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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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September 18, 2019

Florida-based compounding pharmacy Diabetic Care Rx LLC, also known as Patient Care America, together with two of its executives, CEO Patrick Smith and VP of Operations Matthew Smith, and the private equity firm Riordan, Lewis & Haden Inc., will pay $21.36 million to resolve a case brought by two whistleblowers under the False Claims Act alleging that they paid unlawful kickbacks to secure referrals for patients covered by TRICARE, the federal healthcare program that covers military members and their families.  The pharmacy paid patient recruiters to target military members and their families for the prescription of compounded creams and vitamins formulated to ensure the highest possible reimbursement from TRICARE.  The marketers in turn paid doctors who issued the prescriptions, often without seeing or even speaking to the purported patients.  In addition, the pharmacy and marketing company often covered patient copayments through a sham charitable organization affiliated with the marketing company.  Private equity investor RLH was alleged to have known about and agreed to the kickback scheme.  Whistleblowers Marisela Medrano and Ada Lopez were, respectively, the former Director of Marketing and the Reimbursement Services Manager of PCA.  They will receive a yet-to-be-determined share of the U.S. recovery.  DOJ; SD FL

September 13, 2019

Texas hospital administrator Starsky Bomer was convicted of violating the Anti-Kickback Statute and conspiring to commit healthcare fraud for paying kickbacks to group homes and others in exchange for referrals to outpatient treatments for severe mental illness at his affiliated hospital, resulting in $16 million dollars of false claims to Medicare. The kickbacks came in the form of salary payments and payments for transportation to owners of group homes. Mr. Bomer was sentenced to ten years in prison for his involvement in the scheme. DOJ

Catch of the Week – South Florida Health Care Facility Owner Sentenced to 20 Years in $1.3 Billion Fraud - The Largest Health Care Fraud Scheme Ever Charged by the DOJ

Posted  09/13/19
Philip Esformes, 50, of Miami Beach, Florida, was sentenced to 20 years in prison for his role in a decades-long billion-dollar scheme to submit fraudulent claims to Medicare and Medicaid both for services deemed medically unnecessary and services that were medically necessary but that he did not provide.  Esformes personally pocketed $37 million from this scheme to fund his lavish lifestyle, while leaving elderly...

September 12, 2019

Following his conviction earlier this year, Philip Esformes was sentenced to 20 years in prison for his role in orchestrating a Medicare and Medicaid fraud scheme through his network of assisted living and skilled nursing facilities.  Esformes bribed physicians to admit patients, then provided them with inadequate, inappropriate, or unnecessary services.  To ensure his facilities maintained state licenses, he bribed Florida state regulators.  DOJ; USAO SD FL

CATCH OF THE WEEK – Mallinckrodt Pays for Kickbacks on Acthar; Investigation into Copayment Subsidies Continues

Posted  09/6/19
This week, the Department of Justice announced that pharmaceutical company Mallinckrodt ARD LLC had agreed to pay over $15 million to resolve allegations that it paid illegal kickbacks to physicians to induce them to prescribe Acthar.

AKS Allegations

Two whistleblower lawsuits brought under the False Claims Act against Mallinckrodt alleged that from 2009 to 2013, the pharma company, then known as Questcor,...

September 5, 2019

In yet another enforcement action relating to a nationwide compounding pharmacy fraud scheme involving OK Compounding, Dr. James Womack of Missouri has agreed to pay $471,221 to resolve his liability under the False Claims Act.  Womack allegedly accepting kickbacks disguised as medical director fees in exchange for prescribing medically unnecessary pain creams.  USAO NDOK

September 4, 2019

Pharmaceutical company Mallinckrodt ARD LLC has agreed to pay $15.4 million to settle allegations of violating the Anti-Kickback Statute by “wining and dining” healthcare providers to induce Medicare prescriptions of its drug H.P. Acthar Gel.  The allegations arose from two whistleblowers, who will jointly receive about $2.9 million of the settlement.  DOJ

August 29, 2019

A healthcare executive in Tennessee has been sentenced to 3.5 years in prison and ordered to forfeit nearly $600,000 for her role in a $4.6 million illegal kickback scheme.  In pleading guilty to violating the Anti-Kickback Statute, Brenda Montgomery admitted that she paid the CEO of Comprehensive Pain Specialist (CPS), John Davis, a 60% cut of Medicare reimbursements—amounting to more than $770,000—for arranging the referrals of durable medical equipment.  As a result of the scheme, Montgomery herself received fraudulent reimbursements amounting to as much as $2.9 million.  USAO MDTN

August 27, 2019

Three doctors and a cardiac center have agreed to pay a combined $1.1 million to resolve allegations of receiving kickbacks from the now defunct Northwest Medical Testing Company (NMTC) in exchange for ordering genetic tests from NMTC that were then billed to Medicare.  Dr. Gregory Sampognaro will pay $519,750, Dr. Isabella Strickland will pay $107,900, Dr. Warren Strickland will pay $95,053, and Cardiology P.C. will pay $411,300.  USAO WDWA

August 16, 2019

2d Chance PLLC, a Kentucky-based substance abuse center, will pay $200,494 to resolve allegations under the False Claims Act that it entered into an arrangement with Compliance Advantage, LLC, a toxicology lab, whereby 2d Chance referred patients to Compliance Advantage for complex drug testing, and Compliance Advantage provided a no-cost chemistry analyzer to 2d Chance, allowing 2d Chance to perform some urine testing at its site and bill Medicaid for those services.  The financial arrangement violated the Anti-Kickback Statute.  EDKY
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