Archive

August 1, 2016

New York and the Justice Department announced that St. Joseph’s Hospital Health Center (St. Joseph’s) will pay $3.2 million to resolve allegations that it violated the federal and New York False Claims Act by presenting false claims for payment to the state Medicaid program for mental health services rendered by unqualified staff. settlements resolve allegations that St. Joseph’s knowingly presented false claims for payment to Medicaid for mobile-crisis outreach services rendered from January 1, 2007 through February 29, 2016 by personnel who failed to satisfy the basic CPEP staffing requirements. By submitting claims for payment to Medicaid without disclosing that its CPEP staff failed to meet the regulatory staffing requirements, and by accepting payment for these claims, the governments allege that St. Joseph’s misrepresented its compliance with mental health staffing requirements that are central to the provision of counseling services and, by doing so, violated the False Claims Act. As part of the settlements, St. Joseph’s admits that it was improper to have conducted mobile crisis outreach visits without a member of its CPEP professional staff present and then bill Medicaid for such services. NY

July 29, 2016

A judgment for $4,752,101.50 was entered against LXE Counseling, LLC and its owner Lexie Darlene George (a/k/a Lexie Darlene Batchelor) for violations of the False Claims Act, the Oklahoma Medicaid False Claims Act and the Oklahoma Medicaid Program Integrity Act.  Specifically, LXE and Batchelor were found to have submitted claims to Oklahoma Medicaid for services that were, among other things: provided by unqualified persons; based on falsified time and service records; double billed; unauthorized or not provided.  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 whistleblower award from the proceeds of the government's recovery.  DOJ (WDOK)

July 25, 2016

Florida announced the arrests of three individuals for operating a $1 billion Medicare and Medicaid fraud scheme involving numerous Miami-based health care providers. Attorney General Bondi’s MFCU, as part of the HEAT Strike Force, assisted in identifying more than $100 million of Medicaid fraud in connection to this scheme. According to the indictment, Philip Esformes, 47, operated a network of more than 30 skilled nursing homes and assisted living facilities that gave access to thousands of Medicare and Medicaid beneficiaries. Many of these beneficiaries did not qualify for skilled nursing home care or for placement in an assisted living facility. However, Esformes and co-conspirators admitted the beneficiaries to Esformes Network facilities, and received medically unnecessary services billed to Medicare and Medicaid. The defendants also allegedly received kickbacks by steering the beneficiaries to other health care providers, including community mental health centers and home health care providers, who also performed medically unnecessary treatments billed to Medicare and Medicaid. In order to hide the kickbacks from law enforcement, the kickbacks were often paid in cash, or were disguised as payments to charitable donations, payments for services and sham lease payments. FL

June 30, 2016

California-based Marshall Medical Center agreed to pay $5.5 million to settle allegations that it, along with Marshall Foundation for Community Health, El Dorado Hematology & Medical Oncology II, Inc., Dr. Lin H. Soe and Dr. Tsuong Tsai, violated the federal False Claims Act and California False Claims Act through a variety of Medicare and Medicaid billing improprieties.  The allegations originated in a whistleblower lawsuit filed by oncology nurse Colleen Herren under the qui tam provisions of the False Claims Act. She will receive a whistleblower reward of roughly $1,430,000 from the proceeds of the government's recovery.  DOJ (EDCA)

July 8, 2016

California announced that the Bureau of Children’s Justice and False Claims Unit of the California Department of Justice has reached a settlement agreement with K12 Inc., a for-profit online charter school operator, and the 14 affiliated non-profit schools known as the California Virtual Academies (“CAVA Schools”) that it manages, over alleged violations of California’s false claims, false advertising and unfair competition laws. As part of the settlement, which is subject to court approval, K12 will provide approximately $160 million in debt relief to the non-profit schools it manages—“balanced budget credits” that were accrued by the schools as a result of the fee structure K12 used in its contracts—and will pay $8.5 million in settlement of all claims. In addition, K12 has agreed to implement significant reforms of its contracts with the CAVA Schools, undergo independent reviews of its services for students with disabilities, ensure accuracy of all advertisements, and provide teachers with sufficient information and training to prevent improper claiming of attendance dollars. CA

