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Anti-Kickback and Stark

This archive displays posts tagged as relevant to the Anti-Kickback Statute and Stark Law.

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January 20, 2023

DePuy Synthes, Inc., a subsidiary of Johnson & Johnson that manufactures medical devices, has agreed to pay $9.75 million to resolve allegations of defrauding Medicare and Medicaid.  According to former sales representative Aleksej Gusakovs, DePuy gave a Massachusetts-based orthopedic surgeon thousands of dollars’ worth of free implants and instruments for use in overseas surgeries.  The illegal kickbacks induced the surgeon to use DePuy products in surgeries performed in the United States, and caused false claims to be submitted to Medicare and the Massachusetts Medicaid program.  As the whistleblower in a successful qui tam action, Gusakovs will receive a $1.37 million share of the settlement.  DOJ

December 5, 2022

An opioid abuse treatment facility in New Jersey has agreed to pay $3.15 million and enter into a three-year deferred prosecution agreement to resolve criminal and civil charges relating to alleged violations of the federal Anti-Kickback Statute.  Between 2009 and 2015, Camden Treatment Associates LLC (CTA) allegedly received kickbacks from a related company in exchange for exclusive orders of CTA’s methadone mixing services.  CTA then allegedly submitted false claims to Medicaid and obstructed a Medicaid contractor’s attempt to audit those claims in 2016 by falsifying patient records.  USAO NJ

November 1, 2022

Electronic health record technology vendor Modernizing Medicine, Inc. (“ModMed”) has agreed to pay $45 million to resolve allegations, including by its former VP of Product Management, that it both received and provided illegal kickbacks in exchange for referrals.  According to the government and whistleblower Amanda Long, ModMed engaged in schemes with Miraca Life Sciences, Inc. (now known as Inform Diagnostics) to receive kickbacks in exchange for recommending its users for Miraca’s lab services, and to provide its EHR technology free to healthcare providers to entice them to direct lab orders to Miraca and add to ModMed’s user base.  Long will receive about $9 million of the settlement with ModMed. DOJ

October 14, 2022

The owners of two Texas-based home health clinics have been sentenced to 10 years in prison each after a jury convicted them of conspiring to commit healthcare fraud.  Alfred Olotin Alatan, who owned Colony Home Health Services, and Francis Ekene, who owned Milten Medical Clinic, allegedly paid recruiters for patient information, then billed providers for home health services, regardless of need.  Co-conspirators Susana Bermudez and Rita Kpotie Smith, both of whom operated the clinics under Alatan’s direction, are currently serving 2.5 years and 5 years in prison, respectively.  USAO SDTX

October 12, 2022

Four pharmacies have agreed to pay over $6.8 million to settle a qui tam suit that alleged they defrauded TRICARE and the Federal Employees Health Benefits Program, in violation of the False Claims Act.  According to a former accountant for one of the pharmacies, DermaTran Health Solutions, LLC; Pharmacy Insurance Administrators, LLC; Legends Pharmacy; TriadRx; and Lake Side Pharmacy created a program to waive mandatory copays for beneficiaries of federal health insurers, overcharged the government for compounded pain creams, and traded out-of-network prescriptions with other pharmacies, which constituted a kickback.  USAO NDGA

October 6, 2022

A man in Missouri who was convicted of committing healthcare fraud through various durable medical equipment companies has been sentenced to 3 years in prison and ordered to repay $7.5 millionJamie McCoy, who owned or operated AE Wellness LLC, Summit Medical Supply, Patriot Medical Supply, and DME Device Co., had worked in conjunction with marketing firms and a telemedicine doctor to cause fraudulent claims derived from illegal kickbacks to be submitted to Medicare and TRICARE.  After the scheme was discovered and McCoy and AE Wellness were suspended from further participation, two of McCoy’s associates opened the other companies to continue the fraud, while concealing McCoy’s role in the operation.  USAO EDMO

October 3, 2022

Medical sales representative Steven Monaco has been sentenced to 14 years in prison for orchestrating two fraud schemes that led to multimillion dollar losses to federal, state, and private health insurance plans.  In the first scheme, Monaco arranged for a doctor’s medical assistant to be placed on the payroll of a medical diagnostic laboratory in exchange for all of the doctor’s labwork.  In the second scheme, Monaco arranged for doctors to sign medically unnecessary prescriptions for expensive compounded medications, on behalf of patients they never evaluated, in exchange for illegal kickbacks.  Monaco received $36,000 from the first scheme and $350,000 from the second scheme, and caused over $4.6 million in losses to the insurance plans.  USAO NJ

September 30, 2022

The owners and operators of three home health care companies in Illinois, Patricia and Felix Omorogbe, have been sentenced to a combined 3.5 years in prison and ordered to pay a combined $8 million in restitution for paying illegal kickbacks to patient marketers in exchange for referrals of Medicare beneficiaries.  According to the DOJ, in addition to the kickbacks, Patricia Omorogbe, a registered nurse, also falsely certified that she performed assessments on patients, causing false claims to be submitted to Medicare.  DOJ

September 26, 2022

Biogen Inc. has agreed to pay $900 million to resolve allegations by former employee Michael Bawduniak that the pharmaceutical company paid illegal kickbacks to physicians in order to induce prescriptions of their multiple sclerosis drugs, causing false claims to be submitted to Medicare and Medicaid.  According to Bawduniak, over a five-year period, Biogen paid kickbacks in the form of speaker honoraria, training fees, consulting fees, and free meals.  The vast majority of the settlement proceeds (over $840 million) will go to the federal government, while the remainder will be divided among 15 states.  USAO MA

September 2, 2022

Bayer Corporation, together with its subsidiaries, will pay $40 million to settle claims initiated by a whistleblower alleging that the pharmaceutical manufacturer violated the False Claims Act by engaging in off-label marketing, unlawful kickbacks, and misreporting of safety risks with respect to its drugs Trasylol, Avelox, and Baycol.  The whistleblower, former Bayer marketing employee Laurie Simpson, will receive approximately $11 million from the settlement.  DOJ; USAO MN; USAO NJ
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