Archive

August 24, 2020

Following a whistleblower suit by a former sales representative, DUSA Pharmaceuticals (DUSA), a Massachusetts-based subsidiary of Sun Pharmaceuticals Industries Inc. (Sun Pharma), has agreed to pay $20.75 million to resolve allegations of defrauding Medicare and the Federal Employee Health Benefit Pr­­­ogram.  According to relator Aaron Chung, senior management at DUSA and Sun Pharma allegedly encouraged doctors, via paid speaker programs and discussions, to use shorter incubation periods of 1-3 hours for Levulan Kerastick, a topical prescription medication for treating actinic keratosis (AK) of the face and scalp that had FDA-approved instructions for 14-18 hour incubation periods.  As expected, the significantly reduced incubation periods resulted in significantly reduced AK clearance rates, yet DUSA failed to inform doctors of the lower rates and even actively misinformed them that AK clearance rates were the same regardless of incubation period.  For exposing the fraudulent conduct, Chung will receive approximately $3.5 million of the settlement proceeds.  DOJ; USAO WDWA

August 21, 2020

Cardiologist Ghanshyam Bhambhani of Queens, New York, paid $2 million to settle allegations that he paid kickbacks to fellow physicians for patient referrals.  Specifically, defendant was alleged to have paid other doctors compensation disguised as rent for patient referrals in violation of the Anti-Kickback Statute and the False Claims Act, and falsified records to justify cardiac procedures.  The action was initiated by the filing of a whistleblower complaint.  USAO ED NY

August 21, 2020

Fire protection services contractor Fiore Industries Inc. will pay $1.2 million to resolve claims that it violated the False Claims Act by overstating its workers’ compensation rates in submitting claims for work it preformed at NASA’s Ames Field Center, thereby overcharging the government.  Fiore’s stated workers compensation rates did not account for discounts it knew it would receive.  USAO ND Cal

August 21, 2020

A Georgia-based chiropractor and her medical practice have been ordered to pay more than $5 million for violating the False Claims Act.  The government alleged that Dr. Jennifer Heller, D.C. caused Medicare to pay $1.4 million more than it would have had it known that hundreds of Heller’s charges for a surgical neurostimulator procedure were in actuality for acupuncture devices, which are not covered by Medicare, and which do not require surgery.  To resolve the charges, Heller Family Medicine, LLC will have to pay $4.3 million, while Heller herself will have to pay $700,000.  USAO SDGA

August 20, 2020

Defense contractor Islands Mechanical Contractor, Inc. (IMC) has paid the United States $1.1 million to settle claims of improperly submitting equitable adjustment claims relating to a delayed facility construction project at Guantanamo Bay.  An investigation by the Defense Contract Audit Agency had found that IMC’s claims for equipment and worker standby costs were based on misrepresented information, as both the equipment and workers listed on the claims had been reallocated to other projects and were no longer on standby.  USAO MDFL

August 19, 2020

Metropolitan Jewish Health System Hospice and Palliative Care agreed to pay a total of $5.225 million resolve civil allegations that it billed Medicare and Medicaid for services rendered to hospice patients at heightened levels of care for which the patients did not qualify, in violation of the False Claims Act. A government investigation following the filing of a whistleblower complaint determined that defendant falsely claimed that some of its patients required heightened “continuous home care services” and “general inpatient services,” thereby entitling the defendant to artificially inflated reimbursements.  USAO ED NY

July 30, 2020

Computer Sciences Corporation (CSC), now known as DXC Technology, and New York City have agreed to pay approximately $2.8 million to resolve allegations of violating the federal and New York State False Claims Acts in connection with New York City’s Early Intervention Program (EIP), which provides speech and physical therapy services for infants and toddlers with possible developmental disabilities.  According to a qui tam lawsuit, while retained by the City to process and submit its EIP claims to various insurers, CSC allegedly received permission from the City to categorize claims submitted to private insurers as “denied” if no response was received within 90 days.  CSC then resubmitted those claims to Medicaid using an improper code, causing Medicaid to make payments it would not have otherwise.  For revealing the misconduct, the unnamed whistleblower in this case will receive $416,250.  AG NY; USAO SDNY

July 28, 2020

A pharmaceutical company accused of paying illegal inducements to physicians has agreed to pay $3.5 million to resolve allegations of violating the False Claims Act.  In order to induce physicians to prescribe its newly-launched local analgesic, EXPAREL, Pacira Pharmaceuticals Inc. allegedly paid doctors kickbacks that were half-heartedly disguised as grant money for research.  In order to receive the so-called research grant, Pacira required EXPAREL to be placed on formulary at the physician’s institution, but did not document why such research was needed or follow up on research results.  The fraud was eventually exposed by a pharmacist in a qui tam suit; the pharmacist will receive $638,000 as part of the settlement.  USAO NJ; AG FL

July 24, 2020

Several divisions of pharmaceutical company Indivior, which marketed of the opioid-addiction drug Suboxone, pleaded guilty to felony healthcare fraud, entered into a five-year Corporate Integrity Agreement, and will pay a total of $600 million in criminal fines, restitution, civil damages, and penalties.  In six separate cases brought by whistleblowers, Indivior was also alleged to have caused false claims to be submitted to government healthcare programs including by promoting the sale of Suboxone to physicians who were prescribing it outside of medically accepted indication, misrepresenting the likelihood of Suboxone being diverted, and taking steps to delay generic competition for Suboxone. Indivior admitted making false statements about the safety of the film version of Suboxone in order to promote its sale.  In addition, the FTC claimed that violated antitrust laws through a deceptive scheme to thwart lower priced generic competition with Suboxone.  The total settlement consists of criminal restitution of $289 million; a civil settlement of $300 million, with $209.3 million paid to resolve claims by the federal government and $90.7 million to participating states; and, $10 million in penalties to the Federal Trade Commission.  The settlement also requires Indivior to take steps including the dissolution of its Suboxone sales force. Indivior was until 2014 a subsidiary of Reckitt Benckiser Group PLC, which previously paid $1.4 billion to resolve claims related to Suboxone marketing.  DOJ; USAO NJ; FTC

July 23, 2020

Progenity, Inc., f/k/a Ascendant MDx, Inc., has agreed to pay a total of $49 million to resolve allegations that the California-based clinical laboratory submitted false claims to Medicaid, the VA, TRICARE, and the Federal Employees Health Benefits Program (FEHBP) through different fraudulent schemes.  First, from 2012 to 2016, Progenity allegedly billed the programs for non-reimbursable prenatal tests using a reimbursable billing code.  Second, in claims originally brought by a whistleblower under the False Claims Act, the company was alleged to violate the Anti-Kickback Statue by providing improper incentives to physicians—including paying above fair market value for blood specimen “draw fees”, providing tens of thousands of dollars in free food and alcohol, and routinely reducing or waiving co-insurance or deductibles—in order to induce physicians to order their tests.  Approximately $35.9 million of the settlement proceeds will go toward resolving federal claims, with the remaining $13.1 million paid to different states.  AG NC; USAO SDCA; USAO SDNY