July 7, 2016

A Bedford-based transportation service provider has agreed to pay more than $700,000 to resolve allegations that it submitted false claims to the state’s Medicaid program (MassHealth) for medically unnecessary wheelchair van rides, Massachusetts announced. It also allegedly submitted claims for services that should have been provided at a lower cost through a MassHealth transportation broker. The AG’s investigation revealed that REM Transportation Services, LLC (REM) submitted the false claims from January 5, 2010 to December 31, 2014. Many of the MassHealth members allegedly receiving the rides were ambulatory and did not use wheelchairs or need assistance, as required under MassHealth regulations. MA

June 27, 2016

Massachusetts announced that a Chicopee-based mechanical contractor has agreed to pay more than $220,000 to resolve allegations it falsely certified compliance with equal opportunity requirements on two public contracts. The assurance of discontinuance alleges B-G Mechanical Contractors, Inc. (B-G) violated the state’s consumer protection laws and False Claims Act by failing to abide by provisions in two public design-build energy contracts requiring B-G to subcontract a certain percentage of work to Minority/Women Business Enterprises (M/WBEs). For both contracts, the AG’s Office alleges B-G improperly claimed full M/WBE credit for supplies subcontractors sold to and then repurchased from M/WBEs in sham transactions. MA

June 9, 2016

Raleigh, North Carolina-based specialty pharmacy Salix Pharmaceuticals, Inc., which sells products used to treat various gastroenterology conditions, agreed to pay $54 million to settle charges it violated the federal Anti-Kickback Statute and False Claims Act by using its “speaker programs” as a mechanism to pay kickbacks to doctors to induce them to prescribe Salix drugs and medical devices.  Specifically, the government alleged Salix held sham speaker programs, frequently at high-end restaurants, where doctors were paid substantial honoraria purportedly to educate other doctors about a Salix product, but in reality spent little or no time discussing the product.  $16,578,000 of the settlement amount will go to the Medicaid programs of different states including Ohio.  The allegations originated in two whistleblower lawsuits filed under the qui tam provisions of the False Claims Act.  The whistleblowers will receive a yet-to-be-determined award from the proceeds of the government's recovery.  DOJ (SDNY), OH

June 6, 2016

Genentech Inc. and OSI Pharmaceuticals LLC agreed to pay $67 million to resolve charges they violated federal and state False Claims Act by making misleading statements about the effectiveness of the cancer drug Tarceva.  According to the government, Genentech and OSI made misleading representations to physicians and other health care providers about the effectiveness of Tarceva when there was little evidence to show that Tarceva was effective to treat those patients unless they also (i) had never smoked or (ii) had a mutation in their epidermal growth factor receptor, which is a protein involved in the growth and spread of cancer cells.  The allegations originated in a whistleblower lawsuit filed by former Genentech employee Brian Shields under the qui tam provisions of the False Claims Act.  He will receive a whistleblower award of approximately $10 million out of the proceeds of the government’s recovery.  Whistleblower Insider GA, MA, OH

May 26, 2016

New York announced that it has entered into a settlement agreement with Vascuscript, Inc., d/b/a Mobile Pharmacy Solutions, to resolve allegations that it billed Medicaid for prescriptions which were written by an excluded Medicaid Provider. The Attorney General’s investigation determined that from April 21, 2010, through January 25, 2013, Vascuscript, Inc. submitted and received payment on approximately 4,600 claims to Medicaid for prescriptions that were written by Dr. Mikhail Strutsovskiy. The Department of Health had previously excluded Dr. Strutsovskiy from the Medicaid program, rendering prescriptions written by him ineligible for Medicaid reimbursement. Before filling a prescription, pharmacies are required under Medicaid billing rules to first ascertain whether the prescriber’s services are eligible for reimbursement. Because Vascuscript did not do so, it filled and delivered the prescriptions written by Dr. Strutsovskiy that were not eligible for Medicaid reimbursement. NY