Anti-Kickback and Stark

September 23, 2021

Index Systems, Inc. and Capital Consulting Group, Inc. (CCG), two government contractors in Virginia, have agreed to pay nearly $1.2 million to settle allegations of violating the False Claims Act and Anti-Kickback Act.  In order to fraudulently obtain Small Business Administration contracts reserved for businesses owned by socially or economically disadvantaged citizens, CCG—which was not eligible—allegedly conspired with Index to use Index’s certification to bid on the contracts, in exchange for kickbacks.  USAO EDVA

September 8, 2021

Bayada Home Health Care, Inc. and related entities agreed to pay $17 million to resolve allegations of paying unlawful kickbacks that were initiated by a whistleblower action under the False Claims Act.  The government alleged that Bayada purchased two home health care agencies from a company that owned retirement communities in order to induce referrals from the seller to Bayada.  The whistleblower, David Freedman, was the director of strategic growth for Bayada; he will receive more than $3 million as a whistleblower reward.  DOJ; USAO NJ

September 3, 2021

A number of South Carolina pain management clinics, drug testing laboratories and other entities associated with chiropractor Daniel McCollum have had default judgments entered against them ordering the payment of $140 million.  The defendant entities, Oaktree Medical Centre P.C., FirstChoice Healthcare P.C., Labsource LLC, Pain Management Associates entities, ProLab LLC, and ProCare Counseling Center LLC, were alleged to have provided illegal financial incentives to providers to induce their referrals of urine drug tests in violation of the Stark Law and the Anti-Kickback Statute, and to have submitted false claims to federal healthcare programs for medically unnecessary urine drug testing, steroid injections, opioid prescriptions, and lidocaine ointment prescriptions.  The settlement resolves claims against the entities brought in three separate qui tam actions Donna Rauch, Muriel Calhoun, Brandy Knight, Karen Mathewson and Tracy Hawkins, former employees of pain management clinics owned or operated by McCollum. The government continues to pursue claims against McCollum.  DOJ; USAO SC

August 9, 2021

The owners of North Carolina compounding pharmacy Wellcare Compouding, David Tsui and Lois Tsui, paid $1.1 million to resolve allegations that they violated the False Claims Act by submitting false claims for payment to the TRICARE program in 2014 and 2015.  The government alleged that Wellcare made improper payments to physicians and “marketers” in violation of the Anti-Kickback Statute and encouraged medically unnecessary prescriptions consisting of high-margin ingredients in order to maximize the pharmacy’s reimbursement. David Tsui had been convicted of healthcare fraud in 2009 and was excluded from participation in federal healthcare programs; the government alleged that his involvement and ownership was intentionally concealed.  USAO MD NC

August 6, 2021

Maryland-based National Spine & Pain Center (NSPC) and its affiliate, Physical Medicine Associates, Ltd. (PMA), have agreed to pay $5.1 million to Medicare and enter into a non-prosecution agreement to settle a criminal fraud investigation.  In violation of the Anti-Kickback Statute, NSPC and PMA had conspired with a now-defunct California-based genetics testing company called Proove Biosciences to have Proove pay illegal kickbacks to NSPC and PMA physicians in exchange for a certain volume of test referrals.  Nine individuals have been charged in connection with the scheme.  USAO SDCA

August 2, 2021

Diabetic testing supply company Arriva Medical LLC and its parent company Alere Inc. will pay $160 million to resolve claims first brought in a whistleblower case alleging that Arriva provided unlawful patient inducements in the form of “free” or “no cost” glucometers and copayment waivers.  Defendants were alleged to have systematically provided all new patients with glucometers, and billed Medicare for those meters, although Medicare beneficiaries are only eligible for a new meter once every five years.  In addition, Arriva was alleged to have billed Medicare for deceased beneficiaries.  The whistleblower, Gregory Goodman, who was an employee at an Arriva call center, will receive a whistleblower award of $28.5 million.  Executives at Arriva previously agreed to a settlement of claims against them.  DOJ; USAO MD Tenn