Healthcare Fraud

January 30, 2020

Johnson & Johnson has been ordered to pay $344 million to the State of California for misrepresenting the safety of its pelvic mesh implants, which were sold from 2008 to 2014 and have resulted in over 35,000 personal injury lawsuits nationwide.  The State of California brought suit in 2016 after finding the company failed to inform patients and their doctors of possible severe complications, including chronic pain and permanent dysfunctional elimination.  Johnson and Johnson previously settled similar allegations with some 40 other states, for $117 million, in October of last year.  CA AG

January 29, 2020

A Florida-based physician, Erik Schabert, and his ex-wife, Mika Harris, have been sentenced to 3.5 years and 3 months in prison, and ordered to pay almost $4.5 million in restitution to Blue Cross Blue Shield for attempting to defraud the insurer and the Medicare program of more than $8 million.  Between 2013 and 2016, the two owners and operators of Reliant Family Practice falsely diagnosed actinic keratosis and rosacea in order to make fraudulent claims for chemical peels and dermabrasions.  Along with prison time and restitution, the two have forfeited their private residence, commercial property, and over $260,000 in an annuity account, to the federal government.  USAO NDFL

January 27, 2020

Practice Fusion, Inc., a provider of electronic health records systems, will pay $145 million to resolve criminal and civil charges that it accepted unlawful kickbacks from pharmaceutical companies and misrepresented the capabilities of its EHR software.  As part of the settlement, the defendant entered into a deferred prosecution agreement, paying $26 million in criminal fines and forfeitures, agreeing to compliance policies and monitoring, and admitting that it accepted payment from an unnamed opioid manufacturer in exchange for including "clinical decision support" alerts within its EHR system that were designed to increase prescriptions for the pharma company's drugs.  The civil settlement – $119 million for the federal government and up to an additional $5.2 million for states that choose to opt in – resolves the kickback allegations related to the opioid manufacturer and 13 other such arrangements, as well as allegations that Practice Fusion knowingly misrepresented the capabilities of its EHR system in order to secure federal certification for the software and secure eligibility for federal incentive payments for providers adopting its software.  DOJ; USAO VT

January 23, 2020

Arch Health Partners, Inc. has agreed to pay $2.9 million to resolve fraud allegations brought by a former employee turned whistleblower, Catherine Jones.  Jones alleged in a qui tam suit that the San Diego-based healthcare provider had falsely billed Medicare for evaluation and management services that lacked sufficient documentation, in violation of the False Claims Act.  Based on self-disclosures by Arch Health, the United States also alleged that referring physicians were being compensated above fair market value, in violation of the Anti-Kickback and Stark Acts.  Jones will receive $183,830 of the settlement proceeds.  USAO SDCA

January 21, 2020

Patient Services, Inc., a foundation that operated pharmaceutical patient assistance programs, will pay $3 million to resolve claims that it unlawfully enabled pharmaceutical companies to pay kickbacks to Medicare patients in the form of co-payment assistance for patients who took the companies’ drugs.  PSI was alleged to have worked with the drugmakers to funnel their “contributions” to patients who took the company’s drugs, instead of using the contributions for purposes not tied to specific drugs and patients.  PSI was alleged to have worked with Insys on copayment assistance for Subsys patients; with Aegerion on copayment assistance for Juxtapid patients; and, with Alexion on copayment assistance for Soliris patients.  USAO Mass