Archive

January 12, 2017

Texas announced a settlement with MB2 Dental Solutions (MB2) and 21 affiliated pediatric dental practices. MB2 agreed to pay the United States and the State of Texas $8.45 million for alleged violations of the federal False Claims Act (FCA) and the Texas Medicaid Fraud Prevention Act (TMFPA). Three lawsuits were resolved with this settlement alleging that MB2 knowingly submitted claims for children’s dental services which were either not performed or were provided after false identification was used. The claims also involved illegal kickbacks to Medicaid beneficiaries and their families, marketers and marketing entities. The allegations were brought to the attention of the U.S. and Texas authorities by whistleblowers who filed one lawsuit under the FCA and two under the TMFPA. TX

October 3, 2016

California orthopedic clinics Orthopedic Associates of Northern California, San Bernardino Medical Orthopaedic Group Inc. (doing business as Arrowhead Orthopaedics) and Reno Orthopaedic Clinic agreed to pay a combined $2.39 million to resolve federal and state False Claims Act allegations that they improperly billed federal and state health care programs for reimported osteoarthritis medications, known as viscosupplements.  According to the government, the clinics purchased deeply discounted viscosupplements that were reimported from foreign countries and billed them to state and federal health care programs in order to profit from the reimbursement system, when such reimported viscosupplements were not reimbursable by those programs.  The reimported products allegedly included labeling in foreign languages and in English for additional uses not approved in the United States.  The government further alleged there was no manufacturer assurance that the drugs had not been tampered with or that it was stored appropriately.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by a Senior Musculoskeletal Specialty Manager in the Biosurgery Division of Sanofi S.A.  The whistleblower will receive a whistleblower award of approximately $430,000 from the proceeds of the government's recovery.  DOJ (EDCA)

October 17, 2016

New York has joined with other states and the federal government and reached agreement with institutional pharmacy Omnicare Inc. (Omnicare) to settle civil allegations that Omnicare conspired with Illinois-based pharmaceutical drug manufacturer Abbott Laboratories (Abbott) to increase overall utilization of the drug Depakote through the use of various disguised kickback arrangements. Omnicare, acquired by CVS Health Corporation effective August 18, 2015, provides pharmaceuticals and related pharmacy services to long-term care facilities as well as chronic care facilities and other settings. Depakote is approved for treatment of seizure disorders, mania associated with bipolar disorder and prophylaxis of migraines. Omnicare will pay the states and the federal government a total of $28.125 million in civil damages to compensate Medicaid, Medicare, and various other federal healthcare programs for harm suffered as a result of its conduct. NY

October 5, 2016

A transportation company, its owner, and three managers have been indicted in connection with an alleged scheme involving $19 million in false claims billed to the state’s Medicaid program (MassHealth), Attorney General Maura Healey announced. The company primarily provided MassHealth members with non-emergency transportation services to methadone clinics. The AG’s Office alleges that between April 2011 and September 2015, Westminster-based Rite Way LLC (Rite Way) fraudulently and repeatedly billed MassHealth for transportation services that were never provided, including claims for individuals who were hospitalized in inpatient settings, no longer used the company’s services, or were deceased on the claimed dates of service. MA

September 26, 2016

New York announced that it has entered into a settlement agreement with First Call, Inc., to resolve allegations that it billed Medicaid for transportation services provided by unqualified drivers and without required documentation. The investigation settled False Claims Act allegations that are identified in the settlement agreement, pursuant to a qui tam lawsuit filed by whistleblower Thomas D. Ayers asserting claims under the New York False Claims Act. As a result of the settlement, the company will pay New York State $173,650.83 in restitution and damages pursuant to the New York False Claims Act. NY

August 24, 2016

New York hospitals Beth Israel Medical Center (d/b/a Mount Sinai Beth Israel), St. Luke’s-Roosevelt Hospital Center (d/b/a Mount Sinai St. Luke’s) and Mount Sinai Roosevelt, and Continuum Health Partners, agreed to pay $2,950,000 to settle charges that they violated the federal and New York False Claims Act by willfully delaying repayment of over $800,000 in Medicaid overpayments that resulted from improper claims submitted because of a software error.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act.  The whistleblower will receive a yet-to-be-determined award from the proceeds of the government's recovery.  DOJ (SDNY)

August 24, 2016

New York and the Justice Department announced that three hospitals in the Mount Sinai Health System are paying a total of $2.95 million to resolve allegations that the hospitals knowingly retained over $844,000 in overpayments made by Medicaid in violation of the federal and New York False Claims Acts. Knowing retention of an overpayment from the government for more than sixty days is known as a “reverse false claim” and is a violation of both federal and state false claim acts. The entities involved include Mount Sinai Beth Israel (“Beth Israel”) (formerly Beth Israel Medical Center), Mount Sinai St. Luke’s (“St. Luke’s”) (formerly St. Luke’s Hospital) and Mount Sinai Roosevelt (“Roosevelt”) (formerly Roosevelt Hospital) (together, the “Hospitals”) – and the Hospitals’ former partnership group, Continuum Health Partners, Inc. (“Continuum,” and together with the Hospitals, “Defendants”). As part of the settlements, Defendants admitted that, beginning in 2009 due to a software compatibility issue, a coding error caused Defendants to submit claims for payment above and beyond what they had received from the managed care organization, and that Medicaid paid these claims as a secondary payor. In September 2010, the New York Office of the State Comptroller brought to Continuum’s attention a small number of these claims, and Defendants admitted that in late 2010 they were made aware of the coding error. NY

August 17, 2016

New York announced a $1.1 million dollar settlement resolving a whistleblower case against My Pillow, Inc., a Minnesota corporation that sells pillows and other sleep-related products. The lawsuit alleged that My Pillow knowingly failed to collect and remit New York sales taxes on sales made to New York customers through its website and over the telephone. The action began when a whistleblower filed a complaint in state Supreme Court in Manhattan. Based on its investigation of the whistleblower’s allegations, the Attorney General’s Office contends that from 2011-2015, My Pillow failed to collect and remit approximately $537,000 in sales taxes on taxable sales made over the phone and through the Internet to New Yorkers. My Pillow was required to collect and remit sales taxes because the company sold products at trade shows in New York through independent contractors and other representatives, among other reasons. The Attorney General’s Office claims that My Pillow knowingly made false records or statements concerning the sales taxes it was required to collect and remit. NY

August 5, 2016

A series of anesthesia businesses collectively known as Sweet Dreams Nurse Anesthesia agreed to pay roughly $1 million to settle charges they violated the False Claims Act, Anti-Kickback Statute and Georgia False Medicaid Claims Act by paying unlawful kickbacks to health care providers for referrals.  According to the government, one alleged scheme involved Sweet Dreams’ provision of free anesthesia drugs to ambulatory surgery centers (ASCs) in exchange for granting Sweet Dreams an exclusive contract to provide anesthesia services at those ASCs.  A second alleged scheme allegedly involved the agreement of an affiliate of Sweet Dreams to fund the construction of an ASC in exchange for contracts for Sweet Dreams’ selection as the exclusive anesthesia provider.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Adam Nauss.  He will receive a yet-to-be-determined whistleblower award from the proceeds of the government's recovery.  DOJ (MDGA)

August 1, 2016

St. Joseph’s Hospital Health Center agreed to pay $3.2 million to resolve allegations it violated the federal False Claims Act and New York False Claims Act by billing the state Medicaid program for mental health services provided by unqualified staff.  Specifically, the government alleged that St. Joseph's billed Medicaid for mobile-crisis outreach services that failed to comply with Comprehensive Psychiatric Emergency Program (CPEP) staffing requirements.  The allegations originated in a whistleblower lawsuit filed by registered nurse Catherine Lembo under the qui tam provisions of the federal and New York False Claims Acts.  Ms. Lembo will receive a whistleblower award of $560,000 from the proceeds of the government’s recovery.  Whistleblower Insider