District of Georgia.  The allegations first arose in a whistleblower lawsuit filed by former Memorial Health CEO Phillip Schaengold under the qui tam provisions of the False Claims Act.  The whistleblower will receive a yet-to-be-disclosed whistleblower reward from the proceeds of the government’s recovery. DOJ (SDGA)

December 23, 2015

Pennsylvania-based Genesis HealthCare LLC agreed to pay $600,000 to resolve charges it violated the False Claims Act in connection with its operation of a skilled nursing facility known as the Potomac Center.  Specifically, the government alleged that employees of Potomac/Genesis failed to provide patient care activities as recorded in the resident medical record of a patient and failed to provide certain care activities consistent with standing physician orders. DOJ (EDVA)

December 23, 2015

Aria Health Systems, Inc. agreed to pay more than $3 million to settle two False Claims Act matters which Aria self-disclosed.  Aria agreed to pay $564,700 to resolve claims that a cardiologist performed unnecessary invasive procedures at their Torresdale Campus between October 2012 and April 2013.  Aria also agreed to pay $2.5 million to resolve claims of compensation to physicians that were in excess of fair market value and in violation of the Stark Act. DOJ (EDPA)

December 23, 2015

A $2.5 million settlement with long term care pharmacy Pharmerica, which services hundreds of nursing homes across the nation, completes the final leg of litigation involving the illegal promotion of Aranesp, an anemia drug manufactured by Amgen, Inc.  Including the 2013 settlement with Amgen ($24.9 million) and the 2014 settlement with Omnicare ($4.19 million), this settlement brings the government’s total recovery in this matter to just over $31.5 million.  The allegations were originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act. DOJ (DSC)

December 22, 2015

Coloplast Corp., a manufacturer of ostomy and continence care products, and Liberator Medical Supply, Inc., a medical products supplier, agreed to pay $3,160,000 and $500,000, respectively, to resolve allegations that Coloplast paid unlawful kickbacks to several medical suppliers, including Liberator, to induce them to conduct promotional campaigns designed to refer individual users to Coloplast products.  In addition to Liberator, the government alleged Coloplast also paid kickbacks to Byram Healthcare Centers, Inc.; CCS Medical, Inc.; Liberty Medical, Inc.; and Handi Medical, Inc. in return for marketing promotions and conversion campaigns.  The government alleged that in the case of Byram, Liberty, and Handi, Coloplast’s promotional campaigns allegedly included kickbacks in the form of funding for cash incentives – sometimes known as “spiffs” – paid to the suppliers’ sales personnel to induce them to refer patients to Coloplast products.  In other instances, Coloplast allegedly gave rebates or price concessions as inducements for the promotional campaigns.  The allegations first arose in a whistleblower lawsuit filed by two former employees and one current employee of Coloplast under the qui tam provisions of the False Claims Act.  They will receive a yet-to-be-determined whistleblower award from the proceeds of the government’s recovery. DOJ (DMA)

December 22, 2015

A physician’s assistant was sentenced to prison, and a doctor admitted taking bribes in connection with a long-running test referral scheme operated by New Jersey-based Biodiagnostic Laboratory Services LLC, its president and numerous associates.  Leonard Marchetta was sentenced to 42 months in prison and Bret Ostrager pleaded guilty to conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act by accepting bribes.  They are two of the 39 people – 26 of them doctors – who have pleaded guilty in connection with the bribery scheme, which have involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies.  It is believed to be the largest number of medical professionals ever prosecuted in a bribery case.  The investigation has to date recovered more than $12 million through forfeiture. DOJ (DNJ)

December 18, 2015

Ohio cardiologist Dr. Harold Persaud, with hospital privileges at Fairview Hospital, St. John’s Medical Center and Southwest General Hospital, was sentenced to 20 years in prison for performing unnecessary catheterizations, tests, stent insertions and causing unnecessary coronary artery bypass surgeries as part of a scheme to overbill Medicare and other insurers by $29 million.  DOJ

December 18, 2015

21st Century Oncology, a Florida-based provider of integrated cancer care services, agreed to pay $19.75 million to resolve allegations it violated the False Claims Act by billing federal health care programs for laboratory tests that were not medically necessary.  The tests involved were fluorescence in situ hybridization (or “FISH”) tests which are laboratory tests performed on urine that can detect genetic abnormalities associated with bladder cancer.  The government alleged that 21st Century submitted claims for unnecessary FISH tests that were ordered by four of its urologists, Dr. Meir Daller, Dr. Steven Paletsky, Dr. David Spellberg and Dr. Robert Scappa.  The government further alleged the company encouraged these physicians to order unnecessary FISH tests by offering bonuses that were based in part on the number of tests referred to 21st Century’s laboratory.  The allegations first arose in a whistleblower lawsuit filed by a former 21st Century medical assistant under the qui tam provisions of the False Claims Act.  The whistleblower will receive a whistleblower award of $3.2 million from the proceeds of the government’s recovery.  DOJ

December 18, 2015

Maryland-based splint supplier Dynasplint Systems Inc., and its founder and president, George Hepburn, agreed to pay roughly $10.3 million to resolve allegations they violated the False Claims Act by improperly billing Medicare for splints provided to patients in skilled nursing facilities.  According to the government, to circumvent Medicare rules which provide for bundled payment to these facilities that cover all of a patient’s needs, Hepburn and Dynasplint mispresented that patients were in their homes or other places that were not skilled nursing facilities.  The allegations first arose in a whistleblower lawsuit filed by former Dynasplint sales executive Meredith Deane under the qui tam provisions of the False Claims Act.  Ms. Deane will receive a whistleblower award of roughly $2 million from the proceeds of the government’s recovery.  DOJ

December 18, 2015

Iowa Hospice, LLC agreed to pay roughly $1.1 million to settle charges it violated the False Claims Act by submitting false bills to Medicare for hospice services. The Medicare hospice benefit is only available to patients who elect palliative care for a terminal illness and who have a life expectancy of six months or less.  The government alleged that Iowa Hospice knowingly submitted false claims to the government for payment of these services for patients that did not have such a medical prognosis.  DOJ (N.D. OH